Question: Our strata manager charges a monthly fee for the WHS package without prior approval or notification. Are the implemented fees mandatory, and are the charges legal?
At our last AGM, we renewed the contract of our strata managing agent. In previous years, we asked for various charges to be removed from our strata fees, such as works orders, the WHS package, etc.
This had been approved previously, but at the time of signing the contract, the strata manager was away, and these were postponed for consideration after the meeting. Some time passed, and no correspondence was sent to us saying that our request was denied for this 3-year period.
I now note we have been charged new fees on top of our base fee. I would not have agreed to a 3-year agreement if I knew this.
I feel the pricing changes were not transparent. The renewal process exhibited poor behaviour by a strata management firm, especially because we were not informed and, therefore, were not allowed to reconsider the 3-year contract.
We’ve also been charged $23.17/month for a WHS package. The fee list states it is a compulsory fee. We have never had this package nor signed up for one.
We are a small block of 3 townhouses with no pool, no lifts, no corridors, no fire fighting equipment, just a front and back lawn, one garden at the front, and shrubs along the driveway.
I don’t see how there could be any safety issues with this community. I feel that any issues could be resolved with common sense and wouldn’t require a report. If we see a problem, then it will be addressed.
How can we be charged a fee for a package that currently does not exist? The strata management firm has not advised us that we need to do this report and didn’t give us a chance to approve it, but they are willing to charge the fee.
Is this WHS safety report required or compulsory under the Act. Are these actions legal?
Answer: There should be no charge for a service that is not provided, and the strata committee should formally seek justification from the strata manager.
To break this down, we will address the following points:
- The proposed agreement, including items the owners corporation had previously requested to be omitted.
- Whether the strata manager (SM) is within their right to charge a WHS fee and whether such a report is required.
- Your options moving forward.
1. Review of the agreement
Before a motion is tabled at a general meeting, there should be open dialogue between the strata managing agent and the strata committee regarding the terms of the proposed contract. The agreement would have also been included in the AGM notice, which owners must receive at least 14 days prior to the meeting, allowing time for review.
Additionally, it’s important to note that under the Strata Schemes Management Act 2015 (Section 50(6)(a) & (b)), the strata managing agent must provide written notice to the owners corporation regarding the expiry of the contract. This notice must be given:
- At least 3 months, but not more than 6 months, before the end of the term of appointment, and
- At least 1 month before the end of each extension of a term permitted by this section.
Amendments could have been made if this oversight had been identified before the meeting.
2. Legitimacy of the WHS fee & report requirement
The requirement for a Work Health and Safety (WHS) report depends on several factors, such as:
- Whether the owners corporation employs staff
- Whether all lots are residential, or some are used for short-term accommodation, which may impact safety obligations.
Regardless of whether a formal WHS report is required, the owners corporation has a duty of care to maintain a safe environment. However, if the fee is being charged without a corresponding service, the strata committee should request clarification from the strata managing agent.
Next steps
There should be no charge for a service that is not provided, and the strata committee should formally seek justification from the strata manager. If it is determined that the report is not required, the owners corporation should request an amendment to the agreement and reimbursement.
For future agreements, the strata committee should:
- Diarise a review six months before the contract expiry.
- Engage in early discussions with the strata manager about proposed terms.
- If seeking a new manager, request proposals based on a detailed scope of requirements for the scheme.
Ben Ruddell Tender Advisory E: ben@tenderadvisory.com.au P: 0423743714