Choosing A Strata Manager
Finding The Right Strata Manager
Going into business continues to be one of the best, if most challenging, ways to make a good living these days. Just as challenging is choosing a strata manager for your property. While the risks are quite real for starting a business, the possible rewards continue to be inviting enough to encourage quite a lot of people to give it a shot and invest. For instance, real estate is a business type that has continued to be in demand because of the ever-present need for people to be housed. Individuals and families alike continue to need a place to stay, and as such the real estate industry continues to maximize available property and cater to that very real necessity.
Of course, sometimes such simple-sounding matters are complexly tiered in reality. For instance, common ownership in apartment buildings is hardly as simple as it sounds as there are a number of factors involved. One of the fastest-growing housing types in the US, multi-level (strata) apartment block ownership has come to be dealt with using an Australian standard and system that has been adopted in other markets like Fiji, Singapore, Indonesia, the United Arab Emirates, Canada, and the Philippines. “Strata title” is the term given to this ownership, which pertains to multi-level apartment blocks and even horizontal subdivisions that have common or shared areas. This is not a particularly new concept, first having been adopted in 1961 in New South Wales, Australia, replacing the flawed company title system that had trouble easily instituting mortgages, as well as other weaknesses.
Strata title schemes show lots as apartments or garages or perhaps storerooms, with a Lot Owner identified on the title as owning each. Outside of these specific owned lots will be the Common Property, which includes gardens, roofs, paths, stairwells and other such non-individually-owned areas on the parcel of land. It’s worth noting as well that typically a lot owner owns the inside of their lot unit, but not the structure itself – the four main walls, roof, ceiling, and floor are viewed as common property. This sort of joint ownership typically – in most jurisdictions – binds all the collective owners with a shared responsibility for the maintenance, management and upkeep of the location, from common areas like pathways and corridors to shared facilities like pools and gyms. Overseeing all this and running the administrative and financial aspects of the property will be the strata manager.
Ideally strata management should be carried out by knowledgeable and reliable managers, who can handle the many tasks assigned to them – budgeting, general accounting for the property and fees, collecting arrears, managing contracts, enforcing rules of the property and all by-laws, coordinating maintenance duties, reporting the state of finances, generally issuing the usual circulars and notices, and others. In Australia, strata management is covered by law (Strata Schemes Management Act 1996, Strata Schemes Management Regulation 2010 and others), and even the appointment of a managing agent is subject to a majority vote as per legislative stipulation.
We don’t always have the opportunity to pick our strata managers – indeed when many of us buy an apartment we walk into a preexisting situation that we usually don’t get to affect until a particular point. However, should your current strata manager’s contract happen to be up for renewal – allowing you to make a decision as to who the next one should be – it then becomes relevant and even crucial that you take certain factors into heavy consideration. What factors should you consider in picking a good strata manager?
- Cost. The old expression “you get what you pay for” is usually applicable to situations such as these, since money and expectations are inextricably involved. However, it’s also typically good advice to pay close attention to what you’re paying FOR. Your building may be a high-end one that has a lot of concerns and specific maintenance needs, in which case it would be practical to select a strata manager that may charge a lot up front but guarantees an all-inclusive service. This beats out the alternative – a cheaper main fee with many “as-needed” charges that could actually add up and turn the overall price into a less ideal value. On the other hand, if the needs are less particular and more general – or if the building has a more active homeowners’ committee that can tackle many of the issues – then a lower-priced manager whose bulk of the cost is in special cases like calls, meetings and the like might be a better fit.
- Relationships. If the strata manager has been in that position for a significant length of time, what is the primary reason? If lack luster performance is offset – or outright dismissed – thanks to a tight relationship with the committee, this might be something worth examining. If the manager is unable to form a good, longer-term working relationship with the team because none ever lasts more than three months, this is also a red flag as far as commitment goes. When selecting managers always see if you can meet them in person, rather than just speaking with a higher-up who won’t even be directly involved in handling the day-to-day concerns.
- In light of the need to meet the potential strata managers in person, one of the main reasons is so that you can directly convey the expectations that they are to meet. Of course, a large part of this is already in the job description, but it’s important that they see that you know all this as well so they know better than to under deliver. It’s also crucial that this be discussed face to face so that they can verify if the expectations match the budget for fees that you might be operating with, or if the expectations are unrealistic. On the other hand, some other candidates will be open to negotiating to make sure your needs are met and the price that is set is nevertheless a fair one. However the haggling goes and whatever terms you end up agreeing on, make sure to get everything in writing.
In the end do your research talk with friends and family to finding the right strata manager for your property