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I am secretary/treasurer of the strata committee in a small block of 8 units with 5 resident owners. The other committee member, the chair, and I bought into the block last year, purchasing from the previous committee members who had left the finances in a terrible state. We were aware of that but the block so suits our needs and preferences we bought anyway. We have set about trying to get things back to a sustainable position.
We are looking to self-management as part of that solution. Our AGM is next month just before our contract with a PICA group strata manager expires. We have notified the strata managers of our intention to include a motion to move to self-management and provided the details for that. It was our hoped that we could transfer a month after the meeting, delaying that long because a levy becomes due in the meantime and the levy notices will be sent out before the meeting. We would be ready to go on the contract expiry date.
The strata managers have come back to us to say that, what with the Christmas break coming up, they could not possibly be ready until 3 months after the meeting.
Is this reasonable?
I have prepared a treasurer’s report for the financial year which reviews expenditure over almost 3 years and uses that to estimate the budget and levies which need a serious increase to start to make good the terrible state we have started from. It sets out the reasoning in some detail. I had hoped to have that report acknowledged by the owners in a motion at the meeting but, while they will include the report in the meeting papers, they do not want to have such a motion. The report includes the administrative fund budget, with the capital works fund budget coming from the 10-year capital works plan we developed ourselves to replace the last plan from 2018. The new plan is being put forward for adoption by the owners in a separate motion. But the budget they want to include is the one their systems will generate which almost certainly will be woefully inadequate. I think they will accept the proposed levies based on the the treasurer’s report budget but they will be inconsistent with the budget they will put forward.
I had also suggested that there be two contingent motions regarding the extension of contract, one in the case of self-management being adopted and one for full retention of them as strata managers, both clearly specifying the term of the extension, one of which would lapse depending on the outcome of the self-management motion. They have come back and said they only want a single motion reappointing them for their standard term of 3 years, which we can amend to the 3 months they need to prepare for transfer.
Are they not obliged to accept the strata committee’s requests for the conduct of meetings?
What options do we have other than just rolling over and acceding to their intransigence?
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What exactly were they hoping to do that would take them three months? The Pica group prides itself on having the latest whizz-bang technology for keeping its records up to date and accessible at the press of a button. It’s not intransigence – just a lack of motivation to look after a customer they have already lost.
What’s the worst that could happen if you stick by your dates? The sky will not fall in. Remember, they work for you and not the other way round.
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.
This is a clear case of the strata manager pulling the wool over the owners’ eyes and calling the shots.
CONTRACT TERMINATION: Have a look at your contract to determine the exact date it terminates and whether there are conditions imposed on earlier termination.
SECRETARY: As secretary, you can call your own meeting of the owners at any time. You don’t even have to let the strata manager know. Refer to Strata Schemes Management Act 2015 . Schedule 1 Meeting procedures of owners corporation. NSW Legislation web site.
AGENDA ITEMS: If you read the meeting procedures part of the Strata Schemes Management Act 2015, you would find all the rules for adding items to the agenda. My understanding is that owners can add items to the agenda. Strata manager cannot tell the Secretary how to draft their motions.
BUDGET: As owners, you can vote to reject any strata manager proposed agenda item. I’ve done that. I struck out items we did not need and reduced the levies accordingly. I did it during the meeting. Strata managers don’t like me because I am not their rubber stamp. What you should be doing is having a discussion about the budget, proposing your alternative and then voting. It would be preferable to let the other owners see your proposed budget beforehand. You can do that by either including it in the agenda papers or handing it to every owner personally.
Always remember that the Owners Corporation is ultimately responsible and in charge of everything. The strata manager answers to you. This point was made clear to us by an NCAT member. An owner applied for “compulsory appointment of strata manager” for a period of three months. The NCAT member mused over the idea of giving the appointment to our existing strata manager! His reasoning was that the owners corporation was ultimately responsible for the strata plan. If the plaintiff was seeking to usurp the owners corporation, then the member preferred to appoint the existing strata manager with the powers of the strata committee. In the end, the application was dismissed.
Forgive me for being cynical, but are they trying to hide something?
One of my favourite aphorisms: “Never ascribe to malice anything that can just as easily be explained by incompetence.”
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.
Excellent. Seven days is much better than three months!
ALTERNATIVE METHOD FOR PAYMENT OF LEVIES: When we became self managed, we passed a motion to open a bank account with Commonwealth Bank. We also had a motion to indicate who was the secretary, chairman and treasurer. Commonwealth Bank has a process in place to open bank accounts for self managed strata. Our Comm Bank staffer was reading from a list of instructions on his computer. Other banks did not know where to start.
We had to show the bank the minutes of the meeting where the motions were passed. They asked us to get every owner in attendance to sign the minutes. The bank asked to see our memorandum of articles. I said we did not have any. They asked about “rules”. I showed them our registered by-laws. The bank account was named after the strata plan.
We were lucky to have a bank manager, who was serving on the strata committee of a self managed strata. He told us we would save a lot of money by going self managed.
We were lucky to have a bank manager, who was serving on the strata committee of a self managed strata. He told us we would save a lot of money by going self managed.
This is a very broad statement when you balance the investment of personal time to manage the property (because not having an SM doesn’t mean you get to stop doing all that is needed) vs the fact that not all companies are out there trying to make a tonne off your scheme.
The company I work for has fees that run between $1 to $2 per day per lot and we’re very upfront with notifying when requests could result in a schedule b charge and give the committee an opportunity to side step it or accept it.
When everyone gets along, it’s great. The first person that doesn’t like how things are going or the first by-law that starts getting broken it will be then you have to wonder if $1-$2 per day per lot is worth the headache.
We were lucky to have a bank manager, who was serving on the strata committee of a self managed strata. He told us we would save a lot of money by going self managed.
This is a very broad statement when you balance the investment of personal time to manage the property (because not having an SM doesn’t mean you get to stop doing all that is needed) vs the fact that not all companies are out there trying to make a tonne off your scheme.
It is a lot of work. Fortunately, I know how to use a computer. I have spreadsheet, word processor, personal finance software, a laser printer, a scanner and plenty of paper and envelopes. The most important thing is trust. With the money we saved, we completed two expensive capital works projects which benefit all owners in the strata plan. Had we not rid ourselves of the strata manager, we would still be dreaming of making just one improvement to the common property.
The company I work for has fees that run between $1 to $2 per day per lot and we’re very upfront with notifying when requests could result in a schedule b charge and give the committee an opportunity to side step it or accept it.
You are saying that not all strata managers should be tarred with the same brush. You are defending the honour of the honest strata manager. Unfortunately, I have not met one of those.
My family suffered at the hands of a rather pathetic strata manager since the 1970s. We got rid of them when I asked them to stop wasting money.
The real cost of our strata manager was $4,900 per year. The dodgy thing was that they split this into two amounts so that we wouldn’t know how expensive they were. At the annual general meeting, they presented a contract with management fee of $3,600 per year. A few minutes later, when it came time approve the budget, a further $1,300 in management costs was added. These costs were nonsense:
$950 per year for “postage, copying, calls”. Each month a different amount was charged. It added up to exactly $950 at the end of the year. I could not see how these amounts coincided with anything like issuing meeting agendas or financial statements.
$130 per year for tax return which we did not need because we have no income
$220 per year for insurance valuation paid to a company owned by the strata managerWhen everyone gets along, it’s great. The first person that doesn’t like how things are going or the first by-law that starts getting broken it will be then you have to wonder if $1-$2 per day per lot is worth the headache.
I have dealt with by-law breaches, parking in the wrong place, unpaid levies, court hearings, verbal abuse, people hosing each other with water. Some owners have the idea that if they pay levies, strata should make their life utopia.
Can I inject a note of caution here? Strata management is complicated, and from this history, you and your fellow owners have muddled though only from luck, and stumbling across people who voluntarily helped, like a bank employee. A building with 8 Units is quite large, and I have to wonder if you can self manage the plan with your lack of experience. It sounds like you plan to embark on a program of repairs and improvement, with the increased investment in the building, and doing that without good strata knowledge is going to be a struggle.
I understand you not renewing with your present strata manager. But it might be better to find another one, perhaps one that is not part of a slick huge corporation. I would recommend (for all buildings) that the contract with your strata manager should only be for one year (not 3), which means you renew it at each AGM. You can negotiate with a strata manager for them to take over a limited set of duties – the committee can do all the quote getting, contract reviewing and bin cleaning, and leave the strata manager to manage the accounts and provide advice about the complex stuff, like fire safety Orders and Schedules, insurance, by-laws and so on. Be aware that some other owners might take advantage of your inexperience, and act up, since none of your committee members know anything much about strata laws, I assume.
Hi quirky, I don’t know if you are addressing the original poster (Newyboy) or me. You appear to be addressing two people as if they are one. Newyboy has not left their strata manager. I left five years ago. I was reflecting on my own experience to give others hope.
Strata management is complicated, …
I notice in this (and other) threads a little bit of push back from the strata managers. It is the same old tactic of saying that strata management is so complicated that mere laypeople like me could never do it.
Instead of telling the layperson to back off and let the strata manager take over, why not EDUCATE the layperson? Encourage them to read the Strata Schemes Management Act 2015 so that they know the rules.
… and from this history, you and your fellow owners have muddled though only from luck, and stumbling across people who voluntarily helped, like a bank employee.
Who’s history? Mine or Newyboy’s? We’ve already become self mentioned. The bank manager provided me no material support, except to open a bank account. That’s their job. In my earlier post, I detailed what was needed to open an account to inform anyone who wants to know what to do.
I have not stumbled across anyone to help me. The only voluntary helper is me.
I find it offensive that you suggest I muddled through only from luck. I spent hundreds of hours recording every financial transaction into finance software, going back 50 years (probably overkill), setting up spreadsheets to produce financial reports for the AGM and levy notices for the owners. My reports look exactly like the ones produced by the strata manager. I studied every line of Schedule 1 of the Strata Schemes Management Act 2015 to make sure I prepared the meeting notice, agenda and minutes completely.
In the midst of Australia’s “cost of living crisis”, our strata levy remained the same for the past five years. Our costs have decreased. With the money saved, we completed two significant capital works projects and we’re now saving for solar panels and solar batteries. All the other strata plans in our neighbourhood complain that they can’t get repairs done because they don’t have the funds.
It’s not luck. It’s hard work and brains.
A building with 8 Units is quite large, and I have to wonder if you can self manage the plan with your lack of experience. It sounds like you plan to embark on a program of repairs and improvement, with the increased investment in the building, and doing that without good strata knowledge is going to be a struggle.
From my experience: our strata manager’s capital works plan was not worth the paper it was written on (and we paid $400 for it). I compiled a new one on a spreadsheet. I can move projects forwards and backwards in time and the capital works budgets adjusts itself automatically. It is important to get the owners involved in the decision making. Together we choose the projects which have the greatest need or benefit.
I understand you not renewing with your present strata manager. But it might be better to find another one, perhaps one that is not part of a slick huge corporation.
Newyboy has not quit their strata manager yet. I have been self managed for five years.
You can negotiate with a strata manager for them to take over a limited set of duties – the committee can do all the quote getting, contract reviewing and bin cleaning, and leave the strata manager to manage the accounts and provide advice about the complex stuff, like fire safety Orders and Schedules, insurance, by-laws and so on.
Good luck with that. Our strata manager had a term in their contract which allowed them to spend up to $500 for repairs without seeking the consent of the owners corporation. Every repair, no matter how complex or simple, would cost $495 or $490. We voted to instruct them to stop doing this and a couple of of other questionable practices. They terminated the contract.
- Fire safety is not complex. You can google it.
- Insurance is more expensive when sought through a broker. You can google strata insurance, find a cheaper provider and avoid paying the 20% brokerage.
- By-laws: are explained in the Strata Schemes Management Act 2015. To update by-laws, I took the Certificate of Title, the minutes of the meeting and the updated by-laws to the Land and Property Information Office and registered them personally. Cost $146. If we let the strata manager do it, $550. (Nowadays, the registration of by-laws has to be done via a brokerage service.) Nobody told me how to do this. Certainly not the strata manager. I figured it out with google.
Be aware that some other owners might take advantage of your inexperience, and act up, since none of your committee members know anything much about strata laws, I assume.
Yes and No. They try to act up. They also know that if they go back to strata management, that’s $10,000 per year down the toilet. Owners can be entitled and abusive. I don’t like verbal abuse but I hate wasting money even more.
Strata laws: The Strata Schemes Management Act 2015 and the Strata Schemes Management Regulations 2016 are on the internet. They are the bible for any self-managing strata committee. Web sites like FlatChat, Fair Trading, Owners Corporation Network and various strata lawyers are good too. I prefer to check what the law says first. I also read judgements from past cases in NCAT.
@tina, you make valid points. Huge kudos to you (and I’ve had a similar trajectory, although my large building is not self-managing, but over the years as a strata committee member, and more lately, secretary, my strata knowledge has expanded in leaps and bounds). Nonetheless, you still make my point to @newyboy. I urged caution when moving to self-management, especially with a largish 8 Unit apartment block.
And @tina you very ably set out the course that @newyboy and fellow owners will need to take. Not many owners want to devote so much effort as you have, and some may not have the ability or time to do so. But @tina’s type of effort is what will be needed it you want to self-manage your building.
I also need to point out that strata managers will take on buildings with only a limited set of management duties contracted to them. The larger, often corporate, strata management conglomerates will insist on their management contract being accepted exactly as presented. But other strata managers certainly will negotiate their management contract individually. Just go shopping!Note, that you can’t assume an agency with a unique name is an independent strata manager, as big companies are gobbling up smaller agencies, and keeping the original name – you must ask if the agency you are dealing with is independent, who owns them (and if it’s a company not the agents in the office, be careful!), and if they will negotiate a specific set of duties for your building, and then work through the agency agreement and strike out the tasks you want handled by the strata committee and leave those you don’t!
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