Do I legally need to get 3 quotes for strata management?

No. NSW law does not generally require exactly three strata management quotes before appointing a manager, but NSW Government guidance recommends comparing at least three like-for-like proposals.

No. An NSW owners corporation generally does not have a legal duty to obtain exactly three strata management quotes before appointing a manager. Comparing at least three proposals is nevertheless recommended by the NSW Government because it helps owners test price, service quality and experience. The appointment must still be approved through the proper owners corporation process and documented in a written management agreement.

Generally, no. There is no standard NSW rule requiring an owners corporation to obtain exactly three quotes before appointing or changing its strata managing agent. However, NSW Government guidance recommends comparing at least three strata management proposals so owners can assess fees, service levels, experience and value for money. Three quotes may still be required by an internal owners corporation policy, a previous resolution, a tender process or another document applying to the scheme.

Is three quotes a legal rule or a recommendation?

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What does NSW Government guidance recommend?

NSW Government guidance says an owners corporation should compare at least three proposals when selecting a strata manager. The purpose is not simply to find the lowest annual management fee. Comparing several proposals helps the scheme assess service quality, relevant experience, workload, technology, additional charges and the manager's ability to support a similar building.

A scheme may decide to appoint a manager after considering fewer than three proposals, but it should be able to explain why the process was reasonable and in owners' interests.

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Why do people think three quotes are legally required?

The belief often comes from procurement policies used by businesses, government agencies, developers and owners corporations. It can also arise because strata law imposes quotation requirements in other situations. In NSW, these include insurance quotations obtained by a strata managing agent and independent quotations for higher-value proposed expenditure.

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What separate quote rules apply to insurance?

When a NSW strata managing agent helps arrange insurance, the agent must generally provide at least three separate quotations for the owners corporation to consider. If the agent cannot obtain three quotations, the agent must explain the reason in writing. This insurance requirement does not mean the owners corporation must obtain three proposals before appointing the strata manager.

What separate quote rules apply to major expenditure?

NSW strata law generally requires at least two independent quotations when an owners corporation proposes expenditure above the prescribed amount, currently $30,000. The quotation requirement concerns the proposed item or work and may be subject to exceptions, including emergencies. This is another reason owners may remember a quote rule, but it is not a rule requiring three quotes for a strata management appointment.

Could my scheme still require three quotes?

Yes. A non-statutory requirement may still apply within a particular scheme. Before using only one or two proposals, check whether the owners corporation has adopted a procurement policy, spending policy, committee code, previous general-meeting resolution or tender requirement. A developer handover document, building management agreement, finance policy or funding condition may also influence the process. These documents cannot override legislation, but they may impose additional internal governance requirements.

• A resolution requiring three comparable proposals for contracts over a stated value
• A committee policy requiring competitive tendering
• A requirement in the current strata management agreement before renewal
• A lender, grant or funding condition
• A government or institutional owner procurement policy
• A developer transition or defect-remediation governance plan

Who appoints the strata manager?

The strata managing agent is appointed by the owners corporation, not by one committee member acting alone. The appointment should be considered and approved through a properly convened general meeting using the resolution required by NSW strata law. The strata committee may research managers, obtain proposals and make a recommendation, but the owners corporation makes the formal appointment.

What should the appointment motion include?

• The legal name and licence details of the proposed strata managing agent
• The proposed appointment period
• The commencement date
• The approved management agreement
• The functions and powers delegated to the agent
• The base management fee
• Additional service fees and disbursements
• Any insurance commission or other financial benefits
• Authority for nominated office bearers to sign the agreement

Can the committee appoint the manager without a general meeting?

The formal appointment of a strata managing agent is generally an owners corporation decision made at a general meeting. The committee can carry out preliminary work, including preparing the brief, interviewing candidates and negotiating proposed terms. Owners should receive the proposed agreement and enough information to understand the recommendation before voting.

How should we compare strata management proposals?

• Total expected annual cost, not only the base fee
• Services included in the base management package
• Hourly or fixed charges for additional work
• Meeting attendance and after-hours rates
• Portfolio size and manager workload
• Experience with buildings of similar size, age and complexity
• Qualifications, licence status and professional membership
• Response standards and escalation process
• Financial reporting and arrears management
• Maintenance and contractor procurement processes
• Insurance arrangements, commissions and disclosure
• Owner portal, document access and cybersecurity
• Contract term, renewal, notice and termination provisions
• Handover assistance if the appointment ends

Why should every manager quote on the same scope?

Three proposals are only useful if they respond to the same service brief. One manager may quote a low base fee but charge separately for meetings, certificates, insurance claims, debt recovery, renovations and project work. Another may include more services in a higher base fee. Provide each candidate with the same scheme information and ask them to complete the same comparison schedule. This produces a more reliable like-for-like assessment.

A useful request-for-proposal brief should include:

• Number and type of lots
• Annual budget and levy income
• Number of committee and general meetings expected
• Building facilities and major assets
• Current contracts and insurance arrangements
• Known defects or major works
• Levy arrears and disputes
• Reporting, portal and communication expectations
• Required start date and handover support

What if only one suitable manager is available?

The absence of three suitable proposals does not automatically prevent an NSW owners corporation from appointing a strata manager. The committee should document the steps taken, including managers contacted, reasons for declining, geographical limitations, specialist requirements or urgency. Owners should still receive the available proposal, fee schedule, service scope, conflict disclosures and draft agreement before voting.

What if the appointment is urgent?

An urgent transition may occur when the current manager resigns, becomes insolvent, loses a licence or stops providing essential services. Urgency can justify an accelerated proposal process, but it does not remove the need for proper owners corporation authority and a clear written agreement. Where practical, consider a shorter initial appointment or an agreed review point rather than locking the scheme into a long contract without adequate due diligence.

Can we renew the current manager without seeking quotes?

There is no general NSW rule requiring exactly three proposals every time an appointment is renewed. However, renewal is an opportunity to review performance, fees, service levels, contract terms and alternative providers. A well-governed scheme may conduct a market review before a major renewal, particularly if owners have raised concerns, costs have increased or the current contract is ending after several years.

Should we choose the cheapest of the three?

No. The lowest fee is not automatically the best value. Poor communication, excessive manager workload, hidden additional charges or weak maintenance oversight can cost the scheme more than the initial fee saving. Owners should assess total cost, capability, availability, transparency and contractual flexibility.

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What records should the scheme keep?

• The request for proposal or service brief
• All proposals received
• A comparison matrix
• Interview notes and reference checks
• Conflict and commission disclosures
• The draft management agreement
• The general-meeting notice and motion
• The voting result and minutes
• The signed agreement and licence details
• The reason fewer than three proposals were considered, where relevant

Key takeaways

• There is no general NSW law requiring exactly three quotes before appointing a strata manager.
• NSW Government guidance recommends comparing at least three proposals.
• The recommendation helps owners test value, service quality and relevant experience.
• Three insurance quotations are a separate requirement when a strata manager arranges insurance, unless obtaining three is not possible and the reason is provided in writing.
• At least two independent quotations generally apply to NSW proposed expenditure over $30,000, subject to exceptions.
• An internal procurement policy or previous resolution may still require three management proposals.
• The owners corporation makes the formal strata manager appointment at a general meeting.
• All candidates should quote against the same scope.
• Total cost and service quality matter more than the lowest base fee.
• Keep the proposals, comparison, meeting papers and signed agreement with the scheme's records.

Related questions

Is obtaining three strata management quotes mandatory in NSW?

No. NSW law does not generally require exactly three proposals before appointing a strata manager.

Why should the owners corporation obtain three proposals?

NSW Government guidance recommends it to compare fees, experience, scope and value for money.

Who approves the appointment?

The owners corporation approves the strata managing agent at a properly convened general meeting.

What if fewer than three managers respond?

The scheme may still consider the available proposals, but should document its search and why a broader comparison was not practical.

Are three insurance quotes required?

Generally yes when a strata managing agent arranges insurance, unless the agent explains in writing why three quotations could not be obtained.

Are major repair quote rules different?

Yes. NSW proposed expenditure over $30,000 generally requires at least two independent quotations, subject to statutory exceptions.

Can we appoint a strata manager after receiving only one proposal?

Potentially yes in NSW, provided the appointment follows the correct owners corporation process and no internal rule requires additional proposals. Document why only one suitable proposal was available.

Is comparing three managers still recommended?

Yes. NSW Government guidance recommends comparing at least three proposals to assess value for money and experience with similar schemes.

Can we simply choose the cheapest proposal?

You can consider price, but the lowest base fee may exclude important services. Compare total cost, capability, workload, communication and contract terms.

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