This article discusses whether a strata manager can restrict access to financials even when owners are paying for the software that stores and displays those records.
Question: Can a body corporate manager restrict owners’ access to financial information when owners are paying a quarterly fee for the software?
Our body corporate pays a quarterly fee to the strata management company for software and archiving, which includes access to StrataMax. Given that owners are effectively paying for this software, can the manager decide what information we can and cannot see on the portal?
Previously, all owners could view the Statement of Income and Expenditure online. Recently, access was removed without any notice or explanation, and we now have to request the document and pay a fee. This feels like a major step back in transparency, especially since the statement is one of the most important tools owners have to understand the body corporate’s financial health.
Past managers also included the full Statement of Income and Expenditure with meeting minutes. Our current manager now only provides the balances of the sinking and administrative funds, which is far less informative. Is this acceptable, and should owners expect full financial visibility if we are paying for the software that stores these records?
Answer: Check their contract to see what they agree to supply for the fees paid.
It’s a significant red flag if owners at your scheme are required to pay for access to basic documents.
Usually, a body corporate agency selects a software partner that provides the infrastructure to manage the scheme. The software manages recordkeeping, issues levies, and performs a wide range of tasks that managers handle.
The platforms usually provide some portal access for owners to access core documentation, including the balance sheet. This is the case with the StrataMax system.
If the management agency chose to turn off access, they could be within their rights. Check their contract to see what they agree to supply for the fees paid. Maybe their business model presents a low base fee with charges for all interactions with the body corporate.
However, it seems an odd choice. Transparency is an important part of body corporate management. If you have a system like StrataMax in place and customers are already paying a disclosed fee, why not provide the access the system allows?
Increased revenue is the obvious answer, and it’s not an illegitimate one. Companies have to turn a profit and are allowed to make their offer to customers as they see fit. Still, a policy like that seems likely to create more problems than it solves. The fact that you are complaining is evidence of this. It’s also reasonable to complain that access seems to have been turned off mid-way through the contract. The company were appointed based on providing a particular service, and now you are not getting it.
If you are unhappy, the next step would likely be to talk to the committee and have them liaise with the manager to provide the access. The committee should think about how limiting access to documents will affect body corporate relations and their capacity to manage the scheme. Limiting access to documentation tends to generate questions, accusations and rumours, making management harder than it needs to be. If the manager is asked to change the system and refuses, they may be within their rights to do so. In that case, to change the system, you may have to look for a new manager.
William Marquand
Tower Body Corporate
E: willmarquand@towerbodycorporate.com.au
P: 07 5609 4924
This post appears in Strata News #770.
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It’s a novel idea to think that providing information for a fee is a breach of code issue, but I’m not sure that it carries water. Follow the thought through, and it implies that any professional managerial service should be provided free of charge, as lower costs are best for the body corporate. But then there would be no services, which probably wouldn’t be for the best. Maybe you could make the argument the other way – that in putting forward a company that restricts access to basic information, the committee is in breach of its duty to owners. It’s an area worth some thought, and I’d be interested to hear what legal minds think, but practically, I don’t think it impacts this issue.
What we can say is that providing information for a fee is written into the legislation, so there is a basic acceptance of this as a legitimate practice. There is no inherent right to unlimited free access to your information. It’s also the case that there is no set definition of the managerial model. It’s a free market, and companies can set their strategy to draw customers as they see fit. Personally, I have often wondered whether you could have a successful strata management business that provided services with no fixed or base fees but where all work was charged at a fee. Many (maybe most) businesses in society operate in this way, so there is no reason why you couldn’t have the same in strata.
We also have to remember that the information we have here is asymmetric. We only have a short email from which to base opinions; there is likely to be a much bigger story here. I’d be concerned that the basis of the contract seems to have changed mid-way, and owners at the scheme may want to discuss that with the managers or seek legal advice if necessary. Otherwise, owners should consider whether the model they are being offered is good and act accordingly.
Yes, if we look at it purely from the BCM’s commercial point of view, they are free to structure their fees in whatever way makes them more profitable.
But as you said, the stronger angle is probably turning the argument the other way to the Committee or Body Corp itself: that in appointing (or retaining) a manager that restricts access to basic information, the committee may be in breach of its duty to owners.
So while the manager is perfectly entitled to offer a low-transparency/high-fee model to new clients, once the body corporate has appointed them on the understanding that proper portal access and easy to information is included, the committee cannot (or instruct the BCM) downgrade that access mid-term no matter for the reasons as allow the manager to earn extra revenue or want to keep owners mute. Doing so falls foul of the statutory reasonableness requirement.
We have case lawn on very similar facts in [2017] QBCCMCmr 593. There the committee instructed the manager to shut down general owner access to an online portal that provided financial and other information. The decision was later declared unreasonable and invalid by the adjudicator, primarily because transparency, fairness, and owner access to scheme information are key tenets of the legislation, and removing a service that delivered those things ran counter to the spirit of the Act. The contract governs the manager’s strict commercial obligations to the body corporate, but the BCCM Act still overrides and requires the body corporate itself (including when acting through the committee) to act reasonably and transparently.
And on the BCM’s commercial decision itself, yes, it is legally permitted, but from the client’s (i.e. the owner and body corporate’s) point of view it is far from ideal. Most owners will understandably see it as prioritising the BCM’s profit over the body corporate’s interests. And this almost certainly drive schemes to seek an alternative BCM whose service model better aligns with the statutory duties of transparency, reasonableness, and acting in the best interests of the body corporate and its owners.
Thanks for your interesting comments.
So many of these issues come from the fact that most of Queensland’s body corporate legislation was enacted in 1997 – and would have been written in the years before that. For context 1997 is 11 years before the advent of the iPhone. When access to records was being contemplated then a lot of the thinking would have been based around printing and posting material. Mostly, those days are gone, but managers and owners are now stuck performing acts of contortion trying to make modern technology fit within the framework of out-of-date legislation.
Personally, I would say that ensuring owners have straightforward access to standard scheme documents should be a minimum standard for any well-functioning body corporate – how can you realistically be expected to manage and vote at your scheme if you don’t have this?
As it is though, we have to work with the legislation we have. I’d like to see the breach of code of conduct idea tested, but I couldn’t tell you if it would be successful. Still, even if it wasn’t, simply making a claim like this might push change. Equally, any challenge to the manager may or may not be productive, but often these issues flounder because the body corporate doesn’t want to spend money on lawyers.
Most likely, I would expect that if a sufficient number of owners dislike the policy, they will just vote to change managers at the next opportunity.
This surely raises the question of whether the BCM is breaching the Code of Conduct, which requires them to act in the best interests of the body corporate, by restricting access that was previously provided – especially when every owner is effectively paying for the software through their levies – purely to generate extra fees for the manager. If the committee has agreed to or decided this approach, then the committee itself may not be acting in the best interests of the body corporate and its owners. Acting in the best interest of the body corp requirement is not optional or just a “nice to have” , it is a statutory legal requirement written into the Body Corporate and Community Management Act and the relevant Regulation Module. Also it will be judged whether the Committee is making a decision reasonable or not reasonable which is another legal requirement.