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Topic:Construction and Real Estate Industry

Larger apartment buildings create more complexity in strata management. File photo. (ABC News: Keana Naughton)

The loss of $2 million from strata property accounts on the NSW Mid North Coast has triggered concerns about the protection of shared assets.

Industry experts warn body corporates should beware of "bait pricing" before signing contracts with strata management agents.

Police are investigating and industry changes are due to start on April 1.

Link copiedShareShare articleStrata experts are reminding consumers about the importance of protecting body corporate assets after customers lost $2 million in an alleged fraud now under police investigation on the NSW Mid North Coast.

NSW Fair Trading Minister Anoulack Chanthivong, in a public statement, alleged Coffs Harbour strata property manager Jessica Marrie Carah made 398 fraudulent transactions to transfer funds from 66 strata plans into her own accounts.

Jessica Marrie Carah is permanently disqualified from working in the New South Wales strata industry. (Facebook)

"This hurts the industry whenever this happens," said Robert Anderson, president of the industry's peak body, Strata Community Association.

He said instances of alleged fraud were "fairly rare … but it does happen from time to time because it's other people's money and there's a level of trust".

Mr Chanthivong announced last week that Ms Carah's strata manager licence had been cancelled.

"Fair Trading has taken strong action for this agent and has permanently disqualified her from practising in this industry, which means she can't earn an income in this profession," he said.

NSW Police Strike Force Colebrook is investigating a possible criminal fraud case involving Ms Carah, but no criminal charges have been laid against her.

Before trusting a strata property manager with their bank accounts, owners' corporations make assessments on several criteria. (ABC Coffs Coast: Claire Simmonds)

More than 1.2 million people live in homes managed by 86,000 strata schemes across NSW.

Where units, townhouses, and villas occupy a single lot in a strata scheme, the property is divided into individual lots and common property, such as external walls, roofs, stairwells, and driveways.

The owners elect a strata committee to manage the buildings and common property, funded by strata levies.

Robert Anderson says government reforms have improved transparency for consumers. (Supplied: Strata Community Association)

Robert Anderson said owners should receive financial reports or be able to view financial transactions and reports through an online portal.

"The only other thing that could happen is if you paid your levies and it's not showing up in your accounts as money received," he said.

Strata Business Brokers director David Lin said strata committees should invest time to ensure they recruit the best manager.

"You should demand there are professional financial systems and processes, they are using the right software and you should look at the checks and balances."

New South Wales Fair Trading has invested $8.4 million into the Strata and Property Taskforce audits and investigations. (ABC Coffs Coast: Claire Simmonds)

An owners' corporation can appoint a strata managing agent to conduct meetings, collect levies, manage finances and insurance, and communicate with owners.

Licensed by the state government, the agent can provide professional advice on legal obligations, prepare budgets, and manage accounts.

Mr Lin said there had been "an emphasis on low pricing and low fees, where there should be an emphasis on quality".

"The consumer wants the cheapest price, and the manager obliges by giving them a cheap, base management fee," he said.

David Lin warns owners' corporations to beware of "bait pricing". (Supplied: Strata Business Brokers)

Once a strata manager is engaged, Mr Lin said committees should make time to cross-check balance sheets with bank statements regularly.

There are 86,000 strata schemes in New South Wales and 1.2 million people accommodated in strata living. (ABC News: John Gunn)

Strata committees can now use an online tool to check the track record of property agents before signing a contract.

The NSW Fair Trading Name and Shame Register was launched three days before the outcome of Ms Carah's case was announced, and included her name.

Anoulack Chanthivong says the government will not tolerate those who breach consumers' trust. (ABC News)

Mr Chanthivong said the government had also allocated $8.4 million to a Strata and Property Taskforce to regulate the strata industry, conduct investigations, and implement strong enforcement actions against agents caught doing the wrong thing.

Robert Anderson said the changes would be "helpful" for consumers.

"Fair Trading has been given much greater powers to do unannounced inspections into real estate and strata management agents, and they are doing them," he said.

Other industry changes will take effect on April 1, including standardised capital works and initial maintenance plans, and the requirement for evidence of independent certification for new buildings.

Owners' corporations have a lot to consider when selecting a strata property manager. (ABC Coffs Coast: Claire Simmonds)

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