Is there a website or something that shows the typical costs one
can expect when managing a block of units?
Ve-ry interesting. For the next AGM, the strata managing company has put
in a motion to sign a new agreement with them. (FYI, the agreement is
from ISTM [Institute of Strata Title Management] at
www.istm.org.au/agree.htm . Our strata manager is one of the many
members of this institute. )
It's interesting because we get to vote on the strata manager's new
fees and this is the first AGM, since signing the original agreement many
years ago, that there's been such a vote. The current agreement says
that the fees and charges would be reviewed on each Review Date
(which is once every 12 months from the agreement date), and that if
the 'parties' can't agree to the fees then it would go up by the
inflation rate (CPI) each year).
I'm not sure who these 'parties' are - each year the standard
strata management fee has jumped up by large amounts.
At each AGM, there is a motion to set the Administrative Fund and
Sinking Fund levies for the next year. That's all the motion says,
but in the accompanying account statements
there is always a breakdown of the proposed budget which includes
the Standard Management Fee for the next year and the expected level
of Management Disimbursements.
Is that sufficient? It sounds a bit shaky to me. I would've thought it
was necessary to have an explicit motion each year to renew the
strata manager's agreement and review its fees. Otherwise people
assume that they aren't able to vote on these.
The original agreement date was on a 1st July. So the Review Date would
be on each anniversary that date, whereas the AGM takes place in
April. I'm not sure if that makes a difference.
I am one of the 2 owners on the Executive Committee, so I presume that
any such decision would have to go through me at least? The other owner
on the Executive Committee is buddies with the strata manager and so
always votes everything in their favour. All of the other unit owners
don't ever come to any AGM and so don't seem interested in anything.
It's not just that - nothing goes through me at all. E.g. if some unit
owner provides a quote for repairs to the common property, I don't
get asked for approval. It seems to only go to the other person on
the Executive Committee.
As the other person on the Executive Committee, shouldn't I have an
equal say? I can't see anything in my contract except that by default
we have delegated the "Agreed Services" (including organization of
repairs) to the Strata Manager, but I don't know why only one of the
people on the Executive Committee is doing the approvals.
----------------------
There is also a motion in the upcoming AGM to elect the Office Bearers
of the Executive Committee. Does that mean: the chairman, the secretary,
and the treasurer? I'm not sure whether these functions are currently
done by the Strata Manager or the other Executive Committee member.
Does having one of those titles give anyone more power to approve
repairs, strata manager fees, etc? I wouldn't have thought so - all
that I've read about those titles (e.g. in the Strata Living booklet
at http://www.fairtrading.nsw.gov.au/realestaterenting/strata.html
which explains strata issues very well)
doesn't mention anything about that.
From what I've read about these office positions, I don't think I'd
want to do them. All I want is an equal say in where finances go -
is that possible?
If you look at the agreement URL at the top of my post, which is the new
agreement that the strata manager wants us to sign, Item 8 requires
the nomination of a Representative and Substitute Representative.
In Section 7 of the agreement it states that both of these must be
members of the Executive Committee. Basically, the strata manager
can act upon instructions from either of these two, though other owners
can still override these instructions.
I'm not sure what the implications of these positions are, whether
they would give me more or less power to have a say currently. I'm
trying to find if it says somewhere that the Sub Rep has less say than
the Rep.
From www.istm.org.au/new_cov/aug03.pdf , the Rep/Sub Rep seems to be a
new concept, and it seems to be saying that one person is sufficient
to make certain decisions? That doesn't sound encouraging.
"New concept introduced where owners nominate a
representative and substitute representative. In the absence
of formal instructions from the owners or the executive
committee there is a contact person who can authorise
work and authorise the agent to perform additional services."
---------------------
My flat is in a block of 10 units. The yard is rather small - not
much mowing to do, but there is a garden and weeds to tend.
Can someone advise if these costs seem right or wrong? Is there a website
perhaps which shows the market rates? My flat is in Sydney city.
**
1) The payment to the strata manager consists of a Standard fee each year
for Agreed Services, as well as charges for Additional Services and
lots of other charges. There are a ton of different categories for
all these extra charges - see the agreement URL at the top of my post.
Since 1999 when the current agreement was signed, the Standard fee
has gone up from $900 to $1400, and this year they're proposing it
to go to over $1700!
The total disbursements paid to the strata manager each year has also
gone up each year, but whereas before it was never above $150, this
past year it has jumped to $450, and in the proposed budget for
next year they have kept it at that level! I'll have to ask why.
The schedule of extra fees that make up these disbursements were last
quoted in the 1999 agreement that we signed. In this new proposed
agreement they seem to be insanely increased. There are way too many
categories to list here, but a small sample price quotes from
1999 and now are:
- Hourly rate for director: $70->$150
- Hourly rate for strata managers: $54->$122
- Attend additional meetings: $90/meeting -> $150/meeting
- Accountant for tax return $40+CPI -> $80 per lodgement
And many others.
Even more worrying are some new categories that aren't in the
current agreement. They come under "Statutory compliance and
general administration fees". The worrying part is that I can't
tell which of these are unavoidable, i.e. WILL definitely get charged
during the year.
All categories are in the agreement URL at the top of my post, but
for example:
- Installment Activity or BAS statement preparation and lodgement.
$105 per quarterly return. This sounds mandatory?? If that's the
case, it will blow the current amount of Disbursements right out
of the water!
Other such examples:
- Payroll attendance fee: $15/month per employee
- Archive records storage fee: $3.50/month
- Complete/sign application for fire services legislation: $100/applic
- Creditor approval system by executive committee: $10/month
**
2) And here some of the third party charges that were incurred during the year
for this block f 10 units. Let me know if any of them seem too high.
- Insurance Premiums $2500. These of course always jump up each year.
- Lawns & gardens. $1000. Had jumped to $2000 in one of the previous years,
before I demanded that it be decreased. Went magically to $800 the next year.
- Cleaning $1200. Seems a lot, though year-on-year it increases only very slowly.
- Water $1900
- Plumbing (repairs I think) $600
- Electricity $350
- Garbage bins/bags (?) $350
