A body corporate in Ivanhoe contacted our office with growing concerns about rising fees, unclear reporting and uncertainty about whether they were receiving fair value from their manager.
Managing a multi-unit building is already complex, and with around 30 lots split across two separate body corporates, their financial picture had become even harder to interpret.
To understand what they were truly paying for, the Committee asked us to review their financial statements and provide independent guidance.
What we uncovered revealed far more than they expected and set the foundation for a more transparent and better value management arrangement.
Key Takeaways:
- The review uncovered hidden costs and inconsistencies that showed the Committee was paying more than expected. It made clear the need for better transparency.
- A detailed assessment and tender secured a new manager with $7,240 in savings. The Committee gained clearer oversight and better value.
- The process showed how regular reviews can reveal unnecessary costs and lift service standards. Committees can ensure fees stay fair with a transparent check.
Identifying the initial concerns and rising management costs
The Committee first reached out after noticing inconsistencies in their financial statements and rising annual expenses.
With the building operating under two separate body corporates, two sets of accounts were being maintained, which made it difficult for volunteer Committee members to understand the true cost of management.
Once we began reviewing the financials, the picture became clearer. When both statements were considered together, the total annual cost of management became apparent at almost $30,000.
The statements below show how these fees were spread across the two entities.
During the review, we identified several issues that raised concerns about transparency and value.
These included inflated equipment hire charges passed back to the body corporate, disbursements that were difficult to justify and inconsistencies between the two financial statements.
Together, these findings confirmed the Committee’s view that their current management arrangement lacked the clarity and accountability they expected.
Assessing the building to understand its management needs
Before exploring alternatives, we undertook a comprehensive assessment of the property and its operational requirements. This included:
- meeting onsite with the Chair
- walking through the common property
- reviewing the plan of subdivision
- documenting maintenance issues and historical concerns
- clarifying the governance structure of the two body corporates
This groundwork ensured that any prospective management company would be assessed against a clear and accurate scope of work.
Running a structured tender to compare management options
With the building’s needs clearly defined, we prepared a detailed scope of services and initiated a competitive tender. We invited multiple qualified management companies, including firms with experience managing multi body corporate arrangements.
Once submissions were received, we met with the Committee to review each proposal side by side and compare the following:
- annual management fees
- disbursement schedules
- service inclusions
- communication and reporting practices
- relevant experience with similar buildings
The differences between providers were significant.
Achieving meaningful cost savings and improved value
Through a structured review and tender process, the Committee achieved significant annual savings, clearer financial oversight, a manager aligned with their expectations and improved long-term value for all owners.
This result shows how periodic reviews can help Committees confirm whether their current arrangements still meet their needs, especially when dealing with multiple entities or complex financial structures.
For the Committee, these comparisons confirmed that the existing fees were out of step with industry norms and that better value was readily available.
Securing better service standards with a new management partner
While cost was an important consideration, the Committee also placed value on stronger service standards.
Through the review process, they gained a clearer understanding of what a well-structured management appointment should include, such as:
- transparent financial reporting
- proactive maintenance coordination
- clearer communication channels
- predictable disbursement costs
- accountability in service delivery
These factors, combined with the significant savings, gave the Committee confidence that transitioning to a new manager would support the long-term health and value of the building.
Is your body corporate paying too much?
Committees often wonder whether their management fees reflect fair value, particularly when financial reporting is difficult to interpret or costs appear to be increasing without clear explanation.
If your Committee is questioning its current arrangements or would like greater visibility over fees and services, a structured review can provide the clarity you need.
Contact us for a free consultation to learn how we can help your building achieve stronger oversight and better value.
