Annette worries her family could be "priced out" of their home if she can't pay rising corporate fees

Annette worries her family could be “priced out” of their home if she can’t pay rising corporate fees

Rising tensions between homeowners and property managers in Queensland over suspended administrative deeds of up to 25 years are being raised at the state government’s housing summit today amid concerns about rising corporate fees.

It begs the question of what property managers are doing to justify rising fees.

Annette McLaren and her husband bought their dream home in south-east Queensland a decade ago, but later found they were paying nearly $6,000 in corporate fees each year.

The 50-year-old clerk said nearly half of maintenance fees for the 150-lot complex on Brisbane Bay would go toward the property manager’s $416,000 annual allowance, budget documents show.

Property managers are caretakers appointed by property developers to oversee management duties and maintenance of community properties such as stairwells, driveways, and gardens.

“It wasn’t until we received our first quarterly statement that we knew anything,” Ms McLaren said.

“We’re just a one-income family and I’m afraid we’re going to be overpriced now – we can’t afford our homes anymore.”

Ms McLaren said her family had to “stay on a very tight budget” to keep up with significant annual increases in corporate dues, as well as council rates.

“I don’t know what the manager is doing to justify that amount of money,” Ms McLaren said.

“We love it here, the area, and I know we can’t afford anything else… We just have to keep making lifestyle changes to be able to pay.” [the fees] as long as we can.”

Darren Potter, the property manager of Ms McLaren’s complex, said he was being paid under the terms of his 23-year-old contract.

“Given the age of the contract and the annual salary increase clauses, we are well compensated. We are very aware of that… Our response has been to work really hard, ensure value for money and work with us to create value for all of our owners, Owners Committee,” he said.

Mr Potter said he needed a team of staff to live on site year-round to provide the management services outlined in the contract.

“Our contractual compensation must not only support a salary that will fund normal benefits and business expenses, but also service a mandatory on-site home loan and business loan that provides access to an on-site salary,” he said.

“Like most Australians now, we are lending to provide the services that local owners want and the cost of lending to generate an income is rising.

“We were no longer being paid to undertake multiple on-site infrastructure upgrade contracts and projects. We have found and created only value for our owners that is consistent with our compensation. Owners have also received a proven dividend in their property’s values ​​in an already heated real estate market.”

Plea for contract reductions

Laura Bos of the Strata Community Association says corporate fees “keep rising” over their 25-year contracts.(Delivered: Laura Bos)

Laura Bos, executive director of the Strata Community Association of Queensland, the industry’s leading body for corporate and community management, said the terms of a property management contract are initially set by developers and can extend to 25 years, making them difficult to contest.

“[The contracts] present a major hurdle when it comes to landowners being able to choose who to take care of their property and how to do that,” she said.

“What we see are quite exorbitant wages for very little in return, which actually causes a lot of disharmony and frustration within a company.

“The contracts are so hard on them [lot owners] to get out and cost them even more in legal fees to fight it.”

Ms Bos said the Strata Community Association will represent entities across the state at today’s housing summit, where it will urge the government to end 25-year administrative rights contracts.

She said her organization would like to see contracts capped at 10 years to allow property owners to review and update their terms.

Trevor Rawnsley smiles
Trevor Rawnsley agreed that some contracts should be reviewed every five years.(Delivered: Trevor Rawnsley)

But Trevor Rawnsley, CEO of the Australian Resident Accommodation Managers’ Association, said short-term contracts would result in more expensive maintenance fees.

“Most of the time there’s very little profit margin from the compensation paid to building managers because they’re being spent on services,” he said.

“Long-term agreements are in the best interests of the shift arrangement because [building management] is often delivered at a much lower price than what would be offered by external suppliers.

“The only thing that’s less expensive for a project is if the property owners volunteer their time to do some of the tasks, but that doesn’t usually last long.”

High rise buildings in Brisbane CBD.
Property managers oversee administrative duties and the maintenance of units and apartment complexes.(ABC News: Chris Gillette)

However, Mr Rawnsley said he agreed some contracts should be reviewed and updated every five years to ensure they are fit for purpose.

“She [owners] could see the comparative values ​​of onsite management versus off-management. As such, we are very confident that five-year ratings would help property owners understand that they are getting value for money.”

“Not in line with other states”

Ms Bos said the Queensland management rights arrangements bear no relation to how other Australian states have modernized their consumer protections.

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