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No change on strata licensing

DESPITE repeated calls by the property industry to regulate the strata title management sector in Western Australia, a review of the sector commissioned by the state government has found no grounds to license strata managers. A strata title property is a development with individual strata lots and shared facilities or ‘common property’. While most of the smaller schemes, typically less than four lots, conduct their own affairs, many of the larger strata schemes use managers to look after the property. Currently, anyone can become a strata manager without any formal training or qualifications. The recent Review of Proposed Licensing/Regulation of Strata Title Managers Report, recommended the Strata Titles Act be amended to require that strata title managers hold adequate professional indemnity insurance, and that all strata company funds be held under their management in a trust account. It also recommended a review of the Strata Title Institute of Western Australia’s accreditation program to ensure best practice training and education and the launch of a consumer education campaign by the government. STIWA president Jacky Courtney said the report had missed a real opportunity to propose regulating the industry. “While we recognise that there have been no major fraud cases to date relating to strata management, we believe that it would be in the interests of consumer protection to introduce some form of licensing,” she said. Ms Courtney said the recommendation that all strata managers have professional indemnity insurance may go some way to weeding out any ‘fly-by-night’ managers, since most insurers would not provide cover unless the person had relevant industry experience or training. Nationally, the strata title industry operates under a variety of state-based systems, with only New South Wales and the Northern Territory enforcing a licensing system for strata managers. Victoria is introducing registration at the end of 2007. In not recommending licensing, the WA report cited a lack of evidence of market failure and the prohibitive cost of establishing such a regime for strata management companies and individuals and the flow on burden of costs to lot proprietors. Jenelle Carter

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