Strata management companies offer property owners living with strata title manage their property that is shared with other owners. With these services' help, managing common property becomes more accessible and more convenient for property owners. However, these services are offered against a fee. According to industry norms, different strata management companies can charge varying amounts against their services. Moreover, they can increase their fee from time to time as well. Since many people don't know how strata managers work, they usually question the periodic increase in the strata management fee.
This post looks at why strata managers need to raise their cost from time to time.
Why Do Strata Managers Need to Raise Their Costs from Time to Time?
Strata Managers Cover Maintenance and Other Administrative Costs That Are Subject to Change
According to the new Strata Schemes Management Act 2015, the Key Financial Information Statement requires strata management companies to report two categories of expenses.
- The maintenance cost and,
- Other administrative costs.
Since there is no specific legislative requirement, most strata managers classify utilities, repairs, pest control, pool cleaning and other maintenance costs under the first heading. At the same time, all the other fixed administrative costs, including but not limited to a bank fee, insurance premiums and other costs, are classified as administrative costs. While other administrative costs are likely to remain fixed (unless in case of change in interest rates), the maintenance cost is often subject to change without prior notice. To counter this change in expense, your strata manager may revise their service charges periodically.
Strata Management Cost is Often Not Fully Understood
Most owners are unaware of what is truly involved when it comes to strata management. Since the tasks performed by strata managers can often not be seen (as they are performed behind the scenes), many owners underestimate the cost and complain about higher charges for strata management services. But if you take a closer look and understand their working better, you would realize that they are charging for the actual expense they need to incur, and such charges are always subject to change due to uncontrollable factors.
If you think your strata manager is frequently increasing the cost for no reason, think again. They may have genuine issues that you are not always aware of. Moreover, if you are looking for strata management services, focusing only on cost is not fair, especially if you don't focus on the quality of services offered. Make sure you choose a strata manager with relevant experience and a strong personality so you can manage your property better. To find out more about strata management services, get in touch today.