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Hi Jimmy
I enjoyed your talk with the Strata Manager from Strata Choice he sounded like he knew his stuff.
My only question is how does a strata management company that gets business from developers ( by being appointed at the outset when a new building is finished and the Strata Plan registered) handle the inherent conflict of interest when they then act for the new owners who have to be educated and taken through the building defect issues? That is , if they do a good job on behalf of the new owners in holding the developer to account wouldn’t that developer be reluctant to appoint that strata management company to manage its other new buildings?
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That’s a very good question and it’s one I asked recently, in light of the “embedded networks” scandals.
The simple answer is that this why the government brought in the one-year initial contract and three year maximum thereafter.
Look at it this way, how many existing apartment blocks are there, whose strata management contracts come up for renewal every three years, and how many new developments are there in any given three year period.
If a strata manager depends on new-builds for their work, they are going to go out of business the next time there’s a down-turn in new developments.
It’s a fine line but strata managers realise that if they get to the end of their first year contract and they’ve done nothing about defects, smart owners will replace them with someone who will do something in the 12 months they have left in which to register minor defect claims.
And don’t forget that it is a compulsory item on the initial AGM agenda that the Owners Corp considers hiring a surveyor to check for defects.
It’s a tricky one but good developers will hire good strata managers because they don’t want the hassles either.
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.
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