The potential ban on paying insurance commissions to strata managers sparked a great deal of concern within the strata management industry. So we were very pleased the Government listened to the concerns raised by the relevant industry bodies and stakeholders and the NSW Strata Law Reform Position Paper, released on 14 November, has focused rightly on increased disclosure and transparency around third-party payments.
Section 1-5 of the Position Paper proposes a new regime of disclosure, accountability and regular review of commission arrangements. We believe this focus is fitting however, in any of these elements, it will come down to the detailed requirements of commissions and quotes for certain products that will determine whether strata management businesses can remain financially viable under the proposed regime. Looking at the high level proposals we have a few questions and suggestions on how these could be best implemented in practice. Some of our initial comments on the proposals outline in Section 1.15 are:-
- Requiring the managing agent to disclose at each AGM the circumstances, dollar amount and services provided in respect of any commissions received during the previous 12 months: Dollar disclosure will assist with tranparency and we think this will be instrumental in helping owners understand commission arrangements. We also think it would be helpful for an industry template to be developed to ensure consistency and increase transparency for owners.
- Requiring the managing agent to disclose at each AGM a best estimate of the circumstances, dollar amount and services to be provided in respect of any commissions to be received in the next 12 months: More detail is needed to understand what is required for a best estimate as well as the ramifications if the amounts vary through the year. this could just add another layer of red tape to the process and may prove time consuming for the industry. It is also going to be difficult to provide this estimate in relation to insurance as so many factors come into play when determining the premium in future. Factors such as a new building valuation can increase or decrease the building sum insured, claims incurred in the future period for the scheme affecting the claims loss ration, catastrophes, reinsurance costs (also subject to catastrophes), changes to underwriting guidelines and rating models. These will all be issues that we need to work through.
- Requiring the managing agent to disclose at each AGM a fee for service based model (fee of commissions), outlining the costs of services to be provided in the next 12 months. Again the detail or what this means will be vital. It may be relevant to how commission vs fees when negotiating the management agreement or where requested at the AGM so an informed choice can be made. However to provide this annually may be both onerous and of little value if the OC is happy with the commission arrangement.
- Requiring Owners Corporations to decide at each AGM whether the managing agent is allowed to receive commissions (including in which circumstances) for the next 12 months: If this was to be enforced, it would be important for the strata management agreement to have provision to adjust fees in place of commission. Often the strata management agreements extend for longer than 12 months so the remunerations arrangements would need to be renegotiated or a mechanism to adjust fees would be needed if a key change like this was to occur. Otherwise this would create problems with contract certainty and would also likely have financial implications for the strata management business.
- Requiring the managing agent to get at least three quotes for certain products (for example, insurance) to ensure competition and choices for the Owners Corporation. The parameters for multiple quotes are not clear. Is the proposal to obtain these yearly or every three years and is the size of the scheme relevant? It is of great concern if the focus becomes purely 'price' rather than product cover and consideration of additional risk exposure that changing policies may have for the OC.
We are pleased with the proposals to see improved transparency in the quote and renewal phase of the insurance process. We consider it is very important however that insurance information does not get simplified to limits and price, with no account for scope of cover, reputation, insurer credit risk, claims payment track records and so on.
The Government's aim for greater transparency to increase trust between strata managers and the OC is an honourable one. To achieve this aim it will be important to continue to engage with the industry to ensure there is clarity around the requirements and that practical solutions are realised and translated in the new world of strata.
Source: Stratalive www.stratalive.com.au
At 5:38pm, July 27, 2015
Evnoerye would benefit from reading this post
At 11:38pm, July 27, 2015
Supporting LEAF is reflective of good comnumity citizenship and values in support of our comnumity of Scenic Acres as a whole. Having recently canvassed around my home streets, I have been encouraged by the demonstration of such values from so many neighbours. Conversations around all sorts of issues that are valuable to our comnumity arose and gave us something to connect about. As comnumity residents we should take any advantage to be part of making our comnumity better for everyone, not just our personal property but showing pride and support for others. I particularly like the fact that we, as residents, will have control over how our comnumity greenspaces are cared for. This will only increase property value for everyone. Just taking a walk around one can see the neglect in these places. Being neighbourly and comnumity-minded is one of the great strengths of our comnumity I was pleased to see so much of those values being upheld still by so many comnumity-minded citizens!. What a great place we live in!
At 8:31pm, December 26, 2015
, is it possible to use one very rboust 12 volt alternator, 275 amp, feeding 2 12 volt AGM batteries. These batteries would be wired in series to give us the 24volt system and then run a parrel circuit just for the 12volt?
At 8:13pm, December 30, 2015
No I don’t have a Russel Group degree Pete, my own hooruns degree was entirely funded by my own sweat and toil. Furthermore, I may not know much about Royal etiquette, but I do know my subject. Two things need clearing up on that subject and that’s me finished Pete. The purpose of this forum is for all members to have their say and I sincerely hope they do because what you are suggesting does Eric/George a great disservice. Point 1 – Orwell went to Spain with some idea about writing newspaper articles. At that time, for Orwell, Socialism was no more than a general idea in his mind that stood in opposition to inequality, imperialism and, of course, fascism. Upon arriving in Barcelona he conceded that it was the first time he had been in a place where ‘the working class were in the saddle.’ He recognised it immediately as ‘a state of affairs worth fighting for’ and the following year wrote to Cyril Connelly that ‘I have seen wonderful things and at last really believe in Socialism.’ These are George Orwell/Eric Blair’s words – not mine. The only reason Eric Blair was stood in that trench that morning was in support of the Spanish working-class in opposition to Franco’s top-down revolution. It wasn’t just George Orwell who took a bullet in the throat for the cause of the working-class Pete – it was Eric Arthur Blair – and I would say that at the Thiepval memorial, Fleury-devant-Douaumont, or at any of the other memorials on the battlefields where the working-class of Europe slaughtered each other in 1914-18. You should read Homage to Catalonia again Pete – it’s probably Orwell’s most important book.Point 2 – Blair became Orwell because when Down and Out was published he was earning his living as a teacher. The reasons are obvious. Boring isn’t it but it’s as simple as that. Second, and more important, by clinging to your theory Pete, you are also completely missing the point of what Orwell the writer was all about – that of social conscience. As I sit here in my library (yes working class people do have libraries Pete) and draw upon a hundred quotations to illustrate my point. I’ll settle for one, Writers and Leviathan published in 1948 and you will see what I mean. Orwell’s spells out exactly why he became a political writer:“The invasion of literature by politics was bound to happen. It must have happened, even if the special problem of totalitarianism had never arisen, because we have developed a sort of compunction which our grandparents did not have, an awareness of the enormous injustice and misery in the world, and a guilt-stricken feeling that one ought to be doing something about it, which makes a purely aesthetic attitude towards life impossible.”You see? From the start, Blair decided to be a writer – something outside of normal life – “enormous novels with purple passages and unhappy endings.” But the above is an account of an invasion! Read Inside the Whale! He could not be the aesthetic writer of the twenties that he wanted to be. He embraced the invasion of literature and chose content before form and became the politically/socially conscious writer of the thirties. Read Why I Write – he chose four reasons why, the forth being political purpose. In any other age, the first three would have outweighed the forth. Sorry, but bang goes the theory Pete! Orwell was Blair – the two are indistinguishable.For the record Pete, I’ve been to all the Orwell houses, including Wallingford, AND St Marks Rd for that matter. I was surprised to discover that ‘Roselawn’ is still called ‘Roselawn.’ Had I known you then, I guess I could have dropped by for that single malt in a cut-glass tumbler. Now that I’ve let my working-class cat out of the bag, I guess I wouldn’t be welcome – I prefer Kentucky Bourbon anyhow.
At 6:38am, August 1, 2016
Danke fÃ¼r den Bericht, lieber Andreas.So kurios das fÃ¼r Soeadl-Meaia-Frciks klingen mag: Das Treffen in der Kohlenstoffwelt hat – zumindest bei mir – einen deutlichen Schwung auch in der Online-Vernetzung bewirkt.