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Strata Manager or Property Manager?

Wednesday, 21st May 2014

Many lot owners are confuswed about the roles performed by a strata manager, a property manager and a building manager. Who does what? Which one do you call to resolve and issue or fix your particular problem? To sort out the confusion Stratalive gathered two of the best in the business, Olivera Ferguson, a director of Strata Plus, and Kym West, the senior property manager at Laing & Simmons, Milsons Point to explain..

Over-arching roles Strata Manager: Responsible to the Owners Corporation. Entrusted to ensure compliance with the strata scheme. Acts as a facilitator – a problem solver – for owners as a whole.

Property Manager: Responsible on to individual owners who have appointed them to manage their investment property.

Building Manager: Employed by the Owners Corporation to manage, maintain and repair common property and facilities.

Specific responsibilities

Strata Manager

  • Provide advice, direction and leadership to the Executive Committee and Owners Corporation
  • Maintain the strata roll and other books and records of the Owners Corporation
  • Deal with routine inward and outward corresponsdence
  • Maintain the trust funds including the preparation of budgets, collection of levies and management of unpaide levies
  • Provision of financial statements and the preparation of the trust accounts for a financial audit and tax and BAS returns
  • Meeting management including the preparation of agendas and minutes, and attendance of owners corporaiton meetings - ECMs and AGMs
  • Compliance management to the scheme's by-laws and also a variety of legislation including Fire & Lift Safety, Swimming Pools, WH&S, building insurance valuations etc.

Property Manager:

  • Tenant selection
  • Collect rents and pay bills (including levies) on behalf of the owner
  • Organise and oversee repairs within the strata apartment/suite
  • Project manage renovations of individual lots
  • Conduct regular inspections of the rental property, and ensure it is well maintained
  • Facilitate access for statutory inspections, such as fire compliance
  • Represent the best interests of the owner.

Building Manager:

Many of the larger strata schemes employ caretakers/building managers on site to:

  • Control the use of common property by tradespersons and other non-residents.
  • Maintain and repair common property as per contract or on instruction from the Owners Corporation.
  • Oversee the property’s security, fire protection and safety systems, air-conditioning, lighting, lifts and landscaping.

Blurring the roles

Because a Strata Manager works for all owners as a group, and a Property Manager works for individual owners, each role should be handled by different people/companies. If not, a conflict of interest could arise.

A Building Manager does not have the same delegated functions as a licensed Strata Manager nor can they enforce by-laws. They take their instructions from the Executive Committee and the Owners Corporation.

The Building Manager’s basic purpose is to reduce the amount of on-site time of EC members and the Strata Manager. 

“A professional Strata Manager has a duty of care to provide guidance on what constitutes proper and appropriate instructions from an Owners Corporation,” said Olivera Ferguson. “Social chaos and unclear time expectations result when advice from the Strata Manager is not sought.” 

Repairs. Who do I call?

Responsibility for repairs is straightforward – the Owners Corporation must repair common property; owners must repair anything within their lot. However – and this can be the tricky part – it is not always clear what is common property or what is the individual lot.

The basic rule is that everything inside the airspace of the apartment/suite, (including all internal walls, fixtures, carpet and paint on the walls) is the responsibility of the lot owner. So, call your Property Manager, if you have one.

Everything outside that airspace is common property and therefore the responsibility of the Owners Corporation. So, call your Strata Manager.

If there is an emergency related to common property – such as a problem with a lift, security, services, facilities – and time is of the essence, call your Building Manager first (if you have one) then your Strata Manager.

Why employ a Strata Manager? If you’re in a small strata complex then it is possible to self-manage, but do you have the time, knowledge and desire to take on the responsibilities?

Strata law is complicated, and you and your fellow owners could end up being sued for doing something contrary to the legislation.

A Strata Manager must continually update their knowledge just to remain registered. They need to stay abreast of changes in what is a rapidly expanding industry, which underlines how difficult the self-managed role is for the average apartment owner.

A self-manager can be held personally liable for a wrong decision, such as not having the correct insurance coverage for the property, or enforcing a preventative maintenance program. If a building is not properly maintained and someone is injured as a result, all owners can be held legally liable.

Why employing a Property Manager?

A good Property Manager views a client’s rental property in much the same way that a financial adviser views an investment – with a constant eye on the ‘bottom line’. The aim is to maximise the return and the long-term capital growth.

It’s human nature to want to save money, which is why some investors try to manage their own property. This is not always a wise decision.

People who should NOT consider managing their own investment property include:

  • Investors who do not want the worry of being a hands-on manager
  • Investors who live out of town and cannot easily choose tenants, collect the rent and manage repairs
  • People who own multiple investment properties and don't want to become a full-time landlord
  • Busy people
  • Non handymen
  • People who don't have a good grasp of landlord and tenant rights
  • People who might have difficulty enforcing the conditions of a lease, for example collecting rent from a tardy tenant.

“Most people who have their property professionally managed find that the service offers good value for money and is generally the key to a worry-free investment," said Ms West.

“First of all, property managers are skilled at finding qualified tenants. Then we keep each property in prime condition, which is vital to achieving maximum returns and the top dollar when it comes times to sell. We have reliable tradespeople who provide quality service at a fair price.

“We collect rents and pay bills on behalf of our owners, and know about the complexity of strata, so we represent the rights of our clients in matters relating to the Owners Corporation.”

By Barry Hyland

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