How does strata management work?
Tue August 29, 2017
Buying your first strata-governed property? If you're in NSW, then you're definitely not alone - the Strata Community Association estimates that strata accounts for over 50 per cent of all residential sales and leases in Sydney. There are currently more than 270,000 strata schemes in place Australia-wide, according to the Association.
Strata currently accounts for over 50 per cent of all residential sales and leases in Sydney.
Strata management is fundamental to the smooth running of these complexes. However, it can seem a bit confusing from the outside. That's why we've put together this article to explain what it is, how it works and how it benefits you as a property owner.
What is strata management?
When you buy a property that belongs to a strata scheme, you own a 'lot' - that is, the apartment or townhouse that you've bought. You also jointly own common property with other lot owners under the same strata scheme - things such as external walls, roofs and stairways. The maintenance and repair of these common areas is under the responsibility of the Owners Corporation, which appoints a Strata Committee to make decisions regarding the day to day running of the Strata Plan. The Owners Corporation can decide to manage the strata scheme on its own or appoint a Strata Managing Agent. A Strata Managing Agent is responsible for all of the activities that the Owners Corporation would otherwise perform. These are things such as:
- Organising meetings of the Owners Corporation and Strata Committee.
- Collecting levies to maintain the strata scheme.
- Ensuring that the strata scheme complies with necessary legislative requirements.
- Financial reporting, budgeting and general accounting for both Trust accounts.
- Enforcement of rules/by-laws.
- Invoicing of levies/service charges.
- Issuing notices, minutes, letters, orders and certifications.
- Coordination of tradespeople.
- Advising of compliance issues including by-laws, fire safety, WH&S and so on.
A Strata Managing Agent will sign a Management Agreement with the Owners Corporation to ensure their rights and responsibilities are clearly understood by all parties. It's important to ensure that any strata manager appointed holds a current Strata Managing Agent's licence, otherwise they are not legally entitled to perform any strata management duties delegated under the Agreement.
To find out more about strata management and how it works, download NSW Fair Trading's Strata Living booklet.
How does strata management benefit you?
Strata schemes don't necessarily require strata management, however it is highly recommended that a Strata Managing Agent is appointed to run one, for the following reasons:
- They have professional knowledge and experience: Strata Managing Agents have the training and expertise to manage a strata scheme right from the get-go. They also have experience in dealing with tricky situations, or instances when members of the Owners Corporation or Strata Committee may not be able to reach a consensus. They can offer their professional advice on the best way to proceed that will ensure all parties are satisfied with the outcome.
- They're aware of all the legal stuff: Strata Managing Agents will be aware of the correct processes to follow, and will ensure that your strata scheme is compliant with all necessary legal requirements, including the new legislation that took effect on November 30 2016.
- They take away the hassle: Having a Strata Managing Agent means there is one person responsible for handling all the meeting scheduling and administration - things that can be time-consuming for the Owners Corporation to handle themselves. Everyone still has their say in the decision-making process, but the nit-picky procedures are handled by a professional.
How can you ensure you've got the right kind of strata management?
You'll need a Strata Managing Agent who is professional, open and efficient in the way they do their job. At Laing+Simmons Strata, we offer professional service, in-depth knowledge and in particular, prompt communication. Lack of communication is the main issue for Owners when dealing with Strata Managing Agents. We also recognise that each strata scheme is different and requires a tailored solution. Our strata management services have been designed with this in mind, with all our Strata Managing Agents trained in providing clients with services that meet their needs.
We also have an online portal that allows you to pay your strata levies online, view important strata-related documents and submit maintenance requests, making things easy and efficient for everybody.