27/07/2004 - 22:00

Strata report action urged

27/07/2004 - 22:00

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Industry players are concerned at the lack of progress in efforts to tighten controls over strata management.

Strata report action urged

Industry players are concerned at the lack of progress in efforts to tighten controls over strata management.

A report on a Government inquiry into the State’s strata management industry was released 12 months ago. At the time, Consumer and Employment Protection Minister John Kobelke said the Government proposed to engage in further industry and public consultation before deciding whether to implement the committee’s recommendations.

Despite this, some in the industry claim there has been no industry or public consultation since the Economics and Industry Standing Committee tabled its final report June 26 2003.

Among the report’s recommendations were: the introduction of a classification system for strata schemes; licensing requirements for strata managers; necessary provision of information to strata property owners; funds to be held in a financial institution; and annual auditing and uniform financial reporting.

Mr Kobelke said no concerns had been raised with his office over the rate of progress with strata management reforms.

“The Departments of Land Information and Consumer and Employment Protection (DOLI and DOCEP) have been doing some work on the matter,” he said.

“Reforms in strata management are not a major priority and there is no evidence of consumers being at serious or imminent risk.”

President of the strata titles institute of Western Australia, Mark Atkinson, agreed that there was no crisis or suggestion of widespread fraud within the strata management industry.

“However, there is a potential for infiltration by people who should not be looking after others’ money,” he said.

According to the Economics and Industry Standing Committee, up to $25 million is held by 121 strata managers in Western Australia.

In addition, the report concludes the number of strata properties is increasing and that the size and complexity of strata title schemes are also on the rise, leading to growth in the funds and therefore a growth in risk for strata title property owners.

Mr Atkinson said these conclusions demonstrated the need for funds held by strata companies to be more closely examined.

“There needs to be greater control in terms of auditing or having regular bank statements going to proprietors,” he said.

“Strata companies sometimes have large surpluses, and some managers even combine the funds from several strata schemes in accounts in their names.

“We want the promised consultation to go ahead and we want the chance to speak to government about adopting the recommendations they made.”

Property Council senior policy adviser Geoff Cooper said the issue needed reform and that the Property Council would be raising the issue with major parties before the State election.

“There has been a period of inaction following the committee’s report, and in order to meet the continuing needs of strata property owners, it would be of benefit for parties to take action,” he said.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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