3 Mistakes You Should Avoid Making When Drafting a Strata Management Contract

Has your strata community agreed to hire a strata manager? Read on and discover some of the crucial mistakes that you should avoid making as your strata community negotiates a contract with a prospective strata manager.

Powers of Delegation

One of the reasons why a strata community may decide to hire a strata manager is that strata title owners would like someone to be in charge of attending to the daily tasks of maintaining the properties in that community. It would therefore be counterproductive if you accepted to include a clause that allows the strata manager to delegate any of his or her duties or powers to another entity. Such delegation can make it hard to protect sensitive information, such as financial details of strata community members, in case third parties participate in performing the functions of the strata manager.

Authorisation to Decide Restricted Issues

You should also never draft a strata management contract that gives the strata title manager the power to make a decision on issues that are regarded as restricted. For instance, you should not give him or her power to decide what kind of extensions can be built on strata units. The assembly of strata title owners should make such decisions. The manager can then implement the decision made by the owners. Such a precaution is necessary in order to retain control over the strata properties at all times. It also helps to ensure that the strata manager remains impartial at all times.

Power to Determine Levies

It is also not advisable to draft a strata management contract that permits the strata title manager to set the different levies that the members of the community should remit in order to maintain the common property. That prerogative should remain with the strata owners. This will ensure that the properties are maintained without putting a huge financial burden on the owners. It also ensures that the properties will be maintained to the standards that the members desire. As already stated, the manager's role should be to implement the decisions of his or her employers.

It may be prudent for you to refer to other strata management contracts as you consider which provisions you should include or exclude from the contract that you are drafting for your new strata manager. You could also consult an attorney and ask them to draft a contract that addresses your needs as strata community members. Such professionals will save you from making costly mistakes that can jeopardise the harmonious relationship between the strata manager and the title owners.