Ask These 7 Questions When Signing a Strata Agreement

A strata management agreement defines the rights and responsibilities of owners and residents in a strata property. Understanding its terms is essential to avoid unexpected costs, disputes, or restrictions that may affect your investment or lifestyle.

When signing a strata agreement, focus on key areas such as fees, maintenance responsibilities, dispute resolution processes, and any restrictions on renovating or leasing.

To support your due diligence when signing a strata agreement, we’ve compiled a list of essential questions to help safeguard your interests and ensure peace of mind.

How to Understand Your Strata Agreement

When signing a strata management agreement, it’s crucial to understand its terms and how they affect your owners corporation. This contract defines the strata management company's responsibilities, ensuring the efficient operation and upkeep of the strata complex.

A strata management agreement covers things like:

Financial Management: Budgeting, levy collection, and financial reporting.
Maintenance and Repairs: Oversight of common property upkeep, including scheduling repairs and managing contractor services.
Owner Communication: Handling resident disputes and acting as a point of contact for owners, tenants, and the owners corporation.
Regulatory Compliance: Ensuring the strata scheme adheres to local strata laws.
Meeting Facilitation: Organising strata meetings and recording minutes.
Insurance: Managing strata insurance policies and claims.

Common clauses to look out for

When signing a strata management agreement, pay close attention to:

Termination Clauses: The notice period required to terminate the contract and any conditions for early termination and associated fees.
Fees and Billing: Check for the breakdown of fees (base management fee, any insurance commissions, levy collection fee, administrative charges, etc.).
Service Scope: Clarify the extent of decision-making power and a defined list of services included (financial management, maintenance coordination, administrative tasks, etc.)

Dispute Resolution: Understand the internal dispute resolution process within the strata management company and the procedures for escalating disputes.

Differences between a strata manager and a strata company agreement

Whether you're a tenant or landlord, understanding the difference is crucial for smooth dealings and setting the right expectations from the start:

Strata Manager Agreement: A contract between the owners corporation and an appointed strata manager responsible for day-to-day operations and compliance.
Strata Company Agreement: A broader legal framework governing the management of the strata scheme, which may include agreements with external service providers.

Questions to Ask When Signing a Strata Agreement

Knowing the right questions to ask when signing a strata agreement can protect your investment and help ensure a smooth process.

1.What do the Fees & Costs Look Like?

Management fees typically cover the day-to-day operations of the strata scheme, such as financial management, maintenance coordination, and administrative duties.
Be sure to ask about any extra costs, such as charges for emergency repairs, legal fees, or special levies. These may not be included in the standard management fee and can add up unexpectedly.

Management fees are usually reviewed annually and may increase based on factors like inflation, rising operational costs, or changes in service requirements. It's crucial to understand the review process and any limits on fee increases.

2.What Responsibilities Does the Strata Manager Have?

Strata managers are responsible for managing the affairs of all unit owners in a strata complex and any matters relating to the common property. They play a key role in maintaining the physical building and common areas of a strata complex, as well as acting as the first point of contact for residents, handling inquiries and disputes, and ensuring compliance with the strata rules and regulations.

Here are the key responsibilities of a strata manager:

Financial management
Organising insurance and managing claims
Maintenance and repairs
Communicating and liaising with owners
Dispute resolution
Ensuring legal compliance

Essentially, strata managers act as administrators for the owners corporation to keep the strata complex running smoothly.

3.Are Emergency Repairs Included and How Are They Handled?

Some strata managers offer 24/7 emergency support, while others may charge extra for urgent maintenance requests. It’s important to clarify how after-hours issues are managed and whether there are additional fees for emergency repairs. It's important to confirm whether they have preferred contractors for emergency work and if these contractors are available after hours.

4.How Often Will Financial Reports and Budgets Be Provided?

Strata managers should provide regular financial statements to the strata committee. Make sure you know how often these reports will be issued (whether monthly, quarterly, or annually), and whether they will be available online for easy access and review.

5.Strong Compliance & Legal Knowledge Questions to Ask

Your strata manager must stay up to date with changes in 2025 strata laws, which will include new sustainability requirements and insurance obligations.

Ask your strata manager the following questions to ensure they have a strong understanding of legal compliance:

How do you ensure compliance with state strata laws?
What happens if there are disputes between owners?
How do you manage legislative changes that impact the strata scheme?

6.Communication and Transparency Questions to Ask

Ask these questions to help you understand the manager's approach to communicating and addressing issues promptly:

How often will the strata manager communicate with the committee and owners?
What technology or software is used to ensure transparency and provide document access?
How are complaints and concerns handled?

7.Contract Terms and Termination

When signing a strata management agreement, it's important to understand the contract terms and potential exit strategies. Ask the following questions to help you understand the duration of the agreement and any penalties for early termination:

What is the length of the contract?
What are the termination clauses?
Are there penalties for ending the agreement early?

Do You Have Strata Insurance Yet?

Flex are strata insurance experts, offering flexible protection while ensuring compliance with state strata regulations. With deep industry knowledge, Flex provides tailored policies to match the unique needs of your strata scheme, whether it’s a small duplex or a high-rise complex.

Flex Insurance allows you to customise your coverage with optional inclusions, ensuring you only pay for what you need. Plus, with 24/7 emergency assistance and a streamlined claims process, you’ll have reliable support whenever you need it.

Frequently Asked Questions

What questions should I ask a strata manager?

Ask about management fees, service inclusions, emergency repair handling, compliance with strata laws, financial reporting frequency, and dispute resolution processes.

How to choose a good strata manager?

Look for a licensed professional with strong industry experience, transparent communication, reliable financial management, and a proven track record in maintaining strata properties effectively.

What are the obligations of a strata manager?

A strata manager is responsible for financial management, maintenance coordination, dispute resolution, compliance with strata laws, and ensuring smooth communication between owners and residents.

How do you terminate a strata management agreement?

Review the termination clauses in your strata management agreement, provide the required notice, and ensure compliance with legal and contractual obligations before appointing a new manager.

Contact Flex Insurance for Tailored Strata Insurance Solutions

For tailored strata insurance solutions and expert advice, contact Flex Insurance today.