Posted by Grant Beaumont on September 25, 2014

The Top Five Things to Look for in a New Strata Manager

Many owners find that they “inherit” their strata manager from previous owners or developers and so have not had much say in the firm appointed or the individuals nominated to handle the management of their property. For many property owners, their property, be it their home, rental property, office, warehouse of shop, is one of their single greatest investments and so entrusting its management to a company and person you can trust is very important.

There may come a time when owners band together and decide that it is time for a change. It is my observation that many owners corporations do not think to approach the strata company’s management and ask for a change of manager (if the fit is not just right), but rather they take the significant step to change the management firm. Strata management is a “people business” and there are times when a simple change of personnel is enough to reset the relationship. Having said, in some cases owners corporations simply get fed up and make the decision to change strata management companies, based on the view that the company’s turnover of staff, processes and/or culture is not good for them.

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My five top tips for choosing a replacement would be as follows:

1. Personnel – Who will be looking after your property?

Beyond the glossy brochures and promises of Business Development Managers, who is it that your executive committee and owners will deal with on a day to day basis? The working relationship between your manager and the owners is critical to a successful association.

So, ask yourself:
• Who will be the manager?
• How well do they communicate?
• How many strata schemes do they manage?
• Will the manager be the day to day contact or an assistant?
• How much experience does the manager have?
• How long have they been with the company? Does the company have a high degree of staff turnover?

2. Experience – Can they demonstrate experience handling the issues you face at your property?

Strata managers often have experience with a range of types of properties and localities. However, there are a number of specialist managers (for example specialising in large or luxury properties, commercial/industrial properties).

Can the strata manager demonstrate they have experience dealing with complex “harmony” issues, dysfunctional owners corporations, major repair works, budgeting and cost saving measures. My advice: ask them! What are the issues that have led you to change strata managers and are you confident the replacement will be adequately experienced to handle these?

3. Capability – Do they have the resources to look after your property?

A good question to ask your strata manager is: do they have the capability to handle your property? While invariably the answer will be yes, you need to ask yourself:
• Do they have a good support team that is qualified to handle accounts, tax, levy and arrears collection?
• Is the strata manager licensed? Do they do ongoing training? Are they members of industry bodies and keep up to date with changing laws, new technology, new ways of handling repairs and maintenance and the like?
• What happens if the strata manager is ill – is there a back up?
• Does the strata manager handle so many strata schemes that he/she would find it difficult to service you?
• Is the strata manager located so far away that they will not be able to respond quickly if their attendance is required on site?
• Do they have a team of qualified and trusted tradesman that they can call upon?

4. Approach – Does one size fit all?

I am often approached by owners corporations that are dissatisfied with their manager. The complaints generally fall into the categories “calls are not returned”, “repairs are not carried out”, “they are too expensive for what we get,” “they don’t do anything”. Business models vary between strata managers and there is a large section of the industry that works on a volume basis. This necessarily means that they adopt a “cookie cutter” approach to management. So, if you are not happy being treated as just another customer, owners should look at the business models of the business they are employing and steer clear of similar ones when switching managers.

Ask yourself how flexible will the strata manager be. Some of the questions to ask:
• Can we use tradesman of our choice?
• Can we conduct meetings at a time that suits us? At a location that suits us?
• Will the strata manager allow the executive committee to facilitate communication amongst owners?
• Does the strata manager adopt new technology to enhance the customer experience?
• Does the strata manager offer various ways to owners to pay levies?
• Does the strata manager stand behind their service – will they lock you into a long term contract or will they happily contract on a monthly basis?
• Does the strata manager offer different fee arrangements for the services that they provide?

If you decide that you don’t need flexibility, and you are happy with a standard (basically, a bookkeeping service), then there is a strata manager that can provide that kind of service.

5. Price – Am I really getting value for money?

Strata management is often considered a cost whereas it should be better viewed as an investment if you have a competent and engaged strata manager. Too many owners look simply at the “price” and fail to understand the “real cost”. Also, owners should ensure they peruse agency agreement thoroughly to ensure that all the “hidden” costs are understood. This is an area some of the “cheaper” agents catch up on their lower head line rates.

While there is almost always a strata manager that will do the job cheaper than the next, the stark reality is that you get what you pay for. Often I see owners complaining about the cost (because they aren’t getting value for money) and they aren’t getting the service, but they fall into the trap of thinking that they will get a higher level of service elsewhere for a lower cost. There is a disconnect here. If you want cheap, then you will get cheap – but expect no or little service. If you are prepared to pay a fair fee, you will find a strata manager that adds value, often saves you money in other areas, returns calls, maintains harmony amongst owners and ensures that all statutory obligations are met. The harsh reality is, if you pay peanuts, you don’t really have the right to complain about service – you’re getting what you’re paying for!

The quality of service and costs of strata management varies widely. Changing strata manager is not a decision to be taken lightly. The main thing is to ensure that you don’t simply replace one underperforming manager with another.

Good luck!

About the Author, Grant Beaumont

Grant Beaumont

As Director of Beaumont Strata, Grant is passionate about the management of Commercial & Industrial Property. With an enthusiastic attitude toward innovation, and adoption of modern practices, the businesses have significantly developed in terms of the internal processes, creating business efficiencies and enhancing the customer experience for clients and customers. In addition, he handles much of the administration side of the businesses, comprising legal, accounting, human resources and office matters.

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5 Comments

  1. You make some really good points when talking about experience. It would be really smart to ask the strata manager about their experience with specific situations like major repair work and harmony issues because then you could get a feel for how they handle things. Then you’d be able to judge a little better on whether or not they’re a good fit for you and your property.

    Georgia B -
  2. I liked what you said about how a property is one of your single greatest investments so entrusting it’s management to a company or person you can trust is very important. I imagine that building this sort of trust wouldn’t be easy, especially if you inherited your strata manager from a previous owner. It would make sense to me to start by getting referrals from people you already trust so you can start off the relationship on the right foot.

    Luke Smith -

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