Understanding the role of various stakeholders in Strata Title Buildings

Description: this article identifies the various stakeholders and outlines their varying interests in the Strata space

Strata title in NSW is typically the creation of a small community which although variant is size can be as much about managing persons as it can be about managing an asset. Distinguishing and managing the needs of the various stakeholders and professional interests in an asset is ‘key’ to developing and enhancing the operational efficiency of an asset.

Before this can be achieved, it is important to clearly understand the role and responsibility of the various stakeholders. This may include:

The Strata Manager

A strata manager is the licensed secretary for the asset/strata plan. The strata manager (also referred to as managing agent or body corporate manager, works at the direction of the Owners Corporation. Their function typically includes:

• Accounting and financial reporting
• Levy Collection, and invoice payment
• Communication with various stakeholders
• Enforcement of rules/by laws
• Issue of notices, orders and certificates
• Meeting preparation
• General Secretarial duties.

The Facilities or Building Manager (Also known as Caretaker)

The facilities manager controls, organises and coordinates the strategic and operational approach to the overall management of buildings and facilities in order to ensure the proper and efficient operation of all physic aspects, creating and sustaining safe, productive and efficient environments for all stakeholders.

The Property Developer

In most cases, the property developer will form the initial owner of the property. This ownership however will not usually continue for long into the properties operational lifecycle. As lots in a plan are sold, each new owner becomes a member of the body known as the owner’s corporation. This usually ensures the property developer interests are continuing to diminish. During the transition of ownership, the property developer assumes liability of building workmanship which may be passed to owners or service contractors. It is important to clearly understand the role of the developer when assessing purchasing options.

The Owners Corporation or Body Corporate

All lot owners in a strata scheme are party to the entire body of owners known as the Owners Corporation (OC) or Body Corporate. This body takes responsibility for all decisions affecting the OC, the property’s assets and the common property. In addition the Owners Corporation is a legal entity and as such forms the decision making body for a strata scheme. Typically, an Owner’s Corporation delegates its powers and functions to an Executive Committee providing them with the authority and charter to make the majority of decisions on behalf of the OC between annual or general meetings.

The Executive Committee

An Executive Committee (EC) is made up of members elected at an annual general meeting. They are provided with the authority to act on behalf of all owners in the management of common property and shared services through collective decision makings. They also share some responsibility for administrative and financial aspects of the asset.

The Resident

These are individuals who form an interest in a property and make up the basis of a local community. These may be either lease holders or owners.

Service Providers

External service providers are a critical part of the operations lifecycle of an asset. Typically these may include:

• Building Trades (Electrician/Plumbers)
• Lawyers
• Planners
• Valuers
• Insurers
• Auditors
• Architects

As these subject matter experts are a necessity for the operational efficiency in any asset, it is imperative that they are selected and screened for optimal output.

Summary

Whilst it is abundantly clear that all these stakeholders have a variety of interests in an asset, clear governance and demarcation of responsibilities is paramount to ensure the interests of the end user are maintained.