- This topic has 4 replies, 3 voices, and was last updated 6 years, 10 months ago by .
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Is it acceptable that a strata management company, looking after 15 strata units and charging fees of $12,000 for management also get paid a 20% commission on the strata Insurance amounting to a further $2000 approx? (In WA)
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The current average fees for full-service strata managers are between $250 and $300 per unit per year, although they could be more or less. On that basis, your scheme should be paying $4,500 p.a. at most. The 20 percent commission on insurances seems excessive too.The fees would obviously be higher if other services such as caretaking/building management were also provided.
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Are we in NSW? Do these fees include Part A and Part B fees? What are they doing under Part B? What does the contract with the strata managers say about the commission they get from insurance and getting a kick back from referrals to particular lawyers to do the debt collection for late strata fees and litigation expenses suing people for damaging common property and so on? These kickbacks have to be revealed in the contract which your strata managers have signed so before you go further, you need to read it. If you object to the conditions you can ask your strata committee why they signed it.
I now see you are in WA but I can’t see that these basic concepts would not apply to you anyway unless your contracts between Strata Corporations and Managing Agents are different to ours in NSW. Send me your agreement with your strata manager and I will advise further.
Strata management contracts are different everywhere – because strata laws are different everywhere. Victoria is only now looking at laws that would require strata managers to reveal their insurance commissions. WA is reviewing its strata laws and that state is way behind most of the rest of the country in the evolution of its legislation.
You know what they say about “assume” …
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Hi Gumdrops, just regarding the 20% commission for insurance. It is common and accepted practice (I think) for insurance brokers to take 20% but this is off the insurance companies profit.
Our Strata uses an insurance broker and the broker gets paid a 20% commission but we pay the same as if we had purchased the policy directly off the insurance company.
So if the 20% you referr to is this, it is standard practice. However having said that your Strata manager appears overly remunerated!!