Strata manager commissions & bonuses

The Property Stock & Business Agents legislation provides that any strata management agreement must disclose any commissions the strata manager may be paid.

If it doesn’t, the strata manager has to pay back the commission.

Financial institutions don’t pay bonuses/commissions to anyone for placing money with them – they don’t need to.

I am sure there are strata managers taking kick-backs just as there are in any industry, I knew one who did, but it is not that common, and applies to any sphere.

Up until recently I worked for a large bank which is well known for providing account services to strata managers.  They didn’t pay the strata managers for parking money with them.

The kind of arrangement you describe is not a commission.  A commission is a percentage of a specific transaction payable on entry into the transaction either as a one off or on a rolling basis.  A bonus or payment based on the total amount of accounts would fall outside of the type of arrangement dealt with in the Act.

If you believe your strata manager is doing something like that, the simplest thing to do is ask him/her if they receive any form of commission, bonus or other monetary reward in connection with the services they provide as a strata manager.

If a manager receives a benefit for placing money with a financial institution it doesn’t necessarily follow that it is not in the interests of the scheme.  It would be wrong if the manager placed the money with an FI paying a lower interest rate, because they were going to get something out of it.  But if the interest rate is the same as anywhere else, you can’t say that is detrimental to the strata scheme.

Any kind of arrangement that is detrimental to a strata scheme is not good.  It may be that a strata manager uses the same maintenance people over and over again without bothering to get quotes from better suppliers, even though he doesn’t get any monetary benefit.  That is why an EC needs to be proactive and take an interest in the management of the strata scheme.  In the case of investing money, we have always determined where the money should be invested and at what interest rate, not the strata manager.  Note that you are limited in where that money can be invested under the Act.