Great Strata Swindles And The Role Of The Doomed

It’s always amazed me more strata managers don’t steal from strata schemes. Two recent cases might indicate that’s changing.
One involves a straightforward theft of over $1M from strata administrative and sinking funds. This is an ‘I will put it back Monday when I have won at the track’ type crime. The motives are simple: the temptation too great.
The other case is more sinister. It involves double charging over one hundred thousand dollars by a strata manager for work already done after receiving a notice of termination. Adding insult to injury, the double charged fee for alleged additional work was 5 times the annual base management fee.
The common denominator in these two recent cases is the lack of risk management by the committees. It starts with ‘pick the lowest tenderer’ thinking. The lowest will likely be the newest, the smallest or the nastiest provider without a reputation to protect.
This thinking moves from meanness to neglect when a committee member is not a co-signatory to payments and there is no visibility of the account transactions.
Neglect becomes absurdity when the bank recommended by the strata manager pays an undisclosed commission to the strata manager for the banking business of the scheme and the bank won’t release funds to the scheme when the strata manager is sacked.
Owners should treat scheme money as their own; because it is, and also realise that you get what you pay for, and sometimes even less.

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