NSW auditing a strata manager versus police investigation

I have an apartment in NSW where the strata are behaving like junkies.

They have recently been invoicing us for "special levies" of for example $ 19,000 shared between 25 apartment owners.

When we push for detail we got told it is for "replacing 3 x hot water services" which apparently cost $ 19,000 , we asked two plumbers to quote the same work and their quotes were $ 7240 - $8100.

We have requested several times for copies of the repair invoice however they promise they will definitely send it today but they never do...

There has been other similar charges with no detail provided for what the extra costs are allegedly for.

This strata company is one of the biggest in western sydney but i suspect someone in accounts ,might metaphorically have a new drug dependency.

Will police get involved in this type of thing or are the numbers too small ?

What is involved with an audit and who does them ?

 

Why would the police be involved? You don't have any evidence of a criminal offence yet do you?

 

The unit owners should be voting on whether to appoint an auditor ... each year I think?
Usually voted no, to "save money".

So you need to get the owners to vote yes, and pick your own auditor (ie someone different to who your SM use ordinarily) and get the audit/s done. You might need to discuss specific requirements with the auditor, you can expect this to cost more than a standard annual strata audit.

Only then you might begin to get any evidence of wrongdoing, and go from there.

[Typically though you will find there will be an invoice for $19,000 for the three HWS - what will you do then? Uphill battle to try and prove the invoice is fraudulent, or there were backhanders, or whatever].

 

The OC engages an auditor (usually voted for at the AGM). Definitely worthwhile if the SM has been in place for many years or you have large expenses eg expensive maintenance project.

 

Join the strata committee, take some responsibility and stop being a victim?

 

If you havent yet, grab a copy of any Audited Accounts of a Strata, and read the Auditors Report, every word of it.

Firstly, you will find that a "typical" Auditor of Strata does not need to be a full-fledge Accountant, as in they do not hold the Audit Licence that a large firm would have.
(Well, most Strata employs small or sole person to perform audit, very rarely a large firm)
Secondly, you will find the scope of work is financial, not operational. For example, they only need to test vouch that a certain payment is supported by "a document/Invoice". But whether the price is reasonable or not, whether the person performing the job is qualified or not, is outside of their scope.

However however, if you carry out a "Special Audit" or Investigation, that will be a totally seperate matter.....

Please check the last 3-years Minutes of your Strata, it might have been approved then?
I find it hard to believe that they can just happily invoice you without any approvals.

 

I’ve been in strata 35 years and own one of western Sydney’s largest independent strata management companies. Ie owned by me not an international consortium. If you reread your post, it sounds like you want others to do the work for you whilst you sit back and make wild claims.
If anyone made the same claims about my firm they would be ignored.
Do you really believe Police would get involved?
Do you believe that work would be paid for without invoices being received?
Do you believe the other 24 owners would have paid for a levy if they had not agreed to it in advance?
I would read something about Strata management in NSW so that you can be more educated on the subject and speak with more authority.
If you have been a long term owner go back and read all the agendas and minutes that would have addressed all your concerns in advance of the payments being requested.
If you’re a short term owner then read the Strata Report that your lawyer would have arranged for you prior to the purchase.
Either way an agent can not determine or vote on a special levy.
Only owners can agree to pay a special levy in advance at a general meeting of owners.
So there is nothing hidden, nothing secret, the price for a major 3 unit HWS servicing 25 home units sounds about right depending on gas or electricity. It is not simply the price of three domestic systems.
But more important when asking questions, don’t assume theft, drug dependency or being ripped off. Simply assume you have less knowledge than others and are determined in a friendly way to build up your knowledge on the subject!

 

If we one day get the strata to supply a copy of the $ 19,000 plumbers invoice , we can then contact the plumber and ask if that was the sum they invoiced or if some special ink was added to the invoice value , maybe their invoice was $ 9000 and an extra digit was added on the front ?

more investigation is required and more owners required to attend strata meetings so we can apply our own investigative DD.

 

Strata companies are thieving rip off merchants

Fees to moon are the norm

You should investigate self management like what I did with a small complex I owned a townhouse in

Look into:

ourbodycorp.com.au

They offer an assisted self mangement option for $120 per unit per annum

They take care of the accounting and have an online portal for record storage

The rest is taken care of by the body corporate members

 

They sent me a bill and took my money .

Dang crooks they are. Getting approval for special levies, carrying out essential works, then expecting the OC to pay for it. How dare they?

 

Before you spend the money on DD (Someone needs to approve this), have a look at the previous Minutes, you might find the Quote and their contact details.
Or if you live onsite, or can ask someone who live onsite, to get a picture of the HWS and you can sort of know how much they are worth (installed).

 

Be very careful before you start alleging things like that . The first thing that will happen is that you will be put in to the " difficult " basket and future requests by you may be lost or misfiled . That's human nature .

Get a copy of the invoice and check the price of the HWS yourself ( I'm sure the plumber will have a mark up ) . I think a plumber would be very unimpressed if you rang them and asked what was the price of their invoice . I'd guess the first thing they'd be doing is ringing the Strata manager and saying WTF !

We were in a very problematic BC and ended up selling the units ( for a very nice profit ) because those 2 were responsible for over 95 % of our hassles and the problematic owner reminds me a lot of various conspiracy theorists around at the moment . She would say things that was blatantly wrong and just cause tension . We weren't the only owner to sell to get away from her .

Cliff

 

As i mentioned above , we got two plumbers to come and quote the same work , their prices were $ 7240 and $ 8100.

 

Sorry i didnt notify you before spending your money Scott but i have billed your strata $ 5000 for replying to this post , sadly i cant seem to locate the quote i never showed you nor can i find the itemised invoice for this work just carried out without notice , send me a request for a copy of my invoice and i will sadly be unable to locate it at this time because i know police wont bother investigating fraud offences......

You're okay with that yeah ?

 

The most obvious questions are
“why didn’t you go to the meeting as the special levy and amount are clearly written on the agenda?
How do you know the invoice is $19,000 and not that the special levy is $19,000 to cover other costs that you are not telling us?
Who is we, when you say we obtained alternative quotes to replace the HWS? Did you get the quotes before the work was done or after the work was done? Did you show the agent and other owners the quotes? Is the HWS under a service contract to be maintained by only one company? Did you replace like for like or upgrade for a better system?
If what you say is true, why not reach out to the other owners, rather than strangers on a website or even talk about police?
How do you know what was wrong with the HWS, pumps, electronics etc if you did not have the original invoice?

This smells of poor fellow me, rather than “I want to do something”

The Department of Fair Trading will immediately investigate a real complaint but, it sounds like the other owners in the building don’t back you? Can you clarify the things that you are not telling us!

i feel you are trolling this community!

 

Of course, what are the terms of engagement of the SM? Does the executive committee approve emergency expenditure (one hws is an emergency/reactive, 3 is planned maintenance). There must be precious little planning by your OC if you need a special levy to cover $20K between 25 owner's. There should be adequate in the kitty to cover some expenses outside of the budgeted SF expenses.

 

Trouble is it only takes a few tight fisted owners to vote down the Capital Works fund levy !

Often the same people want everything 110% perfect also, and any time there is any "funds" they can't wait to spend it all

2 years running I had successfully lobbied to increase our Capital Works levy due to the building (19 lots 5 levels) needing painting, yet last AGM it was voted down with the comment "we will just raise a special levey for that"

*not all strata managers are honest, if 11 people vote for 5 committee positions and I watch both my neighbors write my name on their ballot (as we were standing together) and I still don't get elected....... (I'd given the strata manager a hard time justifying expenses previously, he clearly counted the YES people in ).

 

@Stoffo - who held all of the proxies?

 

Fair Trading may be able to assist. The strata manager will possess a real estate license. But screaming theft and accusing people of being junkies isnt going to assist and your complaint would not progress far.

Find some facts eg what was the cost, what was it for (strata minutes will have details) etc. They may have had to do far more than just replace three hot water heaters. Aftre all it is a 25 apartment building. Was it three per floor ? etc

 

3 out of 11 is not a majority If 5 are to be elected and 11 are present and are paid to date, then each of the 11 puts down 5 names.
The 5 names with the most votes win. If 4 get 11 votes, one receives 10 and you only receive 9 then you will lose.
Generally the old committee will always be voted back in and they don’t like the “conspiracy theorist” who makes trouble for them being elected.

The managing agent doesn’t get a vote and generally doesn’t care. But the die hard committee don’t like rebel rousers. They work hard month after month, so to be questioned and nit picked by those who don’t attend meetings, working bees and don’t generally help the committee then raise issues over committee approved expenditure once a year, rather than congratulate them on all the work they have done in maintaining the place is poor form in their opinion.
There may also be animosity between owner occupiers and landlords.
I’m not saying this is the case, but in the mind of many older committee members they are the foundation on which the building stands and the expenditure that they have approved and the hours they have spent at meetings, should be applauded.

An agent generally doesn’t do anything that is not approved by the owners. Usually approvals are in writing or at a meeting.

Turning up once a year and expecting to suddenly rehash 20-30 hours of deliberation of the committees time is not in their interest.