Retention of Licensing Leaves Strata Owners in Good Hands 11/05/2009 The decision has taken a year to be reached but it’s a pronouncement that will leave up to 1.5 million NSW strata property owners in safer hands.
At issue was a review to determine the worthiness of retaining the current licensing of Strata Managing Agents, the removal of which could have seen the owners of strata titled properties throughout NSW miss out on the umbrella of financial protection afforded by a fidelity fund.
Officially called the Property Services Council Compensation Fund, it provides important protection for consumers, and is part of a package of benefits that flow from agent licensing.
Many people may not be aware of the fact that NSW is only one of two states that require the licensing of Strata Property Managers. The other is the Northern Territory.
Mr Richard Tooker, the director of New South Wales Strata Management says the review of the Property, Stock and Business Agents Act 2002 (the PSBA Act) which began in May 2008 and ended in May 2009, has reached a decision to retain licensing, noting that this can provide important security to property owners and has wide ranging implications.
At its conclusion the study found that whilst the costs of licensing Strata Property Managers were small, the benefits to owners were large, and covered much more than the single issue of protecting the money set aside by property owners for the ongoing maintenance of their buildings.
“NSW has been a leading advocate of such licensing, and one of the results from the extensive study now completed may see the adoption of a national scheme based on the New South Wales system, as the benefits to consumers have been found to be fairly wide ranging.”
Mr Tooker says NSW has the largest number of strata schemes so has been well placed to be an industry leader in this field. New South Wales, he says, also has what are the most complex titling schemes, and wears the added responsibility of holding in trust on behalf of the owners the largest amount of money. These trust funds currently receive consumer protection from the fidelity fund, a safeguard that would have been lost without continued licensing.
The assessment of the PSBA act concluded, “By restricting practice in the industry to qualified and competent people, licensing reduces the risk of poor management negatively impacting subsequent owners of lots in a strata scheme and the owners and residents of neighbouring properties”.
Mr Tooker puts this in more simple terms. “Owners of strata titled property pool their money as now required by law into what are called sinking funds, but amazing as it may seem, too few states require adequate protection that safeguards these funds from misuse or fraud.”
Under current licensing provisions, NSW Strata Managers can be fined heavily for failure. Mr Tooker notes that even the failure to supervise staff can carry a penalty of up to $22,000 for the management company.
“Strata property owners receive, through the current system, genuine benefits, not the least of which safeguards their pooled funds, which today, can easily run into many many thousands of dollars. This is why the NSW system may well be adopted nationwide in the not too distant future.”
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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