Understanding Your Contract of Appointment (COA)

Guy Bowell
Apr 17
3 min read

When engaging a strata management company in Victoria, the Contract of Appointment (COA) is an essential document that governs the relationship between the Owners Corporation and the appointed manager. It outlines the services provided, associated fees, and responsibilities. To ensure you're working in the best interests of all owners within your Owners Corporation, understanding every aspect of your COA is critical—particularly the distinction between included services and additional fees.

What is a COA?

The Contract of Appointment is a formal agreement between the Owners Corporation and the strata manager, detailing the scope of management services, terms of engagement, and financial arrangements. This agreement ensures that all parties are aware of the expectations and obligations. This agreement between the Owners Corporation and the appointed manager can not be longer than 3 years as per Consumer Affairs Victoria which was added in December 2021.

Fees for Services: What’s Included?

Within the COA, the standard fees typically cover services essential to the daily management of the Owners Corporation. These services may include:

Conducting meetings such as annual general meetings (AGMs).
Preparing financial statements and budgets.
Organising repairs and maintenance of common property.
Communicating with owners and stakeholders.
Ensuring compliance with legislative requirements.

Be sure to carefully review the section outlining the included services, as this determines the baseline for what the manager is obliged to provide without incurring extra charges.

Additional Fees: Understanding Extra Costs

In some cases, strata managers may charge fees for services outside the standard scope outlined in the COA. These additional fees could include:

Emergency callouts for urgent repairs that require the manager's attendance.
Travel Time for site inspections, attending AGM or Committee meetings.
Legal services or dispute resolution assistance.
Arranging insurance claims or providing detailed insurance advice and commission payments.
Printing and mailing documents (e.g., meeting minutes or levy notices).
Administrative tasks exceeding regular management duties.

It's vital to check whether additional fees are clearly itemised in the COA, along with their corresponding rates. Transparency in this area prevents misunderstandings and ensures equitable treatment of all owners.

Ensuring the Best Interests of Owners

To ensure that the Committee acts in the best interests of all owners, consider these tips:

Review the COA Thoroughly: Pay special attention to terms related to fees, and services.
Seek Clarification: If any clauses appear ambiguous, request clarification or amendments to avoid surprises.
Monitor Performance: Regularly assess whether the manager is fulfilling their obligations and providing value for money. As a Committee, you could request to speak to other Committees that are under their management as a reference check.
Engage Owners: Hold discussions with fellow owners to ensure collective understanding and agreement on management practices. This isn't a requirement however, if the Committee know and speaks to other Owners within the building, it might be a good idea to have an open discussion with these owners and hear their thoughts on the options you have.

Conclusion

Understanding the COA is more than just ticking a box—it's about empowering owners to make informed decisions and maintain transparency within the Owners Corporation. By carefully analysing the fees for services and additional costs, you'll pave the way for fair and effective management that benefits everyone.

This guide aims to equip you with the insights needed to ensure compliance, transparency, and alignment with the best interests of your Owners Corporation.

Have questions or need further assistance? Let’s dive into the specifics together!