The importance of strata management selection

Changes to the Owners Corporations Act, which took effect in December 2021 have placed additional obligations on them here in Victoria, further highlighting the need to select strata managers who understand the inherent challenges of establishing new projects. This is irrespective of whether they are high-end residential blocks, mixed-use multi OC projects, build-to-rents, NDIS or commercial/industrial sites.

Your strata manager, acting as an extension of your brand post-settlement, assumes a pivotal role that commences even before the construction phase. Their proactive involvement can significantly contribute to the success of your project.

In addition to preparing the contract of sale budget or fee estimates and reviewing rules, a good strata manager works with the development team to understand the end user, the layout of the common areas, and how these will be impacted by design or architecture considerations.

Understanding these buildings ‘from the inside out’ not only provides the manager with the ability to add significant value during the planning process but also underscores the importance of their role in the project.

These considerations include:
• Common area amenity composition: what will residents want and use?
• Materials and finishes: what looks good may be incredibly expensive to maintain.
• Common area design: mailboxes, parcel lockers, building manager rooms – where do they go?
• Safety and security: access control and CCTV implementation, design and installation.
• Compliance: height safety and fire service maintenance.
• Plan of subdivision: segregation of costs and apportionment of charges per user type.

Once the project is close to completion it is imperative that the manager engage the builder and their subcontractors to understand warranties and initial servicing schedules.

Understanding what the builder’s subcontractors’ responsibilities are within the initial Defect Liability Period (DLP) is crucial when finalising the first 12 month budget and ensuring the needs of the building match the budget being ratified at the Inaugural General Meeting.

Some of the items which need to be discussed include:
• Wet and dry fire servicing
• Hydraulic, pump, landscaping, lift and chute maintenance
• Insurance
• Gym equipment/licensing
• Garage and entry door servicing

Once all parties have a clear understanding of the building’s needs in the first 12 months, the manager’s attention turns to assisting the developer and their legal team with settlements – inaugural general meetings, certificates, the establishment of the bank account, etc., which all need to be professionally managed to ensure a smooth transition from developer to the purchaser.

Once settlements take place the manager will need to build a relationship with the new stakeholders. This may have commenced during pre-settlement functions or events (which Tideways co-hosts with the settlement/marketing team). If not, then a Special General Meeting following move-ins is the ideal time to put faces to names and explain what an OC is, how the budget was crafted, answer any questions and introduce our third party (post DLP) contractors to the ownership group.

Having a professional strata manager build a relationship with the owners, showcasing that the Owners Corporation has been a considered part of the development journey is one of the best ways a developer can leave their mark on a project.

Ultimately, the strata management team nurtures this relationship well after the builder, consultants, and developer have moved on.

Why would you hand your project’s legacy to just any strata management company? Take the time to ensure it’s one that will do your vision justice.

To discuss your upcoming development and how Tideways can provide your purchasers with added confidence and reassurance, please don’t hesitate to reach out.

Article featured in The Monark Minute and written by Bryan Phillips, Director, Tideways.