The PROPERTY DOCTORS, Sydney Australia Novak Properties
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The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP. 1371 BAD STRATA? BIG DRAMA! HOW TO PICK THE RIGHT STRATA MANAGER FOR YOUR BUILDING
Unlock the secrets of effective strata management with Greg Williamson, a seasoned expert from Stedman Williamson, as your guide. You'll gain valuable insights into selecting the right strata management company and the critical factors every owner and executive committee should consider. From assessing experience and mediation skills to understanding the hidden costs that can arise, this episode promises to equip you with the knowledge to make informed decisions and avoid common pitfalls. Greg shares his firsthand experiences, highlighting the importance of proactive engagement and asking the right questions to ensure your management company aligns perfectly with your building's unique needs.
Choosing the right strata manager can be a daunting task, especially when reputation doesn't always equate to competence. Greg discusses the nuances of selecting a manager, emphasizing the need for negotiation to secure someone who truly fits your strata owners corporation. Despite technical hiccups, Greg's expertise shines through, offering practical advice and guidance for those navigating the complex world of strata living. This conversation is a must-listen for anyone involved in strata ownership, providing the tools and confidence to select a manager who will safeguard your investment and enhance your community living experience.
Good morning guys. We are talking about bad strata creating big drama. We've got Greg, a strata expert, on this morning to talk to you about this. The pitfalls, the horror stories and the success stories stay tuned. This is gonna be super helpful for any owner in any strata building. I'm the ringleader. Morning Greg. Thank you so much for joining us.
Speaker 2:My pleasure, billy, as always. It's so insightful to have you here.
Speaker 1:It gets me so excited as an owner in a Strata building. I'm just sure you know you must talk to people and they must just say I wish we found you five years earlier.
Speaker 2:That's a very common comment. And or if they have left over the years and when they come back they go. We made a terrible, terrible error, yeah, but that's fine, you know, and that's just strata living, yeah yeah, but this is relevant.
Speaker 1:I think one in seven families for australia are now involved in in strata um. I can only see that getting more as well. You know it's a popular way of and it works really well. But it's designed for sort of harmony and organisation and sometimes you see that go the other way around.
Speaker 2:Very much the case, very much the case. So, as you know, billy, we are a strata management company, but we exclusively only look after court-appointed work. So I'll make sure that everyone's aware that we're not looking to take strata buildings away from existing strata managers. We're strata experts and we consult to other owners, corporations and other strata managers and we look after the dysfunctional side and what we try to do is make sure that they're not dysfunctional when we hand our buildings back to them. But I think you wanted to talk today about how do owners executive committees select the right strata companies for themselves?
Speaker 1:yeah, absolutely. Um, because a lot of people when they're buying their first um, you know, property in strata, they're just taking on you know the management that's already there and sometimes they like to be involved, sometimes they like to be really, you know, removed from from that um process. So what are the? What are the um? The small, you know the small questions you can ask from the start to sort of know whether you've got the right person on the job look, we'll start off with some fundamentals.
Speaker 2:Let's assume for a second that you've had the same strata manager for the last five, six, seven years. The contract's coming up for renewal. It's no different than any other commercial style of contract. What you should be doing prior to the term, the expiry of their contract go to the term the expiry of their contract go to the market, get a couple of quotes and compare right. And that's where the problem lies, because a lot of executive committees and owners will sit back and go john smith, proprietor, limited strata manager, we love him to death, but this is his annual fee. I've got a quote from two other strata firms and they're a couple of thousand dollars cheaper. That's not how you compare strata manager to strata manager. You know just the annual fee. You're in trouble. So to give you a practical example, when we're coming up for the termination of our appointment from the court, we ask the owners to go off and get three quotes. We don't like getting two, we want them to get three quotes from three different firms. And then what we do is we do an analysis for them. And then what we do is we do an analysis for them and that just breaks down the basic annual fee, what they charge for all their incidentals, what their fee for additional work, their hourly rates, and that's fine.
Speaker 2:But then you've also got to look at what does the owner's corporation want from a strata manager moving forward. What is their experience, you know, have they? They may have been a strata manager for 20 years and the other strata manager may have been a strata manager for 15 years. But the firm that's got 15 years may be more experienced in what you're looking for. In other words, are they good mediators? Can they problem solve the guys with 20 years? Are they running off to firms or solicitors to get basic advice from you? You know, while that may not be a charge from the strata manager, you've got additional fees that are going into. You know, legal fees.
Speaker 2:You know, and that's what you've really got to ask. You've got to ask some pertinent questions and then we do an analysis, we come back and say this is where they break down. We don't make any decisions for those and that's left up to the committee. So you've really got to do some deep diving and you've really got to ask the questions what are you expecting and what type of service? You know, is your committee at the moment very proactive. Are they prepared to do a lot of the background work as their role as a committee, or are they looking for the strata to manage it to do 99% of everything? And so we offer that service not only to our clients but to anyone that's looking for something to be able to compare, because where do you go to actually work out how long they've been in the industry, what their experiences are and, bottom line, what are the end costs are going to be to the owner's corporation?
Speaker 2:Now where do you go? It sounds very simple.
Speaker 1:Is there a website or is there a compare the market like doing your car insurance?
Speaker 2:Oh, look, there's a couple of firms out there that do it. You know we do it in-house at the moment, you know. But the big question is, if you're just pumping in some basic information, they're not going to be able to ask you the straightforward questions. You know, how is the building being run previously? What are your biggest concerns? Are you going to be holding two, three, four, five general meetings during the year? You don't know, but you can look at that and that's what we do. Look at when we do this consulting work for clients, we ask the deep questions and then you've got a fair comparison. And if you look at when we do this consulting work for clients, we ask the deep questions and then you've got a fair comparison. And if you look at I'm trying to think of a good analogy if you're going off to buy a car and you've decided on the brand but you don't know what model you've got to, then look at do you want power steering? Do all that shows my age? Do you want all the extras? And if you do, are you going to be absolutely using them? And you've just got the big tick, tick, tick, tick box.
Speaker 2:No, it doesn't come included, or it's an optional extra and that's where a lot of strata firms will have so many more additional charges. It's not the base annual fee, it's not just the base photocopying. Some strata firms say we will charge you for reading an email, sending an email. Some others won't charge you for that. Some others will say we have a fair use policy. In other words, if we get more than 25 emails in a week, it's free. Oh sorry, it's, it's chargeable. If it's under that, it's free. So they're all the little things. And because once you've signed that contract, it's too late, you know, you're in a binding contract, you know.
Speaker 2:Oh, we weren't aware. Well, that's not, you know, an excuse of not paying a bill and that's why sometimes owners have a tendency to flip-flop from starter manager to start a manager. You know, it takes a while to get to know your building and if you've signed a three-year contract and you're not happy, then you've got to be able to find a reason to terminate. And just because you don't like their fees and charges isn't a way to break the contract now I've got.
Speaker 1:I've got another question for you. You mentioned off air. Sometimes you've got a building and you know they're doing a really good job on that one, but it doesn't always mean they're going to be the specialist for you know another building. Do you find some people better than others?
Speaker 2:Oh, absolutely it is. If I give you two basic examples you've got a starter manager again, or a firm that has does the normal day-to-day repairs sending out a plumber for a nice tiny little leak and sending the electrician out for a blown fuse or something like that and he's really, really good. They're proactive, they jump on those type of work orders. And then you've you decide that you want to take him on, but your building's also now got concrete cancer or it needs a new roof, or it's got some structural issues, and you've got to get engineers involved. You've got to get council involved. That may be on their day-to-day running, they may be able to attend to it, but they've got to have to learn on the job and you're going to be paying for them to learn on the job.
Speaker 2:Or they think they know what they're doing and they get themselves into trouble. You know time wise, because it's taking so long. You know they've got to hold all these extra meetings. Or they don't get the meetings done correctly, or motions aren't passed correctly, they're not going out and getting the mandatory two quotes, or whatever it may be, or sending contractors who are not experts in their field. You know it might be. Oh, we've got a brother who's an engineer, but you don't just need an engineer. And taking on what Sydney's going through at the moment with all the water, they will send someone in there to clean the mold.
Speaker 2:Well, that's not good enough, you know, just cleaning mold off you really, if it's really really bad, you need a occupational, you know hygienist to go in. What's causing the mold? Is it just a normal leak? But you've got to find those things and with a occupational hygienist they will tell you what type of mold you've got. You know it can be and molds deadly. You know you've just spraying it with some vinegar and, uh, hot water isn't going. It might kill that but it doesn't affect and get rid of the actual causation.
Speaker 2:So you've got to look at the experience. One of the other questions that you should be asking your strata manager on the firm, because you're remembering you're not signing a contract with John Smith, the strata manager. You're signing a contract with you know Billy strata management firm and he may appoint John Smith, right, right, what happens if john smith uh, decides to leave, or you want to change, or they change internally? You've got to be able to have some type of a say is well, we don't want to change strata managers, or if he retires, who are they going to give you? You want to have these types of input. So under the new um fair trading act, which is, you know, unfair contracts. Owners corporations now have the right not just to be presented a contract and say sign on the bottom line, you have to have negotiations. And you have the right as an owner's corporation to negotiate. To say, if you change strata managers internally three times, we want an out clause, you know.
Speaker 1:So you've got to be able to look at all these types of things um one more question yep sure, um, I know you can't name favorites as such, but if you were to sort of speak to someone today and say here's three people you can turn to just off the top of your head any sort of final names that come to mind.
Speaker 2:I really can't answer that, billy. You know we don't play favourites because if you're looking at some of the bigger firms again it comes down to it may not be the firm, it may be the strata manager. I know an enormous amount of really good strata managers. I know some really good firms, but that doesn't guarantee that you're going to get that strata manager out of that big firm now. You can request it, but the last thing you want is a strata manager.
Speaker 2:That's really really good, but he's already at capacity uh so the firm may want the business, but you if he sits back and says oh look, I'm now managing 100 buildings. I can't take on another Strata owners corporation, so you've got to be able to. There's the type of questions that you've got to be able to look at when you're actually shopping around. You know who is going to be appointed to us and be able to and you've got that negotiation skill ability, I should say and but that's what we're going to be looking at, for anyone that's looking at it will say look, um, the three firms that you've nominated um frozen a little bit there, that's okay.
Speaker 1:Yeah, so if people need your help and people are looking for a new Strata manager, new Year's just be cool the internet.
Speaker 2:Yeah, I was just saying if people need your help they're looking for a new Strata manager.
Speaker 1:Can they give you a call? We've lost you, greg, but I'm sure the answer would be yes. Greg Williamson, stedman Williamson, keep talking and you can give them a call anytime. Greg, thank you so much for coming on you.