Self Managing a Strata Plan

Hi Sujenna,

I imagine with only 2 owners and 2 townhouses it would be fairly easy as long as the other person is cooperative. If they’re not, or refuse to pay levies it could become difficult. Or if you’re not good at budgeting and record keeping.

How much shared property is there? Driveway/ plumbing/ roof/ walls/ electrical? You need to see the plan drawings.

The main things will be –

1. Hold a meeting with the other owner with a motion to move to self management. Minute this and both sign it.

2. Inform the strata manager and give any required notice and/ or pay exit fee.

3. Set up a business transaction account with both owners as co signatories to keep trust funds – you’ll probably both need to go into the bank with the original signed minutes and your ID.

4. If insurance is due for renewal – Organise insurance – I recommend contacting Strata Fair brokers – they are very helpful and will save you money.

5. Inform utility companies of change in where to send the bills

6. Pick up your records/owners seal from the strata manager.

7. You may want to store your records using dropbox, Strata box, or Our Body Corp. The last 2 have more options to help with managing your strata. It’s also good to set up an email specific to your strata plan. This way all your records are backed up on the cloud.

8. Hold a meeting and elect a Chair, Secretary and Treasurer. Decide who will do what re record keeping, reporting, how much levies, issuing levy notices, organising contractors etc.

9. If there’s a current gardener/ cleaner – contact them about continuing arrangements.

10. Ongoing keeping accurate records in an organised and timely manner.

11. Create quarterly and annual financial reports (at minimum bank statement, matching list of income and expenditure items, and matching receipts) and an Annual budget.

12. Update details on strata hub, then Annual Reporting on strata hub.

13. Annual tax return/ report – very basic

14. Have at least one meeting a year and minute it.

15. Get quotes and contractors when needed (make sure they are licensed and insured) and supervise works and pay them.

16. Most important –  be able to work cooperatively with the other owner to maintain shared property.

17. Familiarise your self with the strata schemes management act and regulations, and read up on the service nsw living in strata information pages

It doesn’t matter if you don’t do everything perfectly – you’ll learn and get better as you go. The main thing is that you can get along and agree with your neighbour about how you will manage and pay for things, and keeping records of this.

Definitely get a strata report – see how long the current contract is for and what the ending the contract terms are, as well as how much is in the sinking fund and what any issues have been.

Check the lot entitlements, are they equal or one higher than the other? – with only 2 owners you can get a stalemate. The one with higher lot entitlements would win every poll vote if it came to that.

I’d speak to the other owner and see what they are like and what they think. This is the main thing – how open they are to self managing, how much work/ time they’re willing/ able to put in, if they’ll pay levies and be responsible without needing a strata manager parent, if what you both want is compatible and can work – eg. Similar vision and priorities in how you want to manage your property.

If you decide to get a new strata manager, take your time and research them – check their standard contract and how clear it is about what is included and what is extra. Insist that monthly bank statements are provided as a contract term. Have a look at some of the properties they manage.

Some strata managers offer levels of service – eg collecting levies, paying bills, record keeping, budgeting, insurance arrangement included, and anything else like arranging contractors, answering queries is extra billed per item. You could choose something like this.

I hope this helps. Good luck 🙂

Sujenna,  firstly the numbered list and outline by newb is excellent.   Self management is not hard I have been in a few strata that have done it. Never a 2 owner strata, the smallest I have been in is 5 unit.

As Jimmy  says you need to  examine the contract to see when and how the current strata manager can be  exited.  If you are otherwise happy at your existing strata why not see if  it could be self managed?

The rules and regulations around strata have become more complex and time consuming over the last 10 years.

However the availability of most things via the internet is a boon for self managed strata. With email and electronic banking it is mostly very easy.  I find one thing that is great is having your strata bank accounts on line.  I set them up so that every owners can view the balance of accounts but it takes 2 owners to make a payment.

I have found the main issue for self managing is assigning responsibilities. Usually when you ask for volunteers to step forward everyone takes a step back.  My way of encouraging self management is looking at the annual fees to the contracted strata manager and the service they provide.  I then worked out by self managing we could save ourselves over say $5,000 a year which can be used to reduce levys but also be better spent on repairs etc.

From what I have seen and read contracted strata managers only do the administrative work which with a little input from 5 owners can be done without placing too much burden on anyone.  At each AGM we elect 5 executive members as below:

1. Chair, this role includes resolving issues of compliance with the act and others like “who responsibility is it” (the department of Fair Trading in NSW has comprehensive guidelines on this)
2. Secretary, preparing and distributing the Agenda and Minutes.
3. Treasurer, requires some money awareness in preparing year end accounts (I do this easily using a spreadsheet.  Also whose role also is initiating payments to tradesmen, vendors etc
4. On Site Manager for arranging repairs and looking at issues raised
5. Levy issuer and Bank Inspector for issuing notices to owners that levys are due and checking that levys are paid (issuing a reminder to delinquent payers).

The strata can try it for a period and always go back to a contracted manager

Cosmo wrote:

From what I have seen and read contracted strata managers only do the administrative work which with a little input from 5 owners can be done without placing too much burden on anyone.

Have a look at online services like our sponsors Stratabox.com.au.  It has all the functions you need to make self-management easy, effective and compliant with the law.

Your owners will save  $2500 to $3000 a year just by not having a strata manager. Lord know how much they’ll save by not having poor decisions made on their behalf.