Question: Can the strata company engage an insurance broker directly rather than through the strata manager?
Answer: The strata company is not obligated to use a broker appointed or preferred by the strata manager. It can choose to engage a broker directly.
In Western Australia, the strata company – not the strata manager – is ultimately the decision-maker when it comes to engaging service providers, including an insurance broker. This means the strata company is not obligated to use a broker appointed or preferred by the strata manager, and it can choose to engage a broker directly if it wishes.
A strata manager’s role is to act on behalf of the strata company, but they do not have the authority to dictate which contractors or advisers must be used.
That said, it’s important to review your strata management agreement carefully. Some agreements may include terms, fee structures, or commission arrangements that could affect (or potentially disincentivise) appointing a broker outside of the manager’s preferred provider.
I recommend:
- Reviewing your management contract for any relevant clauses relating to insurance or third-party appointments
- Checking whether there are any cost implications or changes to services if you appoint your own broker
- Speaking directly with your strata manager to understand how they would work with an external broker
Taking these steps will help ensure there are no unintended consequences and that the arrangement works smoothly for your strata company.
This post appears in Strata News #789.
Tyrone Shandiman Strata Insurance Solutions E: tshandiman@iaa.net.au P: 1300 554 165
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisenent Australia AFSL No 240549, ABN 15 003 886 687.
