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Written by Jamie Horner
Strata management fees can be confusing to navigate. There’s no industry standard—and they come in all different shapes and sizes, with additional fees clearly stacked on top…or buried under layers of fine print. Fees are a necessary evil: if you want good strata management, you need to be prepared to pay for it…because, like with most things in life, strata management is a case of “you get what you pay for”. Look at what is included in the fees, and make sure you shop around.
To take a bit of the confusion out of your research, we’re going to examine the most common fee structures in Perth strata management, and which of these, in our experience, offers the most value.
The tables below list the average management fee of each structure per lot, per annum. These figures are general estimates, accurate at time of writing and not final numbers. For a quote on Empire’s fees, contact us today
Small schemes < 5 lots; Medium 6-30; Large 30+
There are three main classifications that we see Western Australian strata fee structures fall into:
An easy way to remember the definition of this one is “Management Fee Plus…literally everything other than the basics items are plus.” With the Management Fee Plus structure, you’re paying the management fee plus a host of other items such as insurance claims, every phone call, email, and invoice in between. Under this fee structure the amount you pay per month can vary considerably with the ‘plus’ costs’. Its important to understand under this fee structure the amount you pay as a fee will vary considerably each month and can be over an annual period another 20% to 40% more.
With the Simple Fee structure, the key items / expenses are highlighted and broken down. This management fee details the Annual General Meeting fee and general administration charges, which includes phone calls, emails etc but additional charges will be incurred for items above the standard. The monthly fee in this case will be standard except for the month with that the Annual General Meeting occurs. The exceptions in this scheme include additional (extra-ordinary) meetings, large or major works, court tribunal, or matters that extend beyond the normal strata management requirements.
The name is pretty self-explanatory. The All-Inclusive fee structure is one set fee charged monthly and usually includes Annual General Meeting attendance, correspondence, financials, administration, and practically everything your strata manager does to fulfill their duties. Every phone call, every email, or action on behalf of the scheme is covered within the management fee. Whilst deemed an all-inclusive this fee will have limitations such as (extra-ordinary) meetings, large or major works, court tribunal, or matters that extend beyond the normal strata management requirements.
The figure seems intimidating initially, as it’s the largest up front, per lot / per annum of all the fee structures.
At Empire, we work within the fully all-inclusive and simple fee structure, because we find that this offers Owners consistency, budgeting foresight and the best value for our clients, hands down.
Strata Fee Examples
The three tiers are each very differently structured, with different levels of service falling under the umbrella of ‘Management Fee’, and other additional services incurring extra charges. These charges can and will add up, so it’s important to remember that although a fee structure may seem the cheapest up front, you could end up paying substantially more in the long run. Allow us to illustrate: we’re basing the below data on a medium, 12 lot strata scheme here in Victoria Park, where Empire Estate Agents is located. The figures contained in the table are current estimates only.
See how quickly the cheapest option becomes the most expensive? Look beyond the management fee and upfront costs.
Contract details & guarantees
In addition to selecting the best value fee structure (which in our experience is simple or all-inclusive), it is important to look for a no-lock-in contract. This allows you the freedom to leave if the management is not living up to expectation, but also layers on some added pressure for the management company to deliver on those promises. We also can’t stress enough the importance of checking invoices, and asking questions—if something seems off, or excessively expensive, follow it up. After all, it’s your money.
Its also imperative to use a Licensed Real Estate agent as they are licensed, trained, audited and have fidelity fund backing, want to know more? Here is a link to the importance of a licensed real estate agent as your Strata Manager. Empire Estate Agents operate within a simple or fully all-inclusive fee structure, depending on the preference of the strata company. It is because we operate within this structure that our strata clients know they can contact us for any matter, at any time, without the concern of incurring unnecessary costs.
We’ll only charge additional fees for duties that are well above the norm – i.e. court tribunal preparation and major strata project planning/refurbishment (if a strata council owner is unable to act). We consider it to be the only viable fee structure that allows us to effectively act on behalf of our client’s best interests.
Empire believes it sets a precedent, and expectations for a high standard of performance; with clear parameters and structures set in place to guarantee you get what you’re paying for, with the peace of mind also that if one lot owner or resident is taking up a considerable amount of communication, it won't come at the expense of the strata companies funds. If you want to know more about the criteria you should follow when in the market for new strata management, give us a call.
For more information, or to see how we do strata different at Empire Estate Agents, talk to our team today. Call and speak to Jamie on (08) 9262 0400 or drop her an email on jhorner@empireestateagents.com
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