positronico
08-05-2005, 07:57 PM
Is anyone familiar with how managing agents, particularly strata managers,
charge fees and how owners could try to negotiate some of them?
If so, could you please have a read of this as I'd like to have
control in understanding how it works.
I have a current agreement with a strata manager.
The agreement was provided by the Institute of Strata Title Management
(ISTM) which has a lot of strata managers as its members, and
was signed by us in 2000.
It included a schedule of fees at the back: the
disbursements that we have to pay them (e.g. telephone 50c per call, etc),
and costs for additional services not included in the standard management
fee (e.g. hourly rate for strata managers $50/hour) .
As you may be aware, the fees to a strata manager normally include
a) A standard yearly management fee
b) The above extra fees and disbursements.
(FYI, a NEW agreement has been introduced by the ISTM at around late 2003
I believe, and it can be seen at http://www.istm.org.au/agree.htm,
specifically http://www.istm.org.au/info/A_Agreement.pdf ).
For a), I really want to know: HOW can one vote on whether or not to accept
the amount by which the strata manager's standard fee goes up each year?
The agreement we signed in 2000 is a standard one by the
Institute of Strata Title Management (ISTM) . I don't think it would be
on the web now, but the relevant clauses can be found in the new agreement
in the above URL in clauses 4.1 and 4.2 . Basically it states that
all fees will be "reviewed on each Review Date to an amount agreed by
the parties", and if the 'parties' don't agree, then they will go up
by the inflation rate.
I'm assuming the word 'parties' has got to mean the majority of the
owners corporation, or perhaps the Executive Commitee?
In each Annual General Meeting a proposed budget is outlined, which
always includes the proposed new standard management fee for the next
year. But The only actual motion that is related to this is the motion to
decide how much each owner will be levied during the next year.
Even if the defeat the motion to increase the levies for the next year,
(i.e. we vote to keep the levies the same) we still find that the
strata managers charge the new increased management fee!
By reading the clauses 4.1 and 4.2, can anyone advise HOW the owners
can actually vote on whether or not to increase the management fee?
I would've thought that by defeating the levy increases we also defeat
any increase in the management fees, but if that's not the case,
do we need to specifically make a motion to vote just on the
management fees?
Clauses 4.1 and 4.2 state that their prices don't go up (except by inflation)
unless we agree on it, but it sounds more like their prices will go up
unless we specifically disagree for them to go up?? (There's a difference).
--
Now as for b):
The fees in b) have gone up year-by-year of course, and new fee
categories have been introduced that weren't there before. There was
a complete overhaul last year of the categories and fees last year as well.
As far as I know, no one has received any notification of any fee
increases since 2000, not even the executive committee members.
Some owners receive quarterly accounting reports so they may happen to
notice disbursements going up, but because they weren't itemized
into separate categories on these reports up until recently, they
wouldn't have known about any increases.
It's only at this year's AGM, when we were being asked to sign a new
management agreement, that we received an updated schedule of fees.
Are the strata managers obliged to provide all unit owners, or at least
the executive committee, notification of such price increases?
In my current agreement, the relevant clauses are:
"4.4) If a Disbursement, paid by the Agent in performing a function under this
Agreement, increases after the date of this Agreement, but before the
Review Data for fees and charges, the amount payable by hte Owners Corporation
to the Agent for the performance of the function will increase by the
proportion the Disbursement has increased.
"
and
"Schedule B->Extra-Ordinary General Meetings->point 2.
Any other services that can be provided by the managing agents but not
included in schedules will be subject to additional charges in accordance
with schedule of additional charges and diusbursements as provided from
time to time by the managing agents.
"
What do you think? Does that give the strata manager the right to
increase any of these non-standard fees as desired without telling anyone?
We're being asked to sign a new agreement now, and the PDF file can
be found in the URL that I've posted above. The only relevant clauses
that I can see there are 3.5, 4.1, and 4.2 . It sounds like from now on,
the strata manager wouldn't be able to increase their non-standard fees
(except by the inflation rate) unless agreed to by the owners corporation -
does that sound right?
I hope I'm right because this new agreement is touted by the ISTM as
providing more protection for both strata managers and consumers.
By comparing it to the old agreement that I have, it seems to give
more 'protection' to the strata managers all right but less to consumers
in some areas.
In particular you can see that there are so many fee categories at the
back of the new agreement, that it just give strata managers more
encouragement to just make up fees for everything under the sun, IMO.
charge fees and how owners could try to negotiate some of them?
If so, could you please have a read of this as I'd like to have
control in understanding how it works.
I have a current agreement with a strata manager.
The agreement was provided by the Institute of Strata Title Management
(ISTM) which has a lot of strata managers as its members, and
was signed by us in 2000.
It included a schedule of fees at the back: the
disbursements that we have to pay them (e.g. telephone 50c per call, etc),
and costs for additional services not included in the standard management
fee (e.g. hourly rate for strata managers $50/hour) .
As you may be aware, the fees to a strata manager normally include
a) A standard yearly management fee
b) The above extra fees and disbursements.
(FYI, a NEW agreement has been introduced by the ISTM at around late 2003
I believe, and it can be seen at http://www.istm.org.au/agree.htm,
specifically http://www.istm.org.au/info/A_Agreement.pdf ).
For a), I really want to know: HOW can one vote on whether or not to accept
the amount by which the strata manager's standard fee goes up each year?
The agreement we signed in 2000 is a standard one by the
Institute of Strata Title Management (ISTM) . I don't think it would be
on the web now, but the relevant clauses can be found in the new agreement
in the above URL in clauses 4.1 and 4.2 . Basically it states that
all fees will be "reviewed on each Review Date to an amount agreed by
the parties", and if the 'parties' don't agree, then they will go up
by the inflation rate.
I'm assuming the word 'parties' has got to mean the majority of the
owners corporation, or perhaps the Executive Commitee?
In each Annual General Meeting a proposed budget is outlined, which
always includes the proposed new standard management fee for the next
year. But The only actual motion that is related to this is the motion to
decide how much each owner will be levied during the next year.
Even if the defeat the motion to increase the levies for the next year,
(i.e. we vote to keep the levies the same) we still find that the
strata managers charge the new increased management fee!
By reading the clauses 4.1 and 4.2, can anyone advise HOW the owners
can actually vote on whether or not to increase the management fee?
I would've thought that by defeating the levy increases we also defeat
any increase in the management fees, but if that's not the case,
do we need to specifically make a motion to vote just on the
management fees?
Clauses 4.1 and 4.2 state that their prices don't go up (except by inflation)
unless we agree on it, but it sounds more like their prices will go up
unless we specifically disagree for them to go up?? (There's a difference).
--
Now as for b):
The fees in b) have gone up year-by-year of course, and new fee
categories have been introduced that weren't there before. There was
a complete overhaul last year of the categories and fees last year as well.
As far as I know, no one has received any notification of any fee
increases since 2000, not even the executive committee members.
Some owners receive quarterly accounting reports so they may happen to
notice disbursements going up, but because they weren't itemized
into separate categories on these reports up until recently, they
wouldn't have known about any increases.
It's only at this year's AGM, when we were being asked to sign a new
management agreement, that we received an updated schedule of fees.
Are the strata managers obliged to provide all unit owners, or at least
the executive committee, notification of such price increases?
In my current agreement, the relevant clauses are:
"4.4) If a Disbursement, paid by the Agent in performing a function under this
Agreement, increases after the date of this Agreement, but before the
Review Data for fees and charges, the amount payable by hte Owners Corporation
to the Agent for the performance of the function will increase by the
proportion the Disbursement has increased.
"
and
"Schedule B->Extra-Ordinary General Meetings->point 2.
Any other services that can be provided by the managing agents but not
included in schedules will be subject to additional charges in accordance
with schedule of additional charges and diusbursements as provided from
time to time by the managing agents.
"
What do you think? Does that give the strata manager the right to
increase any of these non-standard fees as desired without telling anyone?
We're being asked to sign a new agreement now, and the PDF file can
be found in the URL that I've posted above. The only relevant clauses
that I can see there are 3.5, 4.1, and 4.2 . It sounds like from now on,
the strata manager wouldn't be able to increase their non-standard fees
(except by the inflation rate) unless agreed to by the owners corporation -
does that sound right?
I hope I'm right because this new agreement is touted by the ISTM as
providing more protection for both strata managers and consumers.
By comparing it to the old agreement that I have, it seems to give
more 'protection' to the strata managers all right but less to consumers
in some areas.
In particular you can see that there are so many fee categories at the
back of the new agreement, that it just give strata managers more
encouragement to just make up fees for everything under the sun, IMO.