Why engage a strata manager early in the development process?

Engaging an experienced strata manager early in the development process, even before the Development Application (DA) stage, is invaluable. Involving a reputable strata manager with firsthand experience in managing similar developments offers crucial insights that contribute to the successful establishment of a strata scheme, enhance the client experience, and provide a strong platform for a thriving strata community.

In this article, we’ll explore the key benefits of having an experienced strata manager in your corner from the get-go, and how their knowledge and advice could help you transform your development.

Titling advice

Strata managers with high levels of BMC management experience offer valuable perspectives on creating effective titling structures for mixed-use and complex schemes. Their expertise can assist in establishing clear title separations to ensure operational autonomy across different uses, clearly delineating shared areas and services, and preventing potential conflicts. This foresight is crucial for maintaining harmony and efficient building operation upon completion.

Their hands-on experience provides unique management insights into community and stratum development titling, optimal owners corporation sizes, and the staging of developments. This perspective complements the advice from development lawyers, strata surveyors, planners, and architects, who will not have the management experience post-completion.

For more vanilla residential schemes, strata managers contribute by reviewing delineations and details on draft strata plans or within by-laws. These will assist define the liabilities and responsibilities of owners corporations or lot owners, setting the stage for a greater understanding of ownership and smoother operations and management.

Review of DA and construction plans

Strata managers continually receive direct feedback on building areas needing maintenance, causing owner issues, or hindering operations. This makes them invaluable resources for reviewing development and construction plans. They offer practical insights into design considerations for crucial areas such as building entries, communal spaces, amenities, security measures, mail and parcel delivery systems, vehicular access, visitor parking, landscaping, waste management, and utility metering, among others. Leveraging their expertise ensures that potential operational challenges are addressed early in the design process, enhancing the functionality and sustainability of the development.

Strata documents for sales contracts

In the lead-up to a project launch, developers coordinate with strata lawyers, conveyancers, and surveyors to draft essential documents for inclusion in sales contracts. To minimise the risk of rescission before project completion, it’s crucial to avoid substantive changes to these documents. Experienced strata managers play a vital role at this stage, reviewing and advising on key documents such as the strata plan, by-laws, strata management statements, and schedules for shared facilities. Early engagement with a strata manager ensures that their recommendations can be integrated into sales contract documentation, resulting in only minor adjustments before the final submission of strata scheme documents for registration as the project nears completion.

Service contractor engagement

Seeking advice for on-site service requirements from those who will manage them upon completion is invaluable. Experienced strata managers draw from a diverse portfolio of live schemes to advise on appropriate servicing requirements. Whether it’s hiring a full or part-time facilities manager, concierge, security personnel, cleaner or landscaper, they provide tailored recommendations based on the development and target clientele.

Strata managers can also assist in drafting tender documents and managing the procurement process for required service providers. Early engagement allows for the appointment of key service providers, the most crucial being facilities managers, who will collaborate with the development team and strata manager. They will then assist with the engagement of other services such as concierge, security, cleaning, and landscaping.

Running tenders early for onsite services enables their involvement and input throughout the construction phase and provides actual costs for initial budget estimates.

Budgeting and levy estimates

Accurate levy forecasting, based on site-specific information, prior to a sales launch is essential for informing buyers with realistic levy estimates. Engaging a strata manager for this purpose ensures that your sales team are properly equipped and buyers are appropriately informed.

While there may be changes to estimates over the duration of the project and construction details are finalised, these can be updated for the sales team to provide to buyers. This proactive approach prevents buyers from experiencing levy shock upon project completion. Steep levy increases above initial sales estimates can lead to heated and fractious general meetings, highlighting the importance of engaging a reputable strata manager early in the development prior to a market launch to avoid such issues.

Initial maintenance plans and handover documents

A crucial requirement for strata schemes is the preparation of an ‘Initial Maintenance Plan’ and a comprehensive set of handover documents. These documents must be submitted 14 days prior to the First Annual General Meeting. The initial maintenance plan plays a vital role in informing budget and levy estimates, as it is required for the budget and levy estimates presented at the First Annual General Meeting.

For detailed requirements regarding an ‘Initial Maintenance Plan’, refer to our previous article. These documents are essential for the effective management and maintenance of the strata scheme, ensuring a smooth transition and informed decision-making at the outset.

Insurance requirements and placement

As completion approaches, it’s crucial to provide a replacement cost valuation for your strata managing agent to obtain insurance quotations. For stratum (BMC) developments, this valuation must be broken down for each stratum lot. An experienced strata manager can outline the insurance requirements under strata legislation and help with any declarations needed by the nominated broker to secure competitive quotations. It’s actually a legislative requirement to obtain at least three quotations from underwriters to ensure comprehensive coverage at competitive rates.

Completions and settlement

Assuming there has been prior engagement with a professional strata managing agent, the details required for the strata scheme establishment will be well understood. This should streamline the process, requiring only the payment of initial insurance premiums, obtaining an occupation certification, and finalising registered documents to enable settlements to proceed smoothly.

However, it is crucial to formally engage a strata managing agent at an inaugural meeting for them to issue the Section 184 (sales certificates) required for most settlements. Failure to engage a managing agent or late engagement can lead to delays in compiling the necessary documentation for issuing the S184s, potentially affecting settlement timelines.

Management establishment and owner engagement

Following the issuance of the occupation certificate, there is typically a push to complete settlements promptly. This is followed by a surge of move-in requests, which require careful coordination. An experienced strata managing agent and building management team are essential for handling specific site requirements and the spike in requests that accompany initial move-ins.

Tasks such as waste disposal, loading dock and lift bookings, pet applications, access device requests, window furnishing installations, minor renovations, and defect reporting experience peak demand early in the establishment of a development. Adequate plans, resources, and experienced personnel need to be in place to manage these requests efficiently.

Engaging a committed strata management team with a history and knowledge of the development can ensure a positive experience for new owners taking possession of their property.

What should be done to engage a strata manager early?

Initiating a tender for the engagement of an experienced strata manager should be a priority early in the development phase. The tender should clearly outline the strata consultancy and early scheme establishment requirements, including all the points detailed in this article, expanded to specify the services required.

From a purchaser’s perspective, demonstrating the value of this engagement and ensuring confidence in the selection process are paramount. This can be achieved through a transparent tender and selection process, ensuring that the selection is made in the best interests of the purchasers without any conflicted arrangements.