How to Change Strata Managers

A strata manager is responsible for a block of units, apartments or townhouses. Instead of managing individual properties, strata managers or body corporate managers manage the common property and amenities available to all residents. Strata managers perform critical functions and the lot owners, as a collective, rely on a prudent, thorough and comprehensive service. Strata managers will liaise directly with the body corporate committee. The body corporate committee is generally nominated by the owners at the Annual General Meeting. The committee represent the owners, promote their interests and act in their best interests. To perform the day-to-day operations, the body corporate committee outsource these tasks to a professional strata manager.

Strata managers perform several duties, including:

• Communicating with the body corporate committee, owners and tenants;
• Dealing with maintenance issues relating to the common property;
• Dealing with all correspondences regarding the property;
• Selecting competitive insurance providers;
• Lodging and managing insurance claims;
• Providing documentation on request;
• Preparing budgets, monitoring payment of invoices and tracking expenditure;
• Managing the amenities and building services;
• Liaising with the building manager (if such a manager exists);
• Enforcing rules of the body corporate;
• Mediating disputes between lot owners;
• Holding information events and attending meetings; and
• Maintain and archiving minutes of meetings and records.

It is important the body corporate committee oversee the actions of the strata manager to ensure that it is performing to a high standard that conforms to the strata management agreement and their legislative obligations. The body corporate committee should monitor compliance with agreed service level standards and ensure that the strata manager remains responsible and accountable. Any issues should be addressed in a timely manner so that problems do not escalate.

Steps to Change Strata Managers

If you are a member of a body corporate committee that is not pleased with your existing strata manager, you might need to consider changing strata managers. Although you, alone, cannot make that decision (unless you hold more than a majority of the votes), you can propose to the committee that they reconsider the appointed strata manager.

Here is a clear guide, with steps, to help your body corporate committee change strata manager.

    1. Make the proposal:

First, prepare a proposal to document your views as to why the strata manager should change. Engage in some preliminary research and provide as much information in the proposal document as possible to encourage a meaningful conversation at the next body corporate committee meeting.

     2. Check the existing strata management agreement:

At the meeting, ensure that you check the existing strata management agreement, relevant strata titles or owners’ corporation legislation, and any supplementary agreements and rules. Some arrangements might require certain procedures to be completed before the strata management outsourced provider can be changed. In addition, check the terms of the existing strata management agreement, including the termination dates and notice requirement period.

     3. Seek body corporate agreement:

There should then be a motion at the body corporate committee meeting to change the existing outsourced strata manager. The quorum and voting requirements needs to comply with relevant legislation and body corporate rules. The resolution needs to be recorded in the minutes. This resolution will now allow the commencement of the due diligence process.

      4. Perform due diligence:

Following a resolution to change strata manager, you now must consider who the new strata manager will be. Ensure that the body corporate committee has created a sub-committee or working group to research and perform due diligence on the prospective new strata managers. They should be given sufficient time to adequately conduct their research, obtain quotes and hold various meetings with the prospective new strata managers to understand their services and value-add initiatives.

      5.  Present observations:

Following the due diligence period, the sub-committee or working group should present their observations to the body corporate committee. This can be an opportunity for other committee members, who have not been involved in the due diligence process, to receive information, challenge views and request further information.

     6. Engage in any follow-up work:

Following the body corporate committee meeting, ensure that you engage in any follow-up work as requested by the body corporate committee.

      7. Call a General Meeting:

In accordance with the relevant legislation, existing strata management agreement and body corporate rules, you will need to call a General Meeting to confirm the appointment of a new strata manager. Ensure that you hold the correct General Meeting. Provide as much information as possible to those attending the meeting and allow sufficient time for the owners to understand the reasons and read up on the prospective new strata managers.

      8. Holding the General Meeting:

Hold the General Meeting in accordance with the legislative requirements and body corporate rules so that the resolution is valid and binding. The quorum and voting requirements need to comply with relevant legislation and body corporate rules. Document and minute the resolution for future reference.

      9. Prepare for the transition:

Following a successful resolution to change to a new strata manager, prepare for the transition. Your new strata manager can provide you with a checklist of what you need to do. Ensure that the transition is smooth and pleasant so that the outgoing strata manager assists in every way possible and provides all records in a clean format.

     10. Hand over to the new strata manager

Onboard the new strata manager and check that they have acquired all records and are converting all accounts to their system in a timely and comprehensive manner. In addition, hold a body corporate committee meeting with the newly appointed strata manager to discuss rules, delegations, administrative tasks, reporting requirements and any additional functions.

Common Reasons for Changing Strata managers

Here are common warning signs, amongst others, that should remind the body corporate committee to review their existing strata manager:

• Failing to account for certain expenditures;
• Not providing timely responses to questions;
• Performing tasks that do not comply with legislative obligations;
• Performing tasks outside of their written delegation;
• Lack of enforcement of body corporate rules;
• Communication errors;
• No oversight of the condition and maintenance of the building;
• Engaging poor maintenance contractors;
• Lack of understanding of best practice body corporate management; and
• No new innovative ideas to improve services and lower costs.

What to Look For in a New Strata Manager?

At Our Body Corp, we provide body corporates and owners with a range of service options to suit their needs and requirements. We provide nationwide support, professional services, advice and support, access to recognised maintenance service providers and the ability to leverage our maintenance plans and project management plans.

In your search for a new strata manager, ensure you look for the following key features.

• Respected and reliable strata management team who understand the industry and have years of experience;
• Capable in sourcing qualified and responsible trades people to attend to maintenance issues;
• Sit in body corporate meetings and present helpful and innovative ideas;
• Use a strata management system that achieves best outcomes regarding raising levies, issuing communications, tracking expenditures and monitoring disputes;
• Provide a flexible approach to strata management;
• Listen to the views of the body corporate committee;
• Stands behind the services they provide and justifies their fees;
• Is available for discussion when required and provides timely and complete responses; and
• Demonstrates initiative and provides value-add services that help the owners complete their tasks and achieve their objectives.