If you own a strata-titled property, you may be wondering whether it’s possible to handle your own strata management or if you should hire a professional strata management company. Let’s explore the differences between these two approaches and what they entail.
What is Strata Management?
Strata management is the process of managing multi-unit developments such as apartments, townhouses, or commercial buildings where individual units are owned privately, but common areas like hallways, gardens, and parking are shared. Owners of these units hold a strata title, which includes ownership of the unit and shared responsibility for common property.
A strata management company, along with the Council of the Strata Company, oversees the upkeep of shared areas within a strata-titled property. The council, elected from the owners, makes key decisions on behalf of the owners, while the strata management company assists in executing those decisions, ensuring that necessary repairs and improvements are made. Strata management also involves enforcing by-laws, collecting levies, and managing finances and insurance. These responsibilities are governed by the Strata Titles Act 1985 (WA) and the by-laws specific to the strata scheme.
Can You Manage Your Own Strata Property?
Yes, self-management is an option, and many smaller strata properties in Australia choose to manage their own affairs. However, it requires a solid understanding of both the legal and administrative responsibilities involved. While self-management can be cost-effective, it can also be time-consuming and challenging, especially for larger complexes.
Responsibilities of Self-Management
Managing your own strata property means taking on the tasks typically handled by a professional strata management company. These include:
- Handling and paying for maintenance of common property
- Chairing and conducting meetings
- Selecting and maintaining insurance policies
- Managing the strata company’s finances, including preparing budgets and monitoring levies
- Keeping records and documentation up to date
- Enforcing by-laws and resolving disputes
It is important to remember that a strata company is a legal entity, and as such, all owners are collectively responsible for complying with the Strata Titles Act 1985 (WA). This includes ensuring the building is adequately insured, common areas are maintained, and any necessary funds are raised through levies.
The Risks of Self-Management
Self-managing a strata property can come with risks. Without proper oversight, disputes between owners can arise, particularly if maintenance or financial responsibilities are neglected. The most common risks include:
- Disputes
A lack of clear leadership and proper by-law enforcement can lead to disagreements among owners. - Devaluation
Poorly managed properties may suffer from insufficient funds for maintenance, leading to a decline in the value of the property. - Financial Issues
If levies are not collected and budgets are not properly managed, the strata scheme may find itself in financial difficulty. - Tribunal Involvement
Disputes that escalate may end up being resolved by legal tribunals, which can be costly and time-consuming.
Benefits of Professional Strata Management
While it is possible to self-manage your strata property, engaging a professional strata management company offers several benefits, especially for larger or more complex developments. A strata management company can:
- Ensure that the property is well-maintained and that maintenance tasks are addressed in a timely manner
- Provide expert knowledge of the legal obligations under the Strata Titles Act 1985 (WA) and ensure compliance with all regulations
- Manage budgets, levies, and finances efficiently
- Resolve disputes between owners impartially and in accordance with by-laws
- Free up time and reduce stress for owners, who may lack the expertise or time to manage the property effectively
How Difficult is it to Self-Manage Strata?
Self-management is not impossible, but it requires dedication and a clear understanding of the responsibilities involved. The easiest way to approach it is to think of your strata company as a business that must comply with regulations, maintain financial records, and handle routine maintenance. There are software tools available that can help simplify tasks like accounting and meeting management, and there are plenty of online resources that provide guidance on self-management.
Legal Requirements for Strata Management
Strata management is subject to legal oversight, and there are specific rules that all strata companies must follow, including:
- Strata Titles Act 1985 (WA) legislation which sets out the rights and responsibilities of owners and strata companies, as well as how strata properties must be managed.
- Each strata property has its own set of by-laws that owners and occupants must adhere to. These by-laws cover the use of common property, noise control, and other matters specific to the scheme.
- All strata properties must be insured adequately to cover both the building itself and public liability for common areas.
- Strata companies must prepare financial statements, collect levies, and ensure funds are available for maintenance and future repairs.
Choosing Between Strata Management and Self-Management
The decision to self-manage your strata property or hire a strata management company depends on the size and complexity of your property, as well as the willingness and expertise of the owners. While smaller properties with fewer owners may find self-management feasible, larger complexes often benefit from professional strata management services that ensure compliance with legal obligations, financial stability, and proper maintenance of common property.
If you are considering self-management, be prepared for the time commitment and legal responsibilities that come with it. Alternatively, if you want to avoid potential risks and ensure the smooth running of your strata property, professional strata management may be the better option.
To learn more about how we can help you with strata management services, or if you’re considering transitioning from self-management, contact the team at ESM Strata today. We’re here to provide expert advice and support tailored to your property’s needs.
