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Being quite new to providing trade services to strata buildings, I was a bit shocked when requested by the strata company to pay a monthly fee to be on their trade register.
They assert that this covers their time to put me on their register, check that I have appropriate insurance cover etc, advertise on my behalf on their website and arrange repairs for strata buildings.
I cannot opt out of the advertising because they will not give me any work if I am not on their register.
I recognise that there is time involved checking that I have the right license etc but this is an annual activity? With arrangement of repairs, isn't that what the strata management fees go towards and so, isn't this double dipping?
I am told my fee (which is significant) will be reviewed annually and is based on volume of work – is this something that must be disclosed to the Owners corporation?
Is this legal/ethical/standard practice?
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I don't think it's illegal, not sure if it's standard practice and whether or not it's ethical depends on how it's managed.
There are obvious advantages on being approved by a strata manager and being able to advertise on their site. There is obviously a cost involved in all of that and your question has to be whether it's worth it to your business or not.
However, if the strata managers are, as you say, double dipping, it does sound a bit dodgy.
But there is another point here. Strata managers are notoriously underpaid for the work they do. They are caught in a nexus where, if they put their fees up, someone else will offer a cheaper service and, since they are generally under-appreciated, a lot of OCs will grab the opportunity to save a few bucks. It's almost never a good idea but it can take years of bad service before they realise they made a mistake.
However, in the short term that forces strata manager fees down and leaves them to find other ways to make money or at least offset costs and it sounds like this might be one of them.
I'd be tempted to call some of the other tradies listed and ask them if they think it's a good deal. If enough of them say no, then you might be able to change things.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.
Ethically speaking, it sounds like a rort, just like every other financial rort that uses the excuse of 'security' in one guise or other as its shield.
The job of the executive committee and the managing agent is to act in the best interests of the owner's corporation. This means keeping costs down and the quality of work high.
Three completely separate legal entities are involved here: the owner's corporation which theoretically has the most power with the managing agent wielding the least, whist in practice it's the reverse. Deterring potential tradesmen who might provide a cheaper, quality service by charging them a fee is not acting in the owner's corporation's best interest, in my humble opinion.
My managing agent has his own tradesmen on hand, but as he is a managing agent is always only a servant of us owners. We unit owners always obtain quotes by our own quality tradesmen who are usually cheaper, and so we employ our own on a repeated basis. We're a small complex so I'm not sure which entity 'we' are actually acting as, owners corporation or executive committee. Larger complexes are more prone to rorting and unchecked management decisions because owners simply don't know or have the time to check what's actually going in.
Sounds like a managing agent-contractor relationship is, like many respected professional relationships, based on personal connections and the whim of the person wielding the decision-making power.
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