About 40% of us, city dwellers, live in apartments. That means we have a form of shared ownership of the apartment building we live in. It’s called Strata Title, and apartment owners have a share of the Owners Corporation (OC), which owns the building. We talk more about this here.
Usually the OC appoints someone to manage their affairs. In most cases, it’s a Strata Management company that assigns a dedicated Strata Manager to look after the building. Alternatively, a member of the OC takes on the role and manages the building on behalf of all owners. We talk about pros and cons of both arrangements in this article.
Strata Managers perform an important role as OCs have numerous legislative and administrative obligations to meet. Strata Data provides a good snapshot of Strata Managers roles and responsibilities. And one of the important jobs of a Strata Manager is to keep records of what happens in the building. This ranges from insurance, finances, meetings, correspondence, legal matters and day to day maintenance.
Unfortunately, many Strata Managers struggle to do a good job at keeping records.
We know this because we inspect them every day. And there are three main factors here:
1. Absence of a Standard
Part of the problem is that there is no standard system for keeping records. That means different Strata Management businesses have their own record keeping system. This can make it hard to find the right information when searching through the records for a building.
This also means that different Strata Management business have their own way of minuting meetings. Sometimes we see minutes that simply refer to “remedial works” for example, without identifying any specific information about these works. Again, this makes it difficult to determine what’s going on in the building, including the issues discussed by members of the OC.
2. Management Fees
While I’m no expert on Strata Management, I think that pressures on strata management fees are part of the reason for poor performance. OCs often look for the lowest management fee, thinking they are saving money. But actually, they might be creating problems for themselves. Lower fees often mean each Strata Manager needs to manage more buildings in their portfolio to make their business viable. This can mean they tend to be overworked and have limited time available to look after records.
3. Strata Managers get Sacked
A direct outcome of the previous point is a situation like this: OCs are not happy with poor service they are receiving and start looking for a new low-fee Strata Manager. And once they find one, the current one gets sacked. When they get sacked, they need to transfer the records for the building to the new manager. This rarely goes well. Records go missing, they are mis-filed (because there’s no standard filing process) or aren’t transferred at all.
So, this can mean records get worse after a change of a Strata Manager. Now there are more gaps in the records.
The bottom line is that it can be a lottery whether your apartment building has good records about what’s happening (or happened) in your building.
And the real losers here are the apartment owners themselves, but I think many of them aren’t even aware of this issue. By appointing a Strata Manager, they have outsourced record keeping for their building and might be unaware of the state of the records of their OC.
Really, they’ve given up control of their own records.
While OCs still have access to some records via the Strata Manager or the manager’s record keeping software, they don’t have a backed-up copy that belongs to the OC.
And as it stands now, owners or potential owners, often have trouble accessing information because of poor record keeping, and because Strata Managers are often unhelpful.
Surely there has got to be a better way.
All OCs should ask their strata manager for a full download (or copy if records are in paper form) of their records and then a download of new records every month, so they are kept up-to-date. This should be fairly simple with today’s technology, but I’ll bet strata managers wouldn’t see it that way.
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