Strata Management: Everything You Need To Know
What does a Strata Manager do?
A Strata Managers role is to manage a property group – i.e Strata titled property. These consist of multiple dwellings (often apartments or townhouses) that have a collective responsibility to maintain common property areas and fund the same. The Strata Managers role is to dutifully support the property Owners by guiding them and undertaking some of the required tasks that the group needs to be fulfilled. Such tasks include recording minutes and distributing them, arranging meetings of the group, ensuring compliance with the Strata Titles Act 1988 (and amendments), arranging quotes and maintenance, arranging tax requirements, keeping good financial records, raising funds to meet the group’s costs and more.
A common misunderstanding is that a Strata Manager is a property manager or vice versa. A Property Manager however is set up by a property owner to maintain one property, i.e a unit that they own in the whole block. Their role is more focussed on the interior of the unit, the finding of a Tenant and the management of said Tenant and rents.
What is the difference between a Strata Manager and a Property Manager?
A Strata Manager is engaged by a Strata Property consisting of multiple unit Owners working for the whole complex, dealing with the requirements of the collective and their common property needs. Whereas, inside a Strata complex you may have units Owner by investment Owners, and these individual owners would hire a Property Manager to look after their personal leasing needs. * refer: What does a Strata Manager do?
How do I contact Strata management?
Each Strata complex may choose to manage their affairs directly, or by appointing a Strata Manager. As such there are several different management companies here in SA. Simply contact your Managers on their contact details which would have been provided. Stratarama contact information appears on our website.
If you are unsure who your Managers are, there is no database from which you can refer, unfortunately, and groups can change Managers regularly at a duly convened meeting of the Members. If you are an Owner and are unaware, try referring to the most recent set of Minutes of the group, alternatively reaching out to the groups presiding officer or Committee. If still lost, ask the other Residents on-site who may also be aware. A Strata Manager will communicate with Members as needed and so you should be able to access some previous information with their contact details on it.
The Agent whom you purchased the property from, should also have the details of whom the Manager is. Failing this, some Members in South Australia are members of the SCA and whilst the SCA will not know who your Manager is, their Strata Directory may provide you with some contact details for various Companies for you to try if all else fails.
What makes a Good Strata Manager?
Each group may have their own take on what makes a good Strata Manager. Every Manager should be providing a similar service that ensures the group’s compliance, everyday business, financial management and maintenance. We would suggest that a good Strata Manager is someone focussed on the group’s needs, able to communicate effectively and efficiently with unit Owners and Committees. A transparent Manager whose Members can rely upon has sound knowledge and is approachable to the Group Members.
We recommend that anyone seeking a new Strata Manager reaches out and directly speaks to the person who would be managing their Strata, not their Assistant or business Development person, because the Strata Manager is the person who will be dealing with your group and needs to best understand your group’s needs and dynamics, to ensure that not just the right Company, but the right person is engaged to assist your group. Like every job or career, no one starts out perfect, so seek out a Manager who is experienced, especially if the group has some tensions or difficulties. It is also advisable to consider Managers who are members of the SCA (Strata Community Association) and ideally accredited.
Can you do your own Strata management?
There is no requirement for a Strata Corporation to engage a Strata Manager. Many complexes do in fact manage their own body corporate in order to reduce the costs of the group. It is important though that if a group elects to manage their own Strata, that they do in fact set up the group appropriately so that the complex is in fact being managed by the Members. The Members must ensure that they have access to the information needed to ensure the group is compliant with current legislation, meeting their financial obligations, maintaining the group’s buildings and common property and more.
Members must ensure that someone or a Committee of Owners has enough time and resources to meet the group’s needs. In some instances, the smaller blocks of units may seem to be easier to manage by a group of Owners, particularly if some are residing on-site, however many elements come in to play such as building age and needs as well as the demographic of Owners and whether members will require a third party to be a mediator between them.
What do self-managed Strata mean?
The term ”Self-managed” simply refers to the group being managed by its own Owners/ Members. The group has elected (thus far) not to engage a professional Strata Manager to assist them in their needs and requirements and instead are running the Corporation themselves. The responsible parties handling the day to day management of the group may be a Committee of unit owners or the appointed Presiding Officer, Secretary and Treasurer. If your group is considering becoming self-managed, please refer to our FAQ on: Can you do your own Strata management?
Who can be a Strata Manager?
Different States have different requirements on who and how you can become a Strata Manager. In NSW for example a Strata Manager must be licensed. In South Australia, there are no licensing requirements for Strata Managers. The SCA *Strata Community Association would be considered the peak governing body for Strata Managers around Australia Nationally. The SCA provides a framework for accreditation of Managers here in SA and Nationally. Not all Strata Managers in SA are members of the SCA and not all SCA Member Managers in Adelaide are in fact accredited. Stratarama maintains membership with the SCA and Tony Johnson is a level three accredited Manager (the highest accreditation level of any Manager in SA. Members submit to a code of conduct and regular training.
How do I terminate a Strata Manager?
Strata Management Contracts are generally agreed to at a properly convened meeting of the Members and run for a twelve-month term. At the end of the twelve months (usually from Annual General Meeting to AGM), the group may elect not to renew that contract and become self-managed or engage a new Strata Manager. If a Corporation believes that a Strata Manager has breached their duties under the Agreement, then they may seek legal advice on how whether the agreement can be terminated. If details of an early termination can not be agreed on, then the Corporation may seek dispute resolution as set out in the Strata Titles Act 1988.
What does Strata mean?
The word Strata is the plural of “stratum”. This generally means a layer within a structure or layers within something. The word Strata in the context of the property was initially therefore used to refer to apartments which were on different levels, however as a Strata Title, it can more broadly cover other property types provided the property title is lodged as a Strata Title. This form of property Title was first introduced in Australia in 1961. Strata Title properties are comprised of common property (shared) and individual units or lots (which may include a subsidiary specific for that unit such as garage or storeroom).
Do townhouses pay strata?
A Townhouse could be one of a number of different property titles here in South Australia. This may depend in part when the property was built as the Community Title Act came into effect in 1996. If the property Title is: Strata Title, then the group would need to pay Strata levies or contributions towards the common expenses of the group such as insurance, administration, maintenance, utilities and more. If the title of the group is Community Title, there will still be expenses associated with some of the above and so a levy would still be applicable. In most cases, this will also include a Sinking fund levy as well for future major works. However, in some instances, depending on the way in which the site has been set up, it is possible that the townhouses were created as Torrens titled properties which would not require any strata levies as you would be personally responsible for the whole property you have purchased with no areas of common property requiring costs to be met.
Why Strata Titles are important?
Strata and Community Titled properties are important property types because they facilitate ownership of some form of the property whilst being part of a community that maintains a common collective area/ part of the property. This is important because not all people looking to get into the property market could afford to purchase a house in the area of their choosing outright, or perhaps afford the upkeep on the property alone. This is a shared responsibility which can make it easier for some to purchase in to, or perhaps a smaller pocket of property in which to maintain and fund. This could assist first home buyers to get into the property market, people looking to downsize, investors or those looking to be part of a community. Strata Titled properties won’t be what every property purchaser is looking for but will be the perfect fit for others. It is highly advisable that anyone looking to purchase a unit within a Strata Corporation understands what they are purchasing, what their ongoing rights and responsibilities are, along with the specifics of that property/ complex. Consider what is a Strata Corporation, and then review the details specific to that site such as the Articles relevant to the complex.
How are Strata fees calculated?
Strata fees are determined by the members of the Strata Corporation at a properly convened meeting. These Annual General meetings will discuss the budgeting needs of the group, for the Corporation to meet its financial responsibilities, covering items such as common utilities, strata insurance, administration costs, maintenance costs and project works. A properly formulated budget will breakdown what the costs of the group are anticipated to be, and then the group will vote on how to best implement the raising of the funds required and whether there are other costs that the group needs to work towards raising. Refer to our Article on Stata fees for more information.
Why are Strata fees so high?
Every unit group/ Strata Corporation has a different set of financial burdens for which they need to be responsible for meeting. Some Corporations strata fees/ levies may appear high because they have more grounds maintenance, or more utilities (common lighting), perhaps they are raising funds for a specific maintenance project or have a different set of amenities that need to be maintained such as a pool, gym, elevator or more. Each individual complex is definitely set up differently. Whilst some Corporations may choose to raise a one-off maintenance levy to fund project works such as gutter replacement, fencing, etc, others would prefer to raise those funds slowly each quarter in a sinking fund to avoid a large levy. It is best that you review the budget for the complex and any minutes that highlight where the Corporations funds are being spent. Our article on strata fees elaborates a bit further on this matter.
What happens if you don’t pay Strata?
Each Owner is liable individually for the costs of the Strata as raised by levy. Owners who have not paid their levies in full do not have voting powers at their meetings on any matter aside from those requiring a unanimous resolution/decision. These decisions could in fact be further financial decisions. Where levies/ contributions are not paid by a unit owner they are recoverable by the Strata Corporation as debt according to Section 27 (5) of the Strata Titles Act 1988. As a debt, the Corporation may charge interest on the arrears and other fees where documented by the Corporation. These Strata Contributions are required for the group to function and meet its financial obligations, it is therefore important that each member pays their contribution. Failure to do so, could see the matter escalate to the Magistrates Court.
How can I reduce Strata fees?
Unfortunately, as with most costs, they tend to rise rather than fall as the years go by. Strata levies often increase because maintenance needs increase, or because the common costs that the Corporation are funding are increasing. For example, if the costs being invoiced to the group for common lighting, water, grounds maintenance, etc increase then this has a follow-on effect into the groups budget, the budget now needs to be increased to cover the individual rising costs.
Strata Corporations can look where to save on costs so that the contribution levels remain the same or decrease. Again, by reviewing the groups budget, the members can look to where some savings may be had, it could mean changing the regularity of the gardener’s visits, changing the gardener, changing service providers such as a utility provider. Groups may look to change the way water is billed, or to reduce water consumption, change to lower power consumption globes, etc. The same ways anyone would like to reduce costs, by evaluating their own individual needs and expenses. Not always will there be a way to reduce the costs of the group though, as there are obligations the group must meet?
Do you pay Strata fees on a Duplex?
A duplex is generally a residential building which contains two homes. In most instances, this may be a common wall between the two buildings and/or a shared roof. Just as with other forms of smaller property types such as townhouses, the duplex may consist of say two separate Torrens Title properties or it may be on a Strata Titled plan, consisting of two Lots/ units. Assuming that the Title is a Strata, then just in other Strata titled properties, there will be communal costs that the group needs to fund by raising contributions (levies or fees) such as insurance, exterior maintenance on the building and roof, etc. Before purchasing, research the property in question to determine whether it is a Strata Title or Torrens Title property and if a Strata Corporation, consider the ongoing costs being raised.
Do Strata levies include Council Rates?
Council rates are generally not part of a Strata fee/ levy. Strata levies are payable by Owners of the Strata Corporation who have assessed the needs communally. Council Rates, however, are payable by every property owner, based on the Council valuation of their individual property (so each unit may be assessed differently for Council rate purposes). These rates are paid directly by owners to the Council. The same can be said for water rates (as opposed to water consumption/ usage). In some instances, a Strata Corporation may pay a Council rate on land leased by the Corporation. For example, a Commercial Strata Corporation may choose to rent some carpark facilities at a property which is not on the Strata title (a completely separate property), the Owner of that carpark land, may pass on the costs of the council rates that they pay, to the Strata as part of any lease agreement. In terms of standard Council rates though, as above, these are paid by the Property owner direct to council based on their individual valuation.
How do Strata Managers make money?
Strata Corporations may engage the services of a Strata Management Company to assist them with the running of the Strata. The Strata Management Company will look to employ Strata Managers who are best suited to work with a portfolio of Strata Corporations/ Committees and Members. When a Strata Corporation engages a management company, the costs for management are detailed and included with-in the Strata Corporations budget, as one of the line items of costs that the Corporation must meet. Out of the Management fees paid to the Strata management Company, they must, in turn, pay for their own costs, overheads, software, rent, insurances and of course the wages of those Strata Managers, Assistants and office staff working on the portfolios.
Why is it called Strata?
Strata is the plural for “stratum”. As a property title word, Strata is a good generalisation to describe apartments (but is also used in other property types like townhouses, homettes, offices and more). This is because the term Strata is basically used to describe layers within something. Strata title legislation or similar forms of property ownership that consist of common property and individual lots are seen all around the world and many have some ties back to the Australian Strata Title legislation.
What is a Strata Assistant?
Many Industries employ an Assistant/s. In the context of a Strata organisation, a Strata Assistant is usually a person employed by the Company to assist the Strata Manager. The Strata Company and or their Manager (representative) has been engaged by the Strata Corporation Members to assist and guide their complex. A Strata Assistants role will be to assist that Manager in undertaking the group’s required tasks. They may undertake day to day administrative tasks and/ or be in training to manage their own portfolio of Clients. Strata Assistants could be utilised in a variety of ways depending on how the Strata management company is set up and the needs of the individual Strata Corporation.
If you have any questions about strata management in Adelaide contact us at:
Stratarama
35 Beach Rd, Christies Beach SA 5165
08 8276 0426
Want to read more resources about Strata & Strata Management? Check out our other guides:
The Coronavirus – COVID-19 and Its Effects on Strata Corporations in South Australia and Australia.
How are Strata Fees (levies) calculated?
Everything You Need to Know About Strata Fees in South Australia
