Most of us get into strata living with pretty simple expectations – pay your levies, let the building run itself, and get on with your life. But if those levies keep creeping up year after year and you can’t quite work out why, there is a decent chance that something is amiss.
Overcharging in strata management is far more common than people realise, and it tends to fly under the radar precisely because most owners don’t know what fair price in strata management looks like. Whether your strata property manager has been in the role for years or you have recently taken on a new one, this guide will help you spot the warning signs and take back control.
Most Common Warning Signs That a Strata Manager Is Overcharging Property Owners in Australia
The most obvious sign that something is wrong is levy increases that no one can really explain. A small rise in price in line with inflation is fair enough, but if your contributions have jumped 15–20 per cent without any corresponding increase in actual costs – no major repairs, no insurance spike – that is worth pushing back on. Your strata manager should be able to point to a clear reason for any significant increase, and if they can’t, that tells you something.
Vague financial reporting is another classic red flag. Every owner has the right to know where his/her money is going. If your manager is sending through high-level summaries that don’t really say anything, or being slow to provide itemised statements when asked, transparency is clearly not a priority – and that is a problem.
Keep an eye on which contractors keep appearing on your invoices too. Some managers send work to businesses they have financial ties to, often at rates above market value. Seeing the same suppliers pop up repeatedly, especially for routine jobs that any number of tradies could handle, is worth questioning.
And if your management fees are sitting well above the industry benchmark of $800 to $2,500 per lot per year, that deserves a closer look as well. Routine communications – e-mails, letters, phone calls – should all be covered in your base fee, not itemised as extras every time someone picks up the phone.
How to Identify Hidden Fees in Strata Management
Hidden fees tend to hide in plain sight – small charges that look harmless individually but add up quickly when you look at the full picture. Disbursement fees are one of the most common examples. These are charges for postage, printing, or basic admin that most modern strata businesses handle digitally at minimal cost.
Being billed $5 to $10 per letter might seem trivial, but across a full building and a full year, it is a tidy sum going straight to the manager for very little effort.
Meeting fees are another area to watch. Preparing for and attending the AGM – including writing up the minutes – should be standard inclusions in your management fee, not add-ons billed separately.
After-hours call-out fees can be legitimate when a real emergency hits, but some managers apply them loosely to after-hours queries that are anything but urgent. Get the definition of ’emergency’ in writing before it becomes relevant.
Then there are maintenance coordination fees – a markup of anywhere from 5 to 15 per cent tacked on top of a contractor’s invoice simply for making the booking. Unless your contract spells this out explicitly, you shouldn’t be paying it. The best way to get a clear picture is to ask your strata property manager for a full, itemised fee schedule and compare it line by line against what has actually been charged. Anything that doesn’t match deserves a straight answer.
Typical Red Flags in Strata Management Contracts That Indicate Overpricing
Your management contract sets the rules of the relationship, so it is worth reading it carefully before you sign or renew. Automatic renewal clauses are a classic trap – if your agreement rolls over for another 12 months unless you give 90 days’ notice, and that window is buried in the fine print, you could easily miss your chance to renegotiate and be locked in at above-market rates for another year.
Vague fee language is another concern. Phrases like ’reasonable disbursements’ or ’additional services at the manager’s discretion’ give the manager enormous latitude to charge for almost anything. Fixed fees or per-lot pricing are far more transparent than arrangements that tie management fees to total scheme expenditure – because when a manager earns more as your building spends more, their incentives and yours are pointing in opposite directions.
Watch out for contracts that treat standard services – AGM attendance, levy processing, routine correspondence – as extras billed on top of the base fee. And if there is no straightforward way to exit the agreement without proving misconduct, you have very little leverage. A decent strata property manager should be confident enough in his/her service so that he/she doesn’t need to lock you in to hold your business.
Compare Fair vs Overpriced Strata Management Fees
The gap between fair and overpriced strata management fees can easily reach $10,000 to $25,000 a year for a typical 20-lot residential scheme in Victoria – money that should be sitting in your sinking fund, not padding a management company’s margins.
It is also worth noting that fees vary by location: Perth-based strata management companies operate in a different market to Sydney or Melbourne-based strata management companies, and tend to offer more competitive pricing.
OurBodyCorp’s platform lets committees benchmark their costs against comparable schemes in their area, so that you always know whether your fees are in the right ballpark.
How Property Owners Can Audit Their Strata Expenses Step by Step
You don’t need to be a financial expert to audit your strata expenses – just need to be methodical. Start by requesting two to three years of financial records from your strata manager – income and expenditure statements, levy registers, and bank statements. You are legally entitled to these in every Australian state, so don’t be put off if there is any hesitation.
Next, pull out your management agreement and map every service that should be included in the base fee. Compare that list against your actual invoices – anything that should be included but is showing up as a separate charge is worth flagging. From there, match every line item in your financial statements to either a contracted service or an external invoice. No clear paper trail? That is a query.
Run a quick check on your regular contractors at abr.business.gov.au to see if there are any share directors or addresses with your management company. Related-party arrangements aren’t automatically wrong, but they must be disclosed. Then get two or three comparison quotes from alternative providers. If you are in WA, this step is particularly worthwhile – strata managers Perth households generally work with tend to be competitive, and a few quotes in hand gives you real leverage in fee discussions.
Finally, put any concerns in writing to your manager first, and if they are not being addressed, escalate to the relevant state regulator.
A Checklist for Spotting Unnecessary Charges in Body Corporate Fees
Run through these questions at your next committee meeting or when your annual statements arrive.
Are levy notices charged per item, or is distribution included in the management fee?
Is there a markup on contractor invoices above the original quoted price?
Are routine phone calls and e-mails with owners billed as separate line items?
Are AGM and EGM preparation, attendance, and minutes charged as extras?
Is there a fee for preparing or sending out meeting agendas?
Are insurance renewals attracting a separate coordination fee on top of the premium?
Are after-hour rates applied to situations that aren’t genuine emergencies?
Is sinking fund interest being retained by the manager rather than credited back?
Are owners charged to access records they are legally entitled to view?
Have fee ’indexation’ increases been applied without that being in the original contract?
Ticking more than a couple of these boxes is a clear sign that it is time to have a direct conversation with your strata manager – or start exploring your alternatives.
What Questions Should Owners Ask Their Strata Manager to Detect Overcharging?
Ask your questions in writing wherever possible – a paper trail matters if things escalate later. Start by requesting a full itemised fee schedule covering all disbursements and any charges outside the base fee. A trustworthy strata property manager will provide this without hesitation. Vagueness or delay is itself a cause for suspicion.
Ask whether any regular contractor has a financial connection to the management company, and whether that has been disclosed in writing. Also, ask how competitive quotes are handled for maintenance jobs above a set threshold – in Victoria, the bar is around $3,000 – and request evidence that it is actually happening. Clarify the definition of an after-hours emergency and the rates that apply, and ask plainly what is and isn’t included in your base fee.
On insurance, ask to see evidence of the last few competitive tender processes. A good strata manager should be actively shopping for the best rate, not just auto-renewing with the same insurer every year.
And make sure you understand your exit rights: what notice is required, and under what circumstances can you leave early? This is especially worth clarifying if you are in WA, where strata managers and Perth house owners generally work with operate under state-specific legislation that shapes your options.
Take Control of Your Strata Finances
Overcharging often survives on the owner’s disengagement. When finances are hard to read, and no one at the AGM knows what to look for, costs have a way of drifting well above what is reasonable. But once you start asking the right questions, things tend to come into focus fast.
OurBodyCorp gives committees real-time financial visibility, clear expense reporting, and the tools to hold their managers to account – whether you are managing a small block or a large complex. If your gut has been telling you that your current strata property manager isn’t delivering fair value, trust it. Run through the checklist, ask the questions, and if the answers don’t add up, that is exactly what we are here for to address.
OurBodyCorp is a strata management software company based in Hawthorn, Melbourne, helping body corporates across Australia manage their schemes with greater transparency, efficiency, and owner satisfaction. Browse this website to learn more.
FAQs
How can I tell if my strata manager has been overcharging?
You can find whether your strata manager is overcharging or not by comparing quotes from more than three competitors, through audit levies against services delivered, by checking for unexplained fee increases, and reviewing disbursements line by line. Request for a full financial statement annually.
What are the common hidden fees in strata management?
They include after-hour call charges, per-letter/email fees, insurance commission kickbacks, meeting attendance fees, maintenance coordination markups, and “disbursement” line items, which aren’t clearly explained, among others.
How much should strata management fees typically cost in Australia?
It should cost roughly $800–$1,500/lot annually, varying by state and scheme size. Larger schemes cost less per lot. Strata management fees in Sydney and Melbourne tend to be higher than in other parts of Australia.
Are strata management fees regulated or fixed?
They are neither regulated nor fixed in Australia. Strata management fees in Australia are market-driven and negotiated by contract. NSW, VIC, QLD, and WA each have different strata laws, and none set fee caps.
What services should be included in standard strata fees?
Levy collection, meeting coordination (AGM/EGM), financial reporting, correspondence handling, by-law advice, maintenance coordination, and insurance renewal should be part of standard strata fees. Anything beyond this is often charged as an extra.
How can I compare my strata fees with market rates?
Request competing quotes annually, use platforms like Strata.guru or local industry associations, and ask your owners’ corporation committee to benchmark fees at each contract renewal.
What are the red flags in a strata management contract?
Auto-renewal clauses, long notice periods to exit, vague disbursement descriptions, uncapped additional fees, insurance commission retention, and no performance review provisions are all warning signs in a strata management contract.
Can I request a breakdown of strata management charges?
Yes, it can be done. You have a legal right to inspect financial records in all Australian states. Request an itemised invoice and full disbursement schedule. A good manager will provide this without hesitation.
What should I do if I suspect overcharging by my strata manager?
Raise it formally in writing, request full financial records, escalate to your state’s strata regulator (e.g., NSW Fair Trading), or seek advice from the Owners’ Corporation Network or a strata lawyer.
What steps are involved if you want to change your strata management provider?
Checking your contract’s exit clause and notice period (which typically ranges from 30–90 days) is required before switching to another strata management provider. Generally, a majority vote at a general meeting is required for shifting to a new strata management provider.
