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@eo@ocn said:
Without transparency, on any level, owners can be left feeling (and sometimes being) cheated.
You won’t get any argument from me on that – and it is a very easy fix. The annual accounts should clearly state how much the insurance costs and how much commission the strata manager gets. It’s up to the strata manager to explain to owners – possibly on a flyer attached to levy notices – why they get this commission.
Much better to have a system where owners corporations properly remunerate their managers for their expertise and experience, and pay a separate fee for service for their insurance which is not grossed into the premium (remembering that for our new large and sophisticated buildings this could be $100,000+ per year).
Two points in that statement. Proper remuneration is a tricky issue since may owners corps will go for the cheapest option because they don’t know what the benchmarks of good service are. All too often, even well-run buildings are taken over by owners who promise lower levies and the only way they can achieve that is by cutting corners. That is turn will lead to an increase in mega management firms and fewer small local operators.
Allowing strata managers to charge the insurers a separate fee for servicing the policy is a smart way round this – but that’s not what the anti-commissions lobby is pushing for. The demand is for a complete ban and that has some consequences that disadvantage the average owner.
Let’s educate owners, who can sometimes focus on the bottom line rather than the value being delivered.
Good luck with that. But not everybody reads Flat Chat or is a member of the OCN (more’s the pity).
Let’s see all strata managers tendering on the same basis of a fair day’s pay for a fair day’s work, with a transition program that puts all managers on a level playing field viz renegotiating their fees at the same time.
That sounds good – but what does it mean? KPI’s and the like? Personal engagement with the owners? X hours per week devoted to the strata plan. I don’t think it’s a bad idea – I just can’t see how it might work.
Let’s see more healthy competition in the strata insurance market, once this playing field is also levelled.
No argument on that.
Yes, some strata managers may choose to gracefully retire or to sell their business. But those strata managers who choose the transition will hold their heads high, as valued and valuable advisers on strata matters.
But once again we come back to the very real problem of often very new and largely unaware owners being asked to run their buildings with no training, experience or even basic knowledge. Along comes Flash Harry who offers them affordable this and competitive that with a dash of high-tech whatever and we are back to the bad old days of faceless strata managers who don’t care and frustrated owners who don’t understand.
One final point – based on conversations I have had within the past few days, I will be very surprised if there is a complete ban on commissions in the strata law review. We would all probably be better off focussing on a way of making these commissions work for all concerned but especially strata owners.
To me, that means bringing in full and open disclosure, statutory financial responsibility, clear and unequivocal responsibilities for the strata manager to manage the policies and a minimum number of quotes presented to all owners at an AGM at every policy renewal.