By Kirsten Craze
Strata Hub: How to charge an administration fee
Strata Hub was introduced by the NSW Government in an effort to provide more transparency, better regulation, improved accountability and more engagement for owners and residents of strata schemes.
It’s a digital tool to facilitate intervention and support as well as allowing the communication of important messages to strata schemes from emergency services, councils and regulators.
Under the Strata Schemes Management Amendment (Information) Regulation 2021, strata schemes are now required to report information each year via the Strata Hub’s online platform. As a result, that additional reporting is weighing on the already hefty workload of strata managers and their teams.
Given that time is money, businesses are now asking the question - How do we charge for the work that goes into the Strata Hub reporting?
Managing the workload
Ben Cabello, director of Strata Embassy and committee member of REINSW’s Strata Management Chapter said businesses will need to start factoring Strata Hub into their workload per property. As well as getting each building into the Hub for the first time, he said the ongoing administration also needs to be carefully collated.
“Further to that initial reporting, within 90 days of each AGM being held, you’ll need to make another report to update the registry about the outcomes of that meeting,” he said. “So each business will need to manage that workflow so those 90 days don’t go sailing past and you’re late. The reality is, this all takes additional time out of your day.”
Mr Cabello added that savvy strata managers are now looking into timesaving technology which can help streamline the process.
“Depending on the software you use, some actually integrate with Strata Hub and pull data from certain fields to pre-fill some areas, but not all software can do that. However, it’s a bit dangerous to rely solely on whatever fields your software fills in because this information is going to NSW Fair Trading so you need to ensure the data is correct.”
“I always like to give my clients as much information as possible, especially for any new contracts. I think it's about being upfront with this fee and trying to mitigate unnecessary charges.”
Wenna Wu
Director, Strata Evolution
Passing on the fee
NSW Fair Trading is currently charging $3 per lot to help fund the development and ongoing maintenance of the Strata Hub community portal. This amount can now be paid by the scheme directly.
“When it first started the only option was a credit card, which meant the strata business had to pay upfront. Then the strata plan reimbursed the business, which wasn't ideal. Now with BPAY functionality each strata plan can pay directly from their trust account,” Mr Cabello explained, adding there is still the question of recouping the costs of the extra administration.
“It's about coming up with a reasonable fee for the time and effort to collate the data and answering the questions after each AGM. It’s my opinion that the work is largely the same - whether it's 4 lots or 100 lots - you still have to go through the same fields even if some responses are not applicable.”
His suggestion is to charge a fee based around the time spent dealing with Strata Hub.
“It has to be something reflective of the work. If you're managing 500 units in a building, the work is the same as 6 units. I certainly wouldn’t like to see people charging $2000 just because it's 500 units, but I don’t want to see $20 either,” Mr Cabello said.
“What you charge for Strata Hub could be a flat fee, or it could be time-based. It might be half an hour, one or even two hours. Whatever it is, as long as it's fair and reasonable.”
Time is money
Wenna Wu, director of Strata Evolution and fellow Strata Management Chapter committee member says that what a strata agency charges for Strata Hub management is ultimately up to the individual business, as long as it’s transparent for property owners.
“Most strata management agencies have a fee structure comprising a base management fee, disbursements, and Schedule Bs. It’s within these Schedule B hourly rates where I'm seeing the Strata Hub rate currently being charged, as they are generally for items that fall outside the agreed management services,” she said.
“I don't have a problem with that at present, because a lot of these strata schemes have been in a contract with their current strata managers prior to Strata Hub being mandated. Since this is a fairly new piece of legislation, strata managers have had to pivot to incorporate this into their management services.”
She said it would be wise for strata managers to be more proactive about charging an all-inclusive service fee.
“It’s a part of your measure of duty. This fee should be incorporated into your base management agreements at contract renewal or for new contracts moving forward, because I don't feel it's right to charge owners corporations at a premium Schedule B rate for something that’s effectively your role and duty to act on their behalf.
“It's about coming up with a reasonable fee for the time and effort it takes to collate the data and to answer the questions after each AGM. The work is largely the same - whether it's 4 lots or 100 lots - you still have to go through the same fields even if some responses are not applicable.”
Ben Cabello
Director, Strata Embassy
Moving forward with Strata Hub
Given that Strata Hub is here to stay, Ms Wu suggested a more permanent plan should be put into place regarding charges for the service.
“I like to always give my clients as much information as possible, especially for any new contracts. I think it's about being upfront with this fee and also trying to mitigate unnecessary charges. For example, getting a strata manager to do a Strata Hub upload would attract a cost in excess of $200 an hour, whereas an administrator would be charging somewhere between $60 to $80 an hour,” she said.
According to Ms Wu, the size of the building should also be taken into consideration when determining a Strata Hub fee.
“Whenever a new strata manager takes over a new scheme, they'll have an establishment and set up fee which is normally calculated on a per lot size due to the respective volume of data required to be entered. Often, it’s from 2 to 50 lots, 50 to 100 lots, and maybe 100 lots plus. Effectively it’s the different tiers that determine how much a ‘set up and establish fee’ will be. I think a similar fee structure for the Strata Hub would be appropriate” she said.