Ok, so we admit it, the title of this blog is clickbait. We don’t really think that developers are the devil. We know many quite lovely ones. Development is important. Housing is necessary. New buildings are needed.
HOWEVER
What we do believe is that a strata manager appointed by a developer in the initial period, cannot be an impartial strata manager for the owners corporation; here’s why.
- Ongoing relationship – Conflict of Interest
Developers represent to strata management companies a pipeline. Promised future appointments, planned out in advance, of sparkling new buildings. It’s one of the main reasons strata managers love working with them. Build the right relationship and your business in guaranteed growth.
How do you build that right relationship? Arguably, by making life easy for the developer. How do you make life easy for the developer? You don’t make a fuss about building defects.
An independent strata manager, on the other hand, with no concerns about maintaining a relationship with the builder or the developer will give you advice in relation to building defects with only one goal in mind, the best outcome for the owners.
- They work for free for the developer
We’re giving away trade secrets here, but owners should know. Most strata managers do not charge developers for the set-up work they do prior to the first AGM. We’re talking up to two years of free work including setting budgets, reviewing by-laws, giving advice on strata plan set-up, attending settlement days. That’s a lot of free work that needs to be made up somewhere. And yep, you guessed right. It’s the owners who ultimately end up paying.
- The law thinks it’s a bad idea
Section 49 (3) of the Strata Schemes Management Act 2015 states that the developer, or anyone connected with the developer cannot be appointed as the strata managing agent for a period of 10 years from the registration of the strata plan. Unpopular opinion, but surely undertaking work on behalf of, and under contract with the developer is a connection?
More Than Strata are committed to working for owners. Only for owners. Our advice will always be directed to ensure the best outcome for the owners corporation, without a thought towards maintaining a relationship with a builder or developer. More Than Strata, where integrity leads without compromise.
