The world of strata management is mysterious enough to a lot of people, and the best kept secret of all does nothing to help owners understand their rights and responsibilities – the terms of the contract with the strata manager and when that contract expires.
Typically strata managers’ contracts are held by the managers, and only a few strata committee members have ever seen a copy let alone have one in their possession. Such is the hold that managers have over owners with these tactics that even experienced and confident business people serving on committees feel uneasy about asking for a copy – ‘What if the manager thinks we are unhappy and want to change providers?’. Which of course is precisely the point of withholding the document.
The date the contract ends is the strata manager’s dirty little secret. If they don’t tell the owners when it ends, it automatically ‘rolls over’ under the terms of the same contract in use and even then it can only be ended on 3 months’ notice by a full meeting of the owners, the mailing list for which is held by the incumbent strata manager.
The days of this dirty little secret are numbered, for New South Wales at least. When the new strata laws take effect on 1 July 2016 strata managers must give owners notice in writing advising of the end of the contract and then again as the end of each rollover period approaches.
Just as we do when we receive notice of the expiry of our insurances and the end of our phone plans, these notices will cause strata committees to think hard about the value for money they are getting from their strata managers. When they ask the question ‘why should we renew with you?’ strata managers had better be ready with a good answer.