In April 2021, Kate (an owner in an OC in Caulfield) called into our office and wanted to know why her body corporate levies were so high and getting higher as each year went on. A common question but really one that always requires a little digging deeper into the given circumstances of the owners corporation and building.
We asked her a few follow-up questions about what had been occurring:
- Has there been significant building repair costs in recent years?
- Were there a lot of owners not paying their levies (meaning other owners would have to contribute to the temporary shortfall)?
- Had there been a lot of insurance claims that had driven up their insurance premium?
- Did the building have a lot of additional facilities and amenities? (i.e. multiple lifts, the classic pool/gym set-up contributing to costs, vertical gardens, extensive common areas that require regular cleaning, car stacker units, etc.)
- Did the OC have a lot of additional Committee Meetings and General Meetings that would have driven-up the costs of the owners corporation / body corporate management services?
Reviewing Owners Corporation / Body Corporate Costs
Kate went away to investigate further and hold discussions with the Committee of the owners corporation. The Committee held discussions and decided:
- There was a lot of costs that the building was incurring that they had some questions about; and
- That their owners corporation management company was actually in fact quite ordinary and the Committee / OC wanted to change owners corporation management companies.
The Committee asked us to review the latest full year’s income and expenditure statement of the owners corporation:
A few points arose from this review and discussion – why was the OC incurring so much costs for essential services compliance? Which and how many line items of OC costs/expenses was actually fees charged by the incumbent OC management company?
In August 2021, we met with the Committee to discuss the process for changing owners corporation management companies. We discussed the OC’s contractual OC management contract, we discussed timing, what we do, and how we would guide OC through process of changing management companies.
Qualified OC Management Companies (Victoria)
Every single OC management company we work with is carefully vetted and scrutinised in terms of their:
- OC experience and relevant qualifications
- Service and service metrics
- Integrity & values
- Dedicated strata software platform, systems, and processes
- On-going knowledge and training
Since January 2014, our strata expertise and OC industry knowledge has helped Committees to remove the guesswork when it comes to changing OC management companies.
Changing Owners Corporation Managers (Caulfield North, VIC)
We met with the Committee to understand their concerns with the incumbent OC manager and discuss what they would expect of their new OC manager.
After compiling a RFT with information and specifications particular to their building, we conducted a tender process. We met again with the Committee and helped them to understand all the new OC management proposals in terms of their offerings, qualities, and costs.
The Committee chose a company that was less expensive than their incumbent and we assisted with the OC management changeover process.
COST COMPARISON – CHANGING OWNERS CORPORATION MANAGEMENT COMPANIES
OLD OC MANAGEMENT CO. VS NEW OC MANAGEMENT CO.
|Cost Comparison||Previous OC
|Software, Work Orders + Misc.||$0||$0|
|Other Additional Charges||$3,256||$0|
|Total Strata Management Costs||$10,551||$8,976|
*OC guidance for all Committees: be careful when it comes to OC management contracts and ‘open-ended, blank cheque’ disbursements sections. Some OC management companies charge for every work order, phone call, email, page of paper, printing, postage, envelope, etc.
The vast majority of OC management companies that we work with – charge a fixed, all-inclusive fee for their disbursement costs. And of these OC management companies, most will waive their disbursement fee if lot owners elect to receive OC notices electronically.
We helped the Committee to help save all owners in the owners corporation in Caulfield North $1,575 per year on their strata / OC management costs.
Needing OC Guidance on How to Change Owners Corporation Management Companies?
Strata Consultants Melbourne guides OCs and Committees through the process of changing owners corporation management companies – start by speaking to us on 1300-917-848 or email us via firstname.lastname@example.org
Meet the Strata Consultants Melbourne team – https://strataconsultants.com.au/our-team