Strata committees are being quoted up to 120 per cent more than individual homeowners for building and trade work, with lawyers and advocates warning of a surcharge applied to unsuspecting body corporates.
A survey by the Australian Consumers Insurance Lobby, released in April, found some maintenance and repair companies inflated strata unit quotes by up to 120 per cent.
Lobby chairperson Tyrone Shandiman said one survey respondent said body corporates were being “robbed blind”, raising concerns the inflated costs were being paid back to building managers to secure a contract.
Strata lawyer Amanda Farmer said she was “shocked” at how often contractors attempted to take advantage of a situation where busy owners in a strata might not be paying close attention.
Strata residents are being advised to cross-check maintenance and repair quotes to ensure they’re getting value for money.Credit: Dan Peled
“Some contractors feel they are dealing with a faceless entity - ‘the strata’ or ‘the body corporate’ - that has a bottomless pit of money to throw at a project they are required, by law, to complete,” Farmer said. “I’ve seen this result in inflated quotes, unnecessary variations, and invoicing for incomplete or non-existent work.”
The strata committee for an apartment she owns in Bondi recently sought quotes for the waterproofing of several balconies. Their preferred engineering company quoted nearly double what was expected, charging to repair balconies that weren’t leaking and had not been inspected for issues.
Farmer said it highlighted the need for strata committees to oversee projects but stressed not every owner had the time or legal expertise to do so.
Strata advocate Stephen Goddard said service providers completing work on common areas in buildings weren’t as accountable to an owner’s corporation as they were to a single homeowner.
“The cost of strata schemes can be exploitation. If no one is accountable, there’s no preventing service providers from adding a premium,” he said. “Owners’ corporations are vulnerable due to the lack of accountability.”
Goddard said strata committees should cross-reference quotes to compare work and challenge the service provider over price disparities.
Strata lawyer David Bannerman, however, said higher prices were likely due to laws introduced in 2021 that implemented new regulations on work done on apartment buildings.
The Design and Building Practitioners Act amendments meant designs for works and repairs on apartment buildings have to be submitted by a registered design practitioner, such as an engineer, to NSW Fair Trading for approval.
“In most cases, instead of having one contractor do the work, they’ve got to sub-contract out so in the end you’ve got four,” he said.
“These added significant costs and delays for strata to comply with.”
NSW Fair Trading Minister Anoulack Chanthivong said the government was tightening laws to ensure strata managing agents acted in the best interest of their clients.
“Where managing agents have a commercial relationship with recommended tradies, they’ll be required to disclose it to owners regularly,” he said. “Owners should always get the best price.”
The new laws will be introduced to parliament later this year.