Are strata managers mandatory or are other arrangements available? – Christine, NSW

Strata manager fees always seem to increase at a rate of x% per year (for example, 8% per year). This means 8% of a continually increasing amount. In other words – an exponential increase over time that benefits the strata manager exponentially, but conversely exponentially disadvantages strata owners. Is the use of strata managers mandatory? If not, what other kinds of arrangement can be made?

– Christine, NSW

Engaging professional strata managers is not mandatory per se. They usually help the owners corporation with day to day work and make sure the strata property is running smoothly. Since they have experience and expertise in the field, they usually are able to help with laws, regulations and the finer technicalities of strata property management that would otherwise be the entire responsibility of the owners corporation and their appointed committee.

However, if your property has been mismanaged in the past or your owners corporation is unable to run it as per the law or regulations, the Tribunal may appoint a compulsory strata manager to serve on contract. Here is an article on compulsory strata manager appointment that may be of interest to you.

Smaller properties may be self-managed but it depends on the efficiency of the owners corporation. For larger properties with more than three lots, engaging a licensed strata manager can take the burden off of the owners corporation.

Strata managers are contracted for a period of 12 months. They charge a certain fee for their services, which are commonly subject to price increases from year to year. They also have contacts with industry professionals, tradesmen and other agencies that can help with the smooth running of strata matters. Having an outsiders perspective and experience with running many strata properties allows strata managers to help resolve a wide range of concerns and coordinate between the different stakeholders in a more efficient manner. Also, larger properties are often more complex to manage and thus can attract higher fees.

You may also visit the NSW Fair Trading website which has further information on the responsibilities of strata managers.