How to Change Strata Management Companies?

How to change strata management companies? Changing strata management companies involves many considerations, conversations, and processes. Even more important is choosing a professional and competent strata management company that won’t cause you the same problems as the last one. So, how to change strata management companies? This is our comprehensive guide.

  1. Best way forward to speak with Owners and Stakeholders
  2. Understand where the majority stands when it comes to changing
  3. Give due consideration to the strata management contract and owners corporation legislation
  4. Properly understand your strata management needs and requirements
  5. Be fully and informed when it comes to the strata management landscape in Victoria

These are the primary areas of considerations that strata management Committees should duly consider when it comes “how to change strata management companies?”. Let’s discuss each in detail.
 

1. Best way forward to speak with Owners and Stakeholders

A owners corporation is made up of Lot Owners who each, whilst owning their own individual strata title lot, are members of the owners corporation. The member of the owners corporation are like shareholders in a company and may elect a management Committee to overview strata management matters.

Most owners corporations in Victoria will engage and employ the services of a professional strata management company. The appointment (and termination) of the strata management company is solely and 100% the choice and decision of the owners corporation owners.
 

2. Understand where the majority stands when it comes to changing

When it comes to answering “How to Change Strata Management Companies?” – importance must be placed on the majority. Owners corporations are like a democracy in that it is the majority who makes the decision.

If there is a strata management Committee then, typically, the decision to change strata management companies will be that of the majority of the Committee [pending a number of other factors].

If the owners corporation hasn’t elected a management Committee then, typically, the decision to change strata management companies will be that of the majority of the strata title lot owners.
 

3. Give due consideration to the strata management contract and owners corporation legislation

In Victoria, changing strata management companies requires owners and Committees to consider the following facets of strata law and legislation:

  • Contract law – what does the last signed strata management contract binding the owners corporation to the strata management company say? What are the terms and conditions? i.e. if the strata management were to be changed another services provider.
  • Statute law – the primary piece of legislation governing owners corporations and strata management in Victoria is the Owners Corporation Act 2006. However also worthwhile understanding these amendments and updates to OC Act 2006 that may be relevant.
  • Common law – owners corporation matters and disputes are resolved through the Victorian Civil & Administrative Tribunal (VCAT). Matters and disputes revolving around the termination, sacking, changing, and exit of strata management services can sometimes be presided and decided by a VCAT Member. As such there are numerous VCAT cases and legal precedents that may relevant to you when it comes to changing strata management services.

 

4. Properly understand your strata management needs and requirements

It is important to remember that there are effectively two things that require and are seeking management services:

  1. The physical building itself;
  2. The owners corporation i.e. all the lot owners and the Committee.

Each building is different and each building will its own set of priorities and needs. As a high level example, older buildings will require a lot more attention with regards to maintenance plans, raising maintenance funds, and addressing issues before they get worse or become a safety issue. Where as newer buildings, the overarching priority for owners, Committees, and strata managers should be about building defects (in Victoria you have six years to make a claim for structural defects and two six years for non-structural).

Owners and Committees are also going to have different demands of their strata manager. This requires consideration and mapping out.
 

5. Be fully and informed when it comes to the strata management landscape in Victoria

In Victoria, there are over 90,000 owners corporations – comprising of over 1,000,000 strata title lot owners.

In terms of strata management companies in Victoria, there are over 1,300 strata managers. These range from established strata management companies (large to small), real estate agency managing owners corporations, and right through to the one-man operators who have been doing it for 5 minutes.

Strata managers look after not only your owners corporation but also your money.

Going through a proper tender process and carefully choosing your new strata management company are important in equal measure – have a read of this article for one example of where did things didn’t go right – Don’t Trust a One-man Band with Your Money (or Strata management).

Lastly, at Strata Management Consultants Melbourne we specialise in, not only guiding Committees on how to change strata management companies, but have also carefully vetted every management company we work with.

Find out more about the value of having a Strata Consultant working for you here, or feel free to get in touch on 1300 917 848 or via email at office@strataconsultants.com.au

 

How to Change Strata Management Companies? – Content Copyrighted 2020 by Strata Management Consultants

 

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