Strata Management vs. Property Management

With the whole concept of strata management often a cause for confusion, it is not surprising that this same confusion extends to understanding the difference between property management and the former. To think that they are the same is not correct, although there are some similarities. The key difference begins with the term ‘strata’ and what that means.

Strata title schemes came into being as a way of managing the ownership of multi-owner apartments or unit complexes. A strata company is formed automatically on registration of a strata plan for the construction of a multi-owner building. When someone buys a lot, that is, an apartment or unit, they also buy a share in the common property, which is the area in the facility available for use by every owner. It is the responsibility of the strata company to control and preserve the common property, and every owner in the complex is a member of the strata company.

The Role of the Strata Council

In very large buildings, it would be impossible to administer a company of such a size without some form of a management entity, and in strata legislation, that entity is the strata council. The members are elected by all the owners to manage the scheme for the benefit of all the owners. In a very small building with only a few owners, they could all form the strata council.

The strata council members have a big responsibility to manage the common property in a way that protects the interests of all the owners. This includes things like making sure all relevant insurances are current and utility bills for common area lighting and running the facilities are paid on time. Because the level of responsibility and liability is so onerous, large strata councils do not perform these duties themselves, but engage the services of strata management companies.

Property Management Governed by Different Legislation

Property management on the other hand is largely concerned with real estate properties that are not strata titled, typically freehold single lot dwellings and duplexes. The role of a property manager is to secure suitable tenants for a rental property, manage any repairs and maintenance, ensure all legal requirements have been met in respect of the tenancy, collect the rent and remit it to the owners. They are also the liaison point between the owners and the tenants.

A strata management company employs professional strata managers who are trained in the administration of the relevant legislation and perform a range of duties that have been agreed between the strata council and the strata management company. A strata manager in a large complex could be expected to assist the council members to frame their budget, perform all administration duties on their behalf, manage their accounts and report to the relevant authorities on the performance of the strata council.

Both roles are subject to different legislation in all states, and while some of the duties and responsibilities may be similar or the same, there are so many legal and procedural differences that it is difficult to compare the two.