Usually, no. The cheapest headline fee rarely reflects the total annual cost. Compare like-for-like proposals across inclusions, additional fees, response times, experience, financial controls and contract terms. A slightly higher fee often produces the lowest total cost and the best outcome for the scheme.
Strata management proposals are not always structured the same way. One manager may include most routine work in a fixed fee; another may advertise a low base fee and charge separately for meetings, correspondence, insurance work, records and projects. Compare the expected total annual cost — not the base fee alone — and weigh service scope, assigned-manager capacity, financial controls and contract terms alongside price.
A low base fee can quickly become expensive if common tasks are billed separately. Watch for extra charges attached to:
A fair comparison uses the likely total annual cost, based on the scheme's normal workload, rather than the advertised management fee alone.
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The base fee is the recurring amount charged for a defined package of management services. The total cost is the base fee plus every additional charge and financial benefit connected with the appointment — additional service fees, disbursements, insurance income, supplier benefits, major project fees and exit or handover charges.
Ask every shortlisted manager to complete the same pricing schedule using the same assumptions: number of lots, expected meetings, annual correspondence, levy notices, insurance work, major projects and records requests. This makes low base fees with high extras easier to identify.
Yes. A lower-priced proposal can provide excellent value when the service is efficient, the inclusions are clear and the manager is suited to the scheme. A small building with few facilities, stable finances, limited correspondence and an active committee may not need the same service level as a large high-rise with lifts, defects, complex contracts and full-time building staff.
The goal is not to avoid inexpensive managers. It is to confirm the lower price reflects an efficient operating model — not missing services, excessive workloads or charges that surface later.
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A higher fee is only justified when the additional capability, time and service are real, relevant and clearly described in the agreement.
Large portfolios per manager, heavy use of add-on charges, an unclear assigned manager, limited meeting allowances, vague response commitments, weak handover processes, no relevant scheme experience, unclear commission or supplier disclosures and restrictive contract terms all suggest the headline price hides real risk.
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A reputable company name is useful, but the individual assigned manager has the greatest impact on daily service. Ask to meet the person before appointment. Confirm their experience with schemes of similar size, age, facilities and current problems. Ask how long they have worked in strata management, what support staff they have and whether the proposed portfolio workload is sustainable. Request references from comparable buildings — but treat agency-selected references as one part of due diligence, not the whole check.
Licensing, registration and insurance requirements differ across Australia. Verify the company and the individual using the relevant state register before appointment.
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The management agreement — not the sales proposal — determines the actual appointment, duties, fees and exit process. Review it before owners vote. Look for a complete schedule of included and additional services, every fee and disbursement, delegated powers and spending authority, named service standards and reporting obligations, term and renewal mechanism, termination rights and breach process, record and fund handover, professional indemnity and liability provisions, conflict and commission disclosures and privacy, cyber security and data ownership terms.
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Managers may receive income or other benefits in addition to the base management fee — insurance commissions, training services or supplier-related benefits — depending on the state, agreement and approval process. Additional income is not automatically improper, but it must be transparent and should be weighed when comparing total remuneration and potential conflicts. Ask for written disclosure of all commissions, connected persons, referral arrangements and beneficial relationships, and confirm how procurement decisions will be made.
For many schemes, three proposals provide a useful market comparison. This is not a universal legal requirement, but multiple quotes help owners understand pricing models and service differences. In NSW, current government guidance requires two independent draft management agreements to accompany the AGM agenda where expected strata management fees exceed $30,000. Quality still matters more than quantity — two detailed, comparable proposals can be more useful than several vague prices.
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The illustrative table below shows why a higher base fee can produce a lower total cost when routine additional work is included. Actual fees and service needs vary.
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Management fees are one part of the scheme budget. Buildings often spend much more on insurance, cleaning, lifts, fire services, repairs, utilities, legal work and capital projects. A capable manager may help the committee obtain competitive contracts, maintain accurate records, reduce late fees, manage arrears, identify budget risks and progress repairs before damage becomes more expensive. A cheaper manager who performs poorly in these larger expense areas can increase overall levies rather than reduce them.
Compare written fee proposals from strata managers covering your building — free for owners corporations, no obligation.
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