What should you ask and what warning signs should you look out for when choosing a new strata manager?
What do we want from the manager?
Maybe the most critical question but often skipped over. If you want to change managers, start by defining the reasons why and what you expect from your next manager. Then ask managing agents if and how they can deliver on those expectations. Be realistic. If you say to a new agency that you are a low fuss scheme and want to keep costs down that’s fine, but if you then spend the next twelve months mailing the manager every day, it’s not going to work out. If your plan needs help no problem but make sure the next company can manage that.
What are the costs?
Focusing on the annual fee per lot and costs for disbursements only tells part of the story. Most strata contracts are structured to have a set of agreed services that include general secretarial services in the annual fees, and a range of extra costs applied on a user pays basis. Some companies offer cheap annual fees, but they have to make money somehow, and that usually means deriving revenue from extra services. Check the contract carefully and make sure you understand what is included and what’s extra. Think about what your plan actually asks the manager to do and check this against the agreed services. If you require work outside of those services, you can reasonably expect to see additional costs.
How do we access our records?
You should be able to access general records to your plan such as details about the financials, minutes, insurance and by-laws quickly, easily and without cost. Online portals help provide transparency and if they can’t hold all documentation, check how long it will take a manager to respond to information requests and if there are any fees for giving access to your records.
What’s the term of the agreement?
Most agreements are one, two or three years. Longer terms may be encouraged by offering lower fees or incentives such as a cap on annual increases. Shorter terms give you the flexibility to renegotiate or move on at the end of the deal. Get a length you feel comfortable with.
Who’s the manager?
Your next company may be able to nominate the manager for your site in advance – ask and see. Why not have a chat with them and see if you think they will suit your building? Do they have the knowledge and experience you need? A good connection with the manager makes a big difference so make sure you get the right fit.
Does it matter if the company is big or small?
Larger strata firms tend to be more structured and process-driven while the smaller usually offer more tailored flexible services. In and of itself size probably doesn’t matter much but experience can and the capacity of the individual manager can.
What red flags should we look out for?
- Online reviews: They don’t tell the whole picture, but online reviews give an idea of what to expect. In isolation, a couple of bad reviews might not be significant, but if there are a lot of complaints about the same thing that’s a warning sign.
- Staff turnover: Even if you find a good manager, it’s no good if they are gone in six months. High turnover can be a sign of an unhappy company. Check how long staff stick around.
- Overworked managers: How many buildings does a manager have? How many lots? How many people assist them? Your manager might be great, but they are not much use to you if they are burned out. Unfortunately, many are.
- Conflicts of interest: many strata companies diversify into areas such as working with developers or property and building management. Synergy can be a good thing, but it’s not always easy to keep a balance. Make sure your strata company is focused on your needs as a strata plan.
William Marquand Tower Body Corporate E: willmarquand@towerbodycorporate.com.au P: 07 5609 4924