30/11/2011 - 10:48

Government option to license strata managers

30/11/2011 - 10:48

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Government option to license strata managers

The state government has moved to regulate the increasingly complex role of strata property managers and enhance protections for the growing number of strata property owners.

The push coincides with the establishment of Western Australia’s Private Landlords Advisory Bureau, a website aimed at helping landlords to manage rental properties. 

The role of strata managers is not regulated despite their being responsible for administering strata councils formed by unit owners within a commercial or residential complex.

The state government is running a four-month consultation period to seek views on licensing strata managers.

It has proposed three options: the introduction of a strata management licence, regulation without licensing and maintaining the status quo.

There is little clarity around the number of complaints in WA regarding poor strata management, but issues most commonly relate to low levels of financial management, poor reporting on trust accounts, property maintenance and issues with obtaining authority to act on strata council decisions.

With the number of strata lots growing by 10,000 a year in WA, strata unit numbers are projected to grow by 119,000 between 2010 and 2020 taking the total forecast number to 350,000.

Industry insiders say this growth highlights the need for regulation in strata management.

Strata Community Australia WA president Ida Smithwick has been pushing for licensing requirements to be introduced for strata managers for 20 years and took the issue to former Labor premier Geoff Gallop when he was in office.

“That all fell over so here we are again and I think it is the perfect opportunity to try and push it through,” Ms Smithwick said.

Maintaining the status quo is simply not an option, according to Ms Smithwick, nor is regulation without licensing.

“The only way I see that happening is by writing the strata manager’s position into the Strata Titles Act. Then again, the government would have to be able to supervise that. The only way I see it working is through licensing,” she said.

Ms Smithwick said strata management used to just require management of bills and levies.

But increased involvement in funds management, complex issues around common land, strata levies, trust accounts, administrative issues with ‘sinking funds’ and understanding bylaws is now an important part of the strata management role.

“The only way they are going to learn what is required of them is by being educated and getting a licence,” she said.

With increasing numbers of mixed-use commercial and residential strata developments, Real Estate Institute of WA chief executive Anne Arnold said the issues in managing stratas would become increasingly complex.

 “It would seem that if new legislation goes through and those sorts of developments occur, there will be a different class of strata manager who will be required to provide management services to those complex stratas,” Ms Arnold said.

“It is just going to become more and more complex and regulation then becomes really critical.”

Ms Arnold said that a level playing field between real estate agents and amateurs was required.

“If agents, to conduct their business and take money from consumers, must have a trust account to put those funds into then it seems to me very sensible that strata managers should have to have a trust account for the money they receive.”

While strata management licensing aims to protect strata property owners, the recently established Private Landlords Advisory Bureau was set up by Zoran Tomich to protect the interests of private property owners administering rental agreements.

In the property industry for 15 years, Mr Tomich said there was much frustration among private landlords and aimed to assist them in complying with the requirements in the Residential Tenancies Act and to help them avoid having to settle disputes in court.

Mr Tomich said the number of disputes had risen from 11,500 in 2009 to nearly 14,000 this year – the highest in the country.

“At times, the relationships between landlord and tenant can be very adversarial and my view is it shouldn’t be and it doesn’t need to be,” he said.

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