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Topic
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Could you please advise a general answer to the following questions or advise further areas of search?
- Our strata manager arranges the building insurance for our strata plan – and collects 15% commission, which is noted on the papers supplied prior to the annual general meeting. I am unaware if any competitive quotes have been obtained. Is this usual and/or ethical?
- Could the management committee of the body corporate (strata size is 4 townhouses) arrange insurance?
- There is a charge for an insurance valuation each year in the cash management account – conducted by a branch of the company operating our strata management plan. Is the frequency normal and should a branch of the company arranging the insurance be conducting the valuation?
- There is a charge, each year, for Trades Monitor OH&S and licence – is this correct?
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Yes the EC can arrange insurance, (the SM works for you and has to do what you tell him, if he doesn’t like it get another SM).
Yearly insurance valuations seems a bit much (QLD once every 5 years). You need to check reg in NSW.
OH&S is my pet hate, we have the same in QLD. It’s Workplace Health and Safety and as far as I’m concerned a small residential Stata is NOT a workplace. How often do non strata properties (homes) carry out one of these (never in my experience). I can understand large residential / holiday lets with onsite managers, lifts, swimming pools etc requiring this but in your sit noway.
I found this on NSW H & S website
A strata title body corporate responsible for any common areas used only for residential purposes is excluded from the definition of a person conducting a business or undertaking (PCBU – the new term that includes employers) under the Work Health and Safety Regulation 2011 (WHS Regulation) unless the strata title body corporate engages a worker as an employee.
https://www.workcover.nsw.gov.au/newlegislation2012/Pages/strata-title-body-corporate.aspx
Seems to me your SM is ripping you off left, right and centre.
Hi Dudley,
Let’s see if I can make some sense of all of this for you.
I will deal with each issue as you have mentioned . But before I start I would suggest even for a small scheme you would or should have an Executive Committee and the committee would be in regular contact and instructing your Strata Manager (SM) However I know of schemes that give full authority to their SM and leave the running of the OC with the SM.
STRATA INSURANCE
Firstly it’s compulsory – no option you must have it. The commission you speak of is the only allowed commission that Strata firms can receive. The fact is without this commission many Strata Firms could not survive and if it was taken away you would see management fees rise very sharply. It is normal that a couple of quotes would be sought each year, but it’s not unusal to see the same insurer from year to year. Insurers tend to give bigger discounts if the strata scheme is run well and stays with the insurer. There is nothing wrong in asking the SM if they called quotes.STRATA PROPERTY VALUATION
It is normal for the strata complex to be valued each year and the valuation is based on establishing the replacement value so that the Strata Insurance is taken out at the right coverage level (Strata Insurance also covers several other insurances not just the buildings). As for the valuation being done by an associated firm that’s up to you and the other owners, I don’t see any issues so long as the cost is competitive.TRADES MONITOR
Trades Monitor is a company that provides a service in carrying out an audit on the contractors used by your strata scheme in carrying out maintenance and other works, this protects to OC as each contractor is audited regarding the currency of their Trade Licence, Insurance and OH&S. I am of the view that it is money well spent.CLOSING
Always remember that as a Owner you have the right to ask questions of both the EC and SM, so I would raise your questions with them, it seems all is in order. It’s not simple to understand all the procedures involved in strata so I hope I have been able to make you aware of a few around these issues. Best to you and your strata scheme.@Dudley said:
As a starting point I would appreciate your opinion on what I must do to raise at the AGM various issues which I do not understand and/or am not convinced are necessary (unwarranted expense).
My preference would be to raise them at the AGM without prior notification – for reasons somewhat unique to our property.
Well there‘s a problem right away. You can make a decision on anything at an AGM that isn’t on the agenda. You can discuss what you like (at the chair’s discretion) but unless it’s on the agenda, any vote taken on the mater would be invalid.
However, can I suggest you take a look at the SCA’s excellent free online executive committee training course. I’m sure you will find it enlightening, informative and helpful. It will also make you better informed than 95 percent of people living in strata.
Click HERE to get going.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
@Dudley said:
Would I be correct in assuming that I can discuss, and put to a valid vote, any financial issues which appear in the Budget Estimate attached to the Notice of Annual General Meeting.
Many Thanks
You can def discuss any issues it raises and I would suspect you could make minor changes (debatable what is a minor change) but you would have to accept or reject the main the quote as a whole. (this is because the only people able to vote on any changes you propose are those present and so you are disenfranchising those not attending or returning a postal vote).
Just because you vote to accept this report dosn’t mean you cannot make changes to it and then ask for it to be voted on again. I know it’s a 10 year forecast but it can be changed as often as you like provide you have the votes.
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