Staying compliant
Staying compliant when self-managing strata
If you’ve decided to self-manage your strata scheme, have you considered how to access advice and support to keep you and your neighbours fully compliant?
Although there’s no legal requirement to engage a strata manager, it’s appropriate for most larger schemes to do so given a strata manager’s experience handling the many legislative and financial issues, as well as organising the property maintenance that sharing ownership in a common property creates.
However, if your scheme only has a few lots, and one or more of the owners is willing to volunteer their time and experience to take on the legal responsibility, then self-managed strata (or DIY strata) could work for you.
What you need to know about self-managed strata
While this isn’t an exhaustive list, these are the main responsibilities you take on with self-managed strata.
- Record keeping - collecting, organising and managing strata records, and making them available when requested.
- Accounting - producing and processing financial statements and budgets.
- Payments - managing invoice payments, issuing and collecting levies and chasing any overdue payments.
- Insurance - learn all about insurance coverage for common property, joint and several liability risks as common owners and legislative obligations, fire safety and Workplace Health & Safety requirements
- Meetings - organising and running all mandatory meetings, including nominations, agendas, voting and minutes.
- Actioning committee decisions.
- Communication - managing all communications to owners and committee members, enforcing all by-laws and dealing with disputes.
- Repairs and maintenance - organising tradespeople for scheduled or ad hoc work, as well as creating an appropriate preventative maintenance program.
- Legal compliance - knowing about and understanding all legal and compliance requirements and obligations. This includes the Capital Works Fund Plan, window safety devices, proxy limitations, voting methods, adoption of the model by-laws contained in the Strata Schemes Management Regulation 2016 and so on.
It’s a potentially significant investment of time, as well as a big commitment to take on. Failure to adequately manage the scheme’s affairs on behalf of all owners could prove costly and potentially devalue your property. Any strata scheme, irrespective of size, faces the same obligations and compliance issues.
Strata legislation to be aware of
Strata legislation is largely driven at a state/territory level, so it may differ depending on where you live. These are just some of the pieces of legislation you need to know about and monitor for changes.
As legislation changes over time, you’ll need to keep up-to-date with any changes that impact the strata scheme and determine the best course of action to implement the changes.
Why good strata management is important
Before buying a strata property, people are advised to request a copy of the strata report. This provides information about the property’s finances, record keeping and AGM minutes. It indicates how well the property is run, whether there are any outstanding issues and whether the finances appear adequate for current and anticipated future outgoings.
Potential issues may cause a potential buyer to lose interest or try to negotiate a lower purchase price to compensate for potential future outgoings.
How do I know if I should self-manage my strata?
Ask yourself these questions.
- Do you understand the time, experience and skills required for all the tasks?
- Are you aware of the potential complexity of strata management, including the legal and compliance requirements?
- How will you ensure the affairs are run in the best interests of all owners with genuine concern for the ongoing issues affecting the upkeep and value of the property?
- Are you able to commit to the role for several years?
- Will you be able to support the decisions made on behalf of all owners with appropriate records and evidence of any professional advice sought?
- Do the current owners all generally agree and live harmoniously and meet regularly?
Seek strata experts to help you
If you’re already managing a scheme, or you’re unsure about everything that’s involved, another option might be to consider outsourcing some of the responsibilities. Engaging a professional
company to do your record keeping and/or provide advice on legislative matters would relieve the owners’ committee of bookkeeping and ease any compliance requirements for far less cost than full strata management.
Using a specialist strata insurance broker will also help ensure you have the most appropriate protection for your property. BCB works with you to ensure your property is adequately insured and
compliant with more than the minimum regulation requirements for sums insured and coverage. By recommending property valuations, advising the insurer of any proposed major capital works and
outlining any unique features that require special coverage, such as machinery, heritage considerations or cover for jetties, we can seek a range of quotations from the market for. What’s more, our experience and independence from insurers allows us to work as an advocate on
your behalf in the event of a claim, to help you feel supported all the way through to settlement.
If you would like to find out more about how BCB can help, please get in touch.
Here are some other useful links if you are self-managing strata
Why Choose BCB?
BCB is Australia’s largest specialist strata insurance broker and one of the 475 strong Steadfast Group member network.
With over 25 years’ experience partnering with strata managers, BCB offers scale, market leading technology and technical expertise for strata and community living property and related insurances.
Working in the interests of the owners, BCB provides dedicated broking resources and a full market solution, complimented in-house claims expertise, including for large and catastrophic events.
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