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The long and winding road towards professionalism of Strata Managers

1 May 2022. An article by Tim Graham, a Partner in our Melbourne office.

Compulsory licensing of strata managers has proven elusive in all Australian states other than NSW.  In NSW strata managers must be licensed, but it appears that the licensing and education standards are geared more towards real estate agents and are largely ill-fitting and irrelevant to strata management.

Alternative to licensing, in my view a co-regulation model by which strata managers are required to discharge the following minimum requirements, is recommended:

  • registration
  • professional indemnity insurance
  • creation of a barrier to entry by imposing minimum education qualifications
  • maintaining annual CPD thresholds

Parallel to a co-regulation model, under state legislation vocational associations can apply to the Professional Standards Councils (PSCs) for the State Government to formally recognise that the vocational association as being professional.

There are less than twenty (20) Professional Standards Schemes (PSS) in Australia (and they are predominantly comprised of law societies and bar associations).

In an Australian first for the property services sector, Strata Community Association (SCA (NSW)), successfully formalised recognition that strata is a professional industry by the approval of a PSS commencing 1st July 2021 for an initial 5-year period.

A PSS sets conditions so the vocational association can self-regulate its members to protect consumers.  The civil liability that a member of the PSS can be held liable for by a consumer is limited quid pro quo.

PSCs promote professional standards to:

  • protect consumers
  • improve professional standards, including by adherence to a Code of Ethics including professional standards

Strata management businesses are expected to enjoy:

  • enhanced self-regulation
  • improved professional standards
  • more accountability
  • additional CPD requirements
  • improved systems and processes for businesses
  • better client experience
  • limited liability

In Victoria, SCA (Vic) has commissioned research on the preferred model.  The report is not yet publicly available.  However, we expect SCA (Vic) to advocate the co-regulation model.  And we commend that course.