Bad press for strata managers shines light on strata costs and service

Whether you’re a renter, owner-occupier or investor, property is very costly.

Interest rates, which were kept on hold on Tuesday (7 May), are just one factor. The systemic undersupply of homes to buy and rent is the major contributor to unaffordability.

Another cost which has recently been elevated in the public conscious is strata management.

Ever since an ABC News report revealing the alleged unethical practices of a particular strata management company, many strata managers have contacted REINSW expressing their concerns.

They want to ensure they are performing all their responsibilities correctly and compliantly.

REINSW has responded with educational resources covering strata managers’ obligations, including disclosure and consent.

We’ve developed agency agreements that walk both the consumer and the managing agent through the formation of the strata management relationship in the simplest of terms. We offer strata managers access to professional advice in relation to their insurance-related questions, to protect them as well as their customers.

It’s an obvious point that needs to be re-stated: the majority of strata managers do a great job and add significant value to the customers they serve. Body corporates rely on these agents for efficiency, clarity and compliance. Strata fees are high and apartment owners, and those that represent them, deserve value for money.

It’s unfair to tar all strata managers with the same brush. But the reports of alleged kickbacks, contracts being awarded to companies owned by the strata manager, a lack of accountability and other dubious practices have given the industry a bad name.

Real estate training falls short

It comes back to competence and this starts with education.

All property transactions are complex, involving large amounts of money, which means the people at the heart of handling these transactions should be highly competent, educated and trained. Unfortunately, the industry’s education and training standards are woefully inadequate.

There is a plethora of training providers promising cheaper and faster ways for people to become qualified to work in real estate, including in strata. The notion that a person can take a shortcut to a career in which they will be involved in complex transactions, involving large sums of money is inviting disaster.

If Government is serious about improving consumer outcomes when it comes to property, it must step up and ensure people are trained and educated in the right way.

Higher quality standards should apply to training providers. Would-be agents should be required to pass an exam that tests their acquired knowledge.

Government is prioritising the punishment of incompetence. It should prioritise competence instead.