Strata Owners Protected by Consumer Fidelity Fund 18/12/2008 Many owners of strata titled property in NSW would not be aware that they benefit from a degree of consumer protection lacking to owners in other states.
Due to an anomaly, NSW is the only state that requires Strata Managers to be licensed, a requirement that sees clients protected under the Property Services Council Compensation Fund. This protection (a fidelity fund) is important as it remains a stalwart and important guard against fraudulent misuse of trust funds.
Mr Richard Tooker, the director of New South Wales Strata Management, says that most people know that a strata building’s Owner’s Corporation conducts periodic levies. “These pooled trust funds are put aside for ongoing maintenance and as a hedge against future needs of the building.”
Commonly known as sinking funds, he says this pool of money must now extend forward some ten years and amounts to considerable sums, often many tens of thousands of dollars, and often extending into the hundreds of thousands.
“Amazing as it may seem, the other states of Australia do not require their Strata Managers to be licensed. New South Wales appears to be well ahead of the pack in this regard and consumers are the beneficiary.”
Mr Tooker says that without such protection an Owner’s Corporation which is required by law to establish future funding programmes can see their funds open to fraudulent behaviour that could result in these savings being plundered as they are not operating under the protection of a fidelity fund.
He says another consumer benefit of the licensing regime is that to gain and hold a license requires the maintenance of a high standard of professionalism, a stipulation that keeps ‘cowboys’ out of the industry.
The licensing of Strata Managers was one of the issues under recent review by NSW Trade Licensing, assisted by the Business Regulation and Competition Working Group, to analyse whether continued licensing is necessary. A change could see consumers loose their protection if licensing is suspended. To date the issue has yet to be resolved.
“Owners have voiced concerns about the role of property developers who have at times used proxy votes to influence the decisions made by Owner’s Corporations at annual general meetings. However NSW Property Managers, working in line with recent amendments to the Strata Schemes Management Act that seek to restrict the involvement of developers and their associates, are helping to address many of these concerns.”
Mr Tooker says that under the licensing provisions NSW Strata Managers can be fined heavily for a failure to perform professionally. “Yes, indeed, for example a mere failure to adequately supervise staff can carry a penalty of up to $22,000.”
The technical knowledge required of NSW Strata Managers he says is also an important factor. In addition to knowledge of The Strata Schemes Management Act 1996, a Strata Manager must have a working knowledge of The Community Land Management Act 1989, The Property, Stock & Business Agents Act 2002, Occupational Health & Safety Ace 2000 and the Home Building Act 1989.
Mr Tooker says that an Owners’ Corporations finding that it needs help with compliance issues can contact New South Wales Strata Management on 9890 1841 to enquire about professional assistance.
New South Wales Strata Management (formerly Gilmour Strata Management) commenced business in early 1991, as a member of the highly respected J A Gilmour & Sons group of companies. Licensed solely and specialising only in strata management services, the company has steadily grown to become one of the largest such organisations in New South Wales.
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