3.8.1 Compare the proposal pricings | Owners Corporation Network

3.8.1 Compare the proposal pricings

There is no substitute for careful examination of the proposals. Strata companies can deliver quotes which vary significantly, so look closely at what services they are offering for that price, and what you will be paying extra for. Some companies may give an all-inclusive price. With others, you pay extra for every phone call they make, and every stamp they buy. This can make the second manager far more expensive than the first, even though at first glance it looks like a real bargain. Sorting all these differences out and working through each quote can be difficult, but it’ll be well worth the effort in the long-run. It could be useful to hire someone to do this for you if you don’t have the time or expertise.

Don’t just rely on their proposal without understanding every line or possible charge.

It can be very difficult to compare proposals if one has disbursement costs charged at scheduled rates and another has a fixed up front amount. However, if this is the case then you will have to try and estimate the actual cost of disbursements charged at the specified rates. Follow up their quotes with a phone call asking questions on any point you’re not sure of such as what might they expect ‘various stationery charges’ to add up to for a year? You may be able to do this by looking at past charges or going through the schedules and estimating the time spent (see Detailed schedule check list4.7). An example could look like this:

TABLE 1: Strata Manager Proposals: Cost Comparison


Incumbent 1




Initial Contract Period


1 year

1 year

1 year

1 year

Costs Estimate Totals






      Variable Costs Contract






      Fixed Costs Contract






Costs Estimate Components






      Fixed/ Base Costs






      Fixed Disbursement Allowance






      Insurance Commission






      Disbursements + Incidentals






Costs Estimate Assumptions






      ECMs included






      Additional ECMs /GMs






Costs Escalation






      Annual Increase






      Cost in 10 years






Note: Many agreements have a 5% annual price uplift as standard, this means that management fees may outstripped inflation. This figure – as with everything else – can be negotiated.

For comparison, some components of costs can be captured and estimated from historic annual Income and Expenditure reports. See below for example of the incumbent’s annual costs roll-up.

TABLE 2: Incumbent strata management recent full year costs (variable cost contract)

Management Fees ($0’s, excl GST)

Contract Fees


Commission on Insurance


External Agent Costs


Incidentals -Additional Fees


Incidentals -Risk Assessment






                Microencoding Levy Notices




                Accounts Printing


                Strata Admin. Photocopying


                Microencoding Cheques


                Additional report Printouts




                Compile ltr


                Key Administration Fee


                Digital Imaging / Archiving




Note: Actual figures taken from strata expenditure accounts

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