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Hiring a Strata Manager: 3 Common Contract Mistakes

by Martin Williamson

If your strata community has recently agreed to hire a strata manager, you will want to make sure you get the best person for the job. Below is a guide to 3 common mistakes which people make when negotiating a new contract with a strata manager.

Granting the power to delegate responsibilities 

One of the primary reasons for hiring a strata manager is so you can be sure that there is a responsible person in charge of carrying out the daily tasks required to maintain the properties within the community. If the contract grants the strata manager any powers of delegation, this could prove it be counterproductive, as it would allow the manager to pass on his responsibilities to others. This situation could place highly confidential information at risk or could lead to daily task not being completed on time.

Granting the power to make decisions regarding restricted issues 

The contract of employment should never grant the strata manager the authority to make decisions regarding restricted issues such as the types of extensions which can be constructed, or the types of access rights people should have to the land surrounding the community. These decisions should be made by an assembly of title owners. It is the strata manager's job to implement the decisions made regarding restricted issues, not to make them.

Granting the power to determine any levies

It is inadvisable to give the strata manager the authority to determine the different levies that community members will need to pay in order to maintain communal areas and utilities such as gardens, access walkways and street lighting. This power should be in the hands of the strata owners. Allowing the strata manager to determine these cost could create conflict between the manager and the community. It is important that the strata manager is seen as an impartial agent who is carrying out the instructions of the owners, rather than making decisions which will directly impact the strata community.

It can be helpful to view draft strata management contracts so you can get an idea of the scope and focus of each clause. Doing so will help you to establish what to include or exclude from the draft document. You should also consult a lawyer from a strata management firm who will be able to read over the draft contract and suggest any amendments you need to make to ensure that it complies with Australian law.