Recommendations For Strata Management Agencies

Here’s a summary of the recommendations for strata management agencies from the McGrathNicol report released last week. These are likely to be adopted for strata management in NSW. I suggest this is a standard to which everyone should be held accountable, nationwide.

These recommendations relate to implementing policies, updating registers and policies, dealing with complaints, transparency of fees and strata manager remuneration, and a review of market rates for the provision of certain services.

The report recommends strata management agencies:

1. Implement firm-wide conflict of interest and code of conduct training.
2. Require annual conflict of interest declarations from all staff.
3. Implement version control for policies and procedures.
4. Enhance whistleblower policies with a named protection officer and improve accessibility.
5. Update employee handbooks with key policies.
6. Improve website complaints sections with clearer resolution processes.
7. Include customer complaints as standing agenda items at executive board meetings of your agency. 
8. Assign complaint oversight to your compliance function.
9. Implement annual staff attestation for compliance with key policies.
10. Update risk management frameworks and matrices.
11. Establish a regular review schedule for your risk management framework and register.
12. Review strata manager remuneration to include governance and compliance KPIs and remove incentives based on the provision of additional services to strata schemes. 
13. Enhance fee disclosures in management agency agreements.
14. Rotate auditors for strata schemes and implement random selection from a panel.
15. Develop improved one source of truth information systems for strata plans.
16. Add explanatory material about Section 102 of the Strata Schemes Management Act 2015 (NSW) in meeting agendas.
17. Review the necessity of charging strata schemes for conducting a single compliance search.
18. Improve transparency when billing vendors with commercial arrangements.
19. Implement controls for Section 102 compliance when engaging contractors.
20. Review inherited contractor agreements for fair market value.
21. Enhance commercial arrangement disclosures regarding commissions and fees.
22. Provide annual fee summary reports with detailed remuneration information.

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