This Q&A about strata management charges in WA in relation to bank fees has been answered by Shelley Fitzgerald, Allsorts Community Strata.
Question: Should we be paying strata management charges such as bank fees in relation to a trust account established by the strata manager on behalf of the strata company?
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Our signed SCA strata management agreement does not include a schedule of charges for services referred to elsewhere in the document as applicable. Is the strata manager entitled to charge for and paid for those services and at what rate?
Is a strata company obligated to pay charges that are not visible in strata records eg alleged bank fees and charges which do not appear on statements issued by a bank in relation to a trust account established by the strata manager on behalf of the strata company.
Answer: The agreement will normally provide for all of the fees and charges.
With regard to charges, my understanding is that the agreement will normally provide for all of the fees and charges however the Strata Company may not necessarily utilise all of the services/charges available to them.
If a Strata Manager operates a trust account in the name of the Strata Company then the Strata Company would be liable for all fees and charges on that account because it is a Strata Company account. It is worth noting that the Strata Company may also have a separate Reserve Fund account which may also incur fees/charges.
You indicate there are bank fees being charged for an account that is not a Strata Company account, but a Strata Management account.
Some Management Companies operate one trust account for all of their managements and would then on-bill for any fees and charges they incur to that trust account, over all of their managed Strata Companies.
If that is the case then you may be billed an apportioned charge for bank fees however this should be reflected in the Management Contract and clearly defined. These would normally be contained in the annual budget also.
This post appears in Strata News #318
Have a question about strata management charges for items such as bank fees? If you have something to add to the article, please leave a comment below.
Shelley Fitzgerald
Allsorts Community Strata
P: 0423 243 100
E: [email protected]
Note: this general information about strata council member problems is an opinion only and suitable specialists in these areas should be sort for clarification and assistance on all points.
Please note this advice was provided prior to the proclamation of the new strata title amendments and will be updated in due course.
Read next:
- WA: Relationship between Strata Manager and Strata Council
- WA: Strata Manager’s Duties under the Strata Titles Act Amendments
- WA: Q&A Where can I make strata manager complaints in WA?
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A pooled trust account for all strata companies under management is a reasonably priced option and management software is able to split the transaction charges based on the receipt types automatically. Interest earned on a Trust account does not accrue to either the individual Strata Company or the Strata Manager, but I believe is a contribution to a fund that provides compensation where necessary to those who may be the subject of crime within the industry.
Actual bank charges are generally a very small cost to the annual budget, and when considering the budget I’d recommend looking closely at what the strata company is being charged for photocopying or manual receipting by the Strata Manager as that can add substantially to cost.
Happy hunting!