Strata Management Duties and Responsibilities in Australia

Strata Management Duties and Responsibilities in Australia
Posted on Posted in Body Corporate, News, Strata Management

According to the Property, Stock and Business Agents Act 2002 (NSW), a strata manager is a person who, for some reward, carries out various owners’ corporation functions outlined in the Act. Strata managers are commonly confused with property managers. However, strata managers neither rent out nor sell properties.

 

A strata manager, also called a body corporate manager, an owners’ corporation manager, or a strata managing agent is in charge of a group or block of properties that are jointly owned. The manager ensures that the building is insured, compliant with local laws, and is being maintained, and ensures that the properties’ administration is up-to-date and accurate. To better understand the duties of a strata manager, we need to under what is “strata”.

What is a Strata?

Strata, also popularly referred to as a strata scheme or a strata title is a scheme which allows for part ownership of the property or a ‘lot’. The lot can either be a unit, an entire apartment, or a townhouse.

 

Along with owning the lot, the owner shares common property including driveways, lifts, parks, gardens, and pools with the rest of the lot owners. When purchasing a strata unit, you buy into a community.

 

You are, therefore, required to observe the duties and responsibilities that could include:

- Parking only in your parking bay
- Managing your pet appropriately
- Ensuring that your guests act per the owners’ corporation or body corporate rules
- Observing any noise regulations
- Not damaging or littering common property
- Obtaining necessary approvals if you intend to make changes to your unit (including its façade)

 

All the lot owners make up the owners’ corporation and appoint a strata manager to oversee the maintenance and financial integrity of the group of properties on behalf of the owners.

The History Of The Strata Title

This is a property title system that began in Wales, Australia, and which has over time been coined across the world. The strata concept was introduced only 50 years ago, and as of now, there are more than 200,000 strata schemes comprising of more than two million lots across Australia.

 

In the past, communal living schemes fell under the company title, and a potential buyer had to buy shares in that company to live in the property. The downside of this arrangement is that the buyer did not receive full ownership of the property. Consequently, such buyers found it hard to obtain loans from financial institutions.

 

In 1961, the New South Wales Government came up with a system for strata titled properties in the Conveyancing Act. This has been replicated in other regions across the world including countries such as New Zealand, South Africa, Canada, Singapore, Malaysia, and the UAE.

 

In Australia, other jurisdictions have followed New South Wales and passed their own strata laws. This has led to the expansion of the application of strata title from residential schemes to commercial, resorts, and retail set-ups. However, the concept remains the same, that is, part ownership of schemes along with shared ownership of common areas all of which are managed by strata managers.

Duties and Responsibilities of A Strata Manager

A strata manager oversees the day-to-day management of strata properties, and he or she is appointed by the property owners as a collective. Depending on the complexity and size of the property, the owners can decide to have more than one manager. Strata managers have systems, well-designed processes and experience that place them in a better position to carry out their functions than the property owners themselves.

 

The relationship between the strata corporation and the manager is governed by the contract between them, and so are the duties he or she should carry out. However, a strata manager provides his services to the whole corporation and not to individual lot owners.
They offer advice on common property management and are entrusted with the following duties and responsibilities:

1. Property Maintenance

The strata manager has an ever-growing role of ensuring that the people occupying a strata property are living comfortably. However, it is sometimes difficult for lot owners to differentiate between common property and what is on their lot.

 

The strata manager, with the committee’s approval, obtains quotes from contractors such as builders, gardeners, cleaners and others in relation to the common property’s upkeep. In fact, they are the first to be contacted if the strata building requires urgent repairs. In some instances, a strata manager has the mandate to approve minor maintenance decisions on behalf of the strata council without prior approval.

2. Keeping Custody of and Updating Records

Although it is the duty of the owners’ corporation to maintain up-to-date strata records, in most cases this duty is delegated to a strata manager. Section 180 of the Strata Schemes Management Act 2015 (NSW) and the Strata Schemes Management Regulations 2016 (NSW) require that strata owners keep the following documents for not less than seven years:

 

- Copies of all correspondence sent or received by the corporation;
- Notices of strata committee meetings;
- The minutes of each strata meeting along with the motions passed and agendas discussed;
- Voting papers related to motions for the passing of resolutions or election of the strata committee;
- Proxies that are delivered to the strata council. In this case, the 7 year begins when a proxy expires;
- The signed agreement between the owner’s corporation and the strata manager; and
- Records that the strata manager hands over to the owner’s corporation.

 

In the case of electronic votes, the papers must be kept for at least 13 months especially if they relate to secret ballots, a strata renewal committee or other decisions related to Part 10 of the Strata Schemes Act.

 

Strata management should submit these records to any mortgagee or owner who asks to inspect them on the condition that they pay the prescribed fee.

 

Previously, some of the above records required to be kept for only 5 years.

3. Financial Management And Taxation

Just like any property owner, a strata scheme is responsible for such things as the property’s building (not contents) insurance, payment of utility bills affecting common property, and carrying out regular repairs and maintenance. To cover the costs of these expenses, the owners’ corporation must come up with an administrative fund and a sinking fund to raise levies from the owners. While the administrative fund is used for day-to-day operational expenses, the sinking fund is required for future capital-related expenditure.

 

The strata manager prepares budgets and submits them to the owners’ corporation committee for necessary review and approval. He or she ensures that any monies the corporation owes and is owed are paid on time, including property owner’s levies. He or she will also monitor any invoices and make payments in a timely manner.

4. Administration And Setting Up Of Meetings

The strata manager is responsible for corresponding with the owners on property maintenance issues, periodic levies, notice for meetings, and any other general information regarding the strata property. He or she handles any correspondence regarding the property itself such as queries raised by the tenant that is directed to the owner. He or she also handles any queries from potential property buyers.

 

Apart from ensuring that the strata property is insured, the manager is responsible for the handling of any insurance claims and monitors the receipt of funds. He or she will archive all records. Upon request, the manager may be required to chair the corporation’s general meetings. In some cases, the strata manager could be asked to provide minutes from meetings to the owners’ corporation committee.

5. Interpersonal Relations And Sharing Information

In most cases, strata managers are responsible for ensuring that there is harmony amongst all owners. This implies that they have to carry out such tasks as:

 

- Clearly communicating the rules that govern the property to the residents and enforcing the rules. A strata manager will also amend these by-laws as and when necessary. This should be done in the interest of the owners’ corporation and should be for the sole purpose of enhancing the owners’ social cohesion.
- Mediating disputes between the lot owners in an unbiased manner. Managers could be involved in disputes over noise, incorrect parking, and pets. They also offer suggestions on how the harmony of the strata scheme can be improved.
- Strata managers are responsible for the organising of events and social occasions where they can get feedback from the residents on how they can improve their services.

 

The strata management is responsible for the setting up of annual general meetings, executive committee meetings where office bearers are appointed, and general meetings.

6. Ensuring Compliance With Building And Safety Requirements

No matter the size of the strata property, Australia has many laws and regulations that strata owners need to adhere to. These include lift and fire safety certifications. It is the duty of the strata manager to proactively research on applicable laws and regulations in the relevant jurisdiction to ensure the strata property is and remains compliant. Together with the strata committee, a strata manager should facilitate necessary assessments and ensure that the necessary services are available to residents.

7. Keeping The Strata Roll

The owner’s corporation is obligated to prepare a strata roll which in most cases is kept in the custody of the strata manager. A strata roll is for the sole purpose of serving notices and must contain:

 

- The owner’s or property manager’s full name, postal address, email and phone number; and
- The tenants’ full names, addresses, emails and phone numbers.

 

The strata manager then records the strata’s plan number, the building’s address, the strata’s bylaws, the names of the original owner along with an Australian address, and the total unit entitlements.

 

Although the strata management is responsible for the above duties, the owners’ corporation committee or strata council is responsible and accountable to the lot owners. It is committee or council’s responsibility to ensure that the strata management performs its duties and employ another manager should the current management team fail.

What Can A Strata Manager Not Do?

Strata managers are accountable to the strata council and they have no authority on their own (unless prescribed in writing). For this reason, strata management should not enter into or terminate contracts, issue breach notices to contractors, or approve non-routine expenditures without the council’s approval.

 

Strata managers cannot give legal advice, but can offer general information based on their skills and experience. A professional strata manager should suggest that a legal opinion be obtained should the owners’ committee or council have any doubt on an issue requiring specialist advice.

 

Since the manager is not a qualified builder or project manager, it is unlikely that a strata manager will give specific advice when it comes to property maintenance. An ideal strata manager suggests that an expert supervises any maintenance works and provides regular reports on any maintenance requirements so the committee or council can make an informed decision.

 

A strata manager should not add non-standard motions in the agenda of any meeting without the council’s approval. Such unauthorised motions could include a motion to renew the manager’s contract. This would be for the committee to decide.

Strata Manager Vs Property Manager

A property manager carries out his duties on behalf of a single property owner. He or she collects rents, arranges property maintenance, pays expenses and manages the property’s lease. Although a strata manager maintains the strata property, he or she can also provide a wider range of services including but not limited to representing the owners and their agents collectively. A strata management company performs its duties with the property’s best interest in mind to make strata living enjoyable and cost-effective. Strata managers provide their services to multiple owners under the same strata scheme.

Final Thoughts on the Strata Manager’s Position

Council members and strata title holders are not necessarily strata experts. Hence, they heavily rely on the strata manager’s good advice and expert suggestions in the management of their property. However, the strata manager is only as good as the owners they represent. The more proactive the owners are, the more duties they could delegate to the strata manager. This will lead to an effective outcome for all.

 

Technology and modern living have caused the position of the strata manager to become complex over time. The modern strata manager must deal with buildings boasting multiple features and manage building projects they could not previously handle. With this in mind, it is advisable that a strata manager undergoes continuous training. Obtaining appropriate and adequate certifications and accreditations from Strata Community Australia is highly recommended.

 

Our Body Corp is committed to helping owners self-manage their strata corporations with expert guidance and support. Get in touch with us today on 1300 848 343 for more information.

 

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