How to Read a Strata Management Proposal: A Committee's Guide

How to Read a Strata Management Proposal: A Committee's Guide

What this guide covers

• Most Australian strata management agreements follow a standard schedule structure issued by the Strata Community Association (SCA). Once you understand the structure, every proposal becomes readable.
• Schedule A is the fixed retainer for routine work. Schedule B is the variable, pay-as-you-go work. Schedules C and D cover disbursements and commissions. The names differ by jurisdiction but the structure is broadly consistent.
• Headline price comparison is misleading. Schedule structure comparison is what tells you what the building will actually pay.
• Most fee structures are reasonable for what they cover. The committee's job is not to assume otherwise — it is to make sure the proposal accurately reflects the building's needs and the manager's intended scope.

If your committee is reviewing a strata management proposal — whether at first appointment, at renewal, or while comparing options — it is worth taking the time to read the agreement properly before voting. Strata management agreements look complex on first reading because they are designed to cover a wide range of buildings, scenarios, and fee structures in a single template. Once you understand how the template works, comparing proposals becomes much more straightforward.

This guide is constructive, not adversarial. The vast majority of strata managers are professionals operating to industry-standard agreements, and the schedule structure exists for good reasons: it lets the committee see what is included in the base fee, what costs extra, and what is passed through at cost. Most disputes between committees and managers come not from the agreement itself but from one side or the other not having read it carefully at the start.

The audience here is committees evaluating proposals. The audience is not strata managers, who already know all of this. If you are on a committee and the words "Schedule B" make your eyes glaze over, this is the guide for you.

The standard agreement structure

In NSW, most reputable strata management agreements use the Strata Community Association NSW standard agency agreement, last refreshed in 2024. In Queensland, body corporate management agreements typically use a similar structure issued through PICA Group templates and SCA QLD. Victoria and other states have their own variants. The names of the schedules differ, but the underlying logic is broadly consistent across jurisdictions.

The 2024 SCA NSW agreement structures fees into the following parts:

Schedule A — agreed services fee. A fixed annual retainer for the routine work of running the owners corporation. This is the figure most committees look at when comparing proposals, and it is the smallest part of the picture.

Schedule B — additional services. Variable, pay-as-you-go charges for work that falls outside the agreed services. Charged when the work happens, on the basis set out in the schedule.

Schedule C — disbursements. Out-of-pocket expenses incurred while performing the agreement: postage, printing, search fees, and similar pass-through costs.

Schedule D — commissions and other income. Commissions the manager receives from suppliers (most commonly insurance brokers) and the basis on which they are retained, split or passed through.

Schedule 1 — delegated functions. A list of which owners corporation functions the manager is being delegated to perform. This is structurally separate from fees, but worth reading carefully because it determines the actual scope of the manager's authority.

In Queensland, under PICA-style body corporate management agreements, the same logic appears under different schedule letters: Schedule A is the reference schedule (term, fees, payment, review percentage), Schedule B contains the agreed services fees, Schedule C contains the additional services pricing, Schedule F is the agreed services list and Schedule G is the additional services list.

The point is the structure, not the labels. Every reasonable strata management agreement separates fixed routine work from variable additional work from pass-through costs from third-party income. Once you have understood that, you can read any agreement in any state.

Schedule A: the agreed services fee

Schedule A covers the predictable, routine work of running the scheme. The standard SCA NSW list typically includes:

• Convening and minuting the AGM and statutorily required committee meetings
• Maintaining the strata roll and updating it for changes of ownership
• Issuing levy notices on the agreed schedule
• Receipting and banking levies, and providing financial statements
• Maintaining the trust account and producing audited statements where required
• Maintaining records the legislation requires the corporation to keep
• Issuing routine correspondence and responding to standard owner queries
• Renewing standard insurance policies on instruction
• Producing the certificate required when a lot is sold (Section 184 in NSW; equivalent in other states)
• Standard compliance reporting (NSW Strata Hub, equivalent in other jurisdictions)

The annual fee is typically expressed in two forms: a per-lot rate and a total. The per-lot rate is useful for comparison; the total is what the building will actually pay.

What committees should check on Schedule A:

• Is the list of agreed services explicit, or does it refer to "standard management services" without listing them? Explicit is better. A short list invites Schedule B charges for work the committee assumed was included.
• Does the agreed fee include the cost of attending committee meetings, or only the AGM? Some agreements include only the AGM; others include a fixed number of committee meetings and charge Schedule B for additional ones.
• Is there an annual CPI or fixed-percentage review clause? What is the review percentage, and is it tied to a published index?
• For multi-year agreements, is the Schedule A fee fixed for the term, or reviewed annually?

None of these are red flags in themselves. They are points where committees and managers should agree expectations explicitly rather than discover them later.

Schedule B: additional services

Schedule B covers work that falls outside routine administration. Because no two buildings have the same operational profile, agreements use Schedule B to charge for the time required to handle issues that are genuinely additional rather than routine.

Common Schedule B items include:

• Additional committee meetings beyond those included in Schedule A
• After-hours work and emergency contractor coordination
• Debt recovery beyond standard reminders, including NCAT/QCAT applications
• Insurance claim management
• Major contractor procurement (fire upgrade works, painting, lift refurbishment)
• By-law drafting and registration
• Tribunal representation or attendance
• Special levy preparation and consultation
• Defects management and warranty claims
• Building dispute coordination
• Document research outside the routine reporting period
• Site inspections beyond an agreed annual frequency

Schedule B fees are usually expressed as either:

• An hourly rate (commonly tiered by who does the work — principal, senior manager, junior manager, administrative staff)
• A fixed fee per task (for example, a flat fee for an additional committee meeting)
• A percentage of contract value (for major contractor procurement)
• An hourly rate with a minimum charge (for example, six-minute units billed in 15-minute increments)

Schedule B is where two proposals with similar Schedule A fees can produce very different annual costs. A scheme that experiences plumbing defects, an active special levy, multiple by-law amendments, or a contested tribunal matter in a single year will see Schedule B charges that materially exceed the Schedule A fee.

This is not a sign of overcharging. It is the agreement working as designed: routine work paid at routine rates, additional work paid for the time it takes. The committee's responsibility is to anticipate which Schedule B items the building is likely to incur and to read the rates accordingly.

What committees should check on Schedule B:

• Is the rate sheet specific or generic? "Additional services charged at the manager's standard hourly rate" is too vague. The schedule should state the rate.
• Are minimum-charge units stated (per six minutes, per 15 minutes, per quarter hour)? This affects effective cost on short tasks.
• Are the most likely Schedule B items for your building priced? A scheme with a major capital works program coming up should pay attention to procurement-related rates; a scheme with active arrears should look at debt recovery rates.
• Are there caps for any Schedule B items? Some agreements cap individual task fees so a single matter cannot run unbounded.
• Is there a notification threshold above which the committee's prior approval is required? Many agreements include this; if yours does not, you may want to negotiate one in.

Schedule C: disbursements

Disbursements are out-of-pocket expenses the manager incurs while performing the agreement and passes through to the owners corporation. Common items:

• Postage and printing for owner notices
• Title searches when transferring lot ownership records
• Photocopying for AGM packs
• Bank fees on the trust account
• Travel where applicable to a specific task
• Couriers and registered post for tribunal-relevant correspondence

Disbursements should be at cost, not marked up. The schedule should state the cost basis clearly. Where digital alternatives exist (email instead of post; e-signing instead of registered mail), the committee can ask whether disbursements can be reduced by changing the delivery method for routine correspondence.

What committees should check on Schedule C:

• Is each disbursement described and priced individually, or is there a flat "disbursements fee" charged per lot?
• Are postage rates current? Some older agreements use rates that no longer reflect Australia Post pricing.
• Is digital delivery available where the legislation permits, and at what discount (or zero charge) compared to printed delivery?

Disbursement schedules are rarely a major cost item but they are often the schedule with the most legacy assumptions in it. A well-presented schedule has been refreshed in the last few years.

Schedule D: commissions

The 2024 SCA NSW standard agreement provides three options for how the manager handles commissions received from third-party suppliers (most commonly the building insurance broker, but potentially including utilities, contractors, and tribunals):

• Option 1 — Clause 3.3(a): Manager keeps 100% of commissions
• Option 2 — Clause 3.3(b): Manager keeps some commissions and passes others to the owners corporation, on a basis set out in the schedule
• Option 3 — Clause 3.3(c): All commissions passed to the owners corporation within 30 days

This is a structural choice the committee makes when entering the agreement, not a hidden practice. Each option is legitimate; each has implications for the headline fee. A manager retaining commissions can typically offer a lower Schedule A fee because part of their revenue comes from third parties. A manager passing commissions through tends to offer a higher Schedule A fee. The total cost to the building is comparable; the structure differs.

What committees should check on Schedule D:

• Which option has the proposal selected, and is that selection explicit?
• For Options 1 and 2, what commissions does the manager currently receive, in what amounts, from which suppliers?
• Is there an annual disclosure obligation in the agreement requiring the manager to report actual commissions received?
• For Option 3, what is the timing and mechanism for passing commissions through?

Disclosure is the critical thing here, not the option chosen. A committee that has read and understood Schedule D and chosen the option that fits their preferences has nothing to worry about. A committee that has not read it may be surprised later by something the agreement was always going to do.

For more on the commissions question specifically, the audit-your-strata-manager guide covers what disclosure should look like and how to read commission statements.

Schedule 1: delegated functions

Strictly not a fee schedule, but materially affects what the committee actually receives. Schedule 1 lists which of the owners corporation's statutory functions are delegated to the manager. Common delegations include:

• Issuing levy notices
• Maintaining bank accounts
• Engaging contractors below a specified value threshold
• Renewing insurance on instruction
• Issuing AGM and committee meeting notices
• Maintaining minutes
• Issuing Section 184 (or equivalent) certificates

Some functions cannot be delegated under the legislation. Setting contributions to the administrative or capital works fund, for example, must always be done by the owners corporation in a general meeting. The agreement cannot delegate that to the manager regardless of what the schedule says.

The committee should review Schedule 1 carefully to understand what authority the manager has and what authority remains with the committee. A common source of friction is a committee believing it has retained more authority than it has, or vice versa.

Comparing two proposals on a like-for-like basis

When the committee receives proposals from two or three managers for the same scheme, the natural instinct is to compare Schedule A fees and choose the lower one. This produces the wrong answer often enough that it is worth doing the comparison properly.

A like-for-like comparison framework:

Two points where this comparison framework changes the answer.

The "low Schedule A, high Schedule B" pattern. Some proposals offer a competitive Schedule A and recover margin through Schedule B. This is not inherently wrong; the question is whether the recovery rates are realistic for your building's likely usage. A scheme with active defects, an upcoming capital works program, or a recent change of by-laws will use more Schedule B than a stable, owner-occupied scheme.

The commission-vs-base-fee tradeoff. A proposal selecting Option 1 (manager retains commissions) and offering a lower Schedule A fee is structurally equivalent to a proposal selecting Option 3 (commissions passed through) and offering a higher Schedule A fee. The total effective cost to the building can be similar; the optical headline differs. A committee comparing the two needs to model both into a single number.

A useful exercise: ask each proposing manager for an estimate of what the building paid in total fees in a recent comparable year. This produces an actual annual number rather than a schedule-based theoretical one. If the manager cannot or will not produce this, that itself is informative.

The questions to ask before signing

A short list of questions the committee should be confident asking at proposal time, regardless of how good the proposal looks on paper. These are not adversarial questions; they are the questions that lead to a stable long-term relationship rather than the kind that drifts into renegotiation or termination.

On scope.

• What is included in the Schedule A fee, in plain language?
• Which committee meetings are included, and which are charged separately?
• Where is the boundary between Schedule A and Schedule B for borderline cases (a short query about an arrears notice; a quick contractor briefing call)?

On rates.

• Who in the firm will actually do our work, and at what rate?
• What is the minimum-time billing unit?
• What is the typical Schedule B annual cost for a building of our size and type?

On disclosure.

• Which Schedule D commission option is the proposal under?
• Will we receive an annual disclosure of commissions actually received?
• Is the broker or supplier list disclosed at proposal time?

On termination.

• What are the termination terms on each side?
• What is the records-handover process, and at what cost?
• Following the October 2025 NSW reforms, what is the firm's view on the new NCAT termination powers and how do those interact with this agreement?

On the relationship.

• How often will we meet outside formal committee meetings?
• Who do we contact for routine queries versus urgent issues?
• What KPIs would the firm be comfortable being measured against in our annual review?

The right answer to all of these is "explicit and in writing". Most disputes come from a verbal understanding at proposal time that did not make it into the schedule.

Variations to the standard agreement

The Owners Corporation Network of Australia (OCN) published a detailed user guide to the standard agreement in 2021, which remains a useful reference. The guide highlights variations that owners corporations have negotiated into their agreements over the years, including:

• Limits on commission retention beyond the standard schedule options
• Alternate review-percentage clauses tied to specific indices
• Protections against transfer of the agreement without consent if the agency changes ownership
• KPI clauses tied to customer satisfaction surveys, complaint resolution rates, or building cost benchmarks
• Mechanisms for varying the schedule selection during the term of the agreement

Variations are not unreasonable to request. Both sides benefit from an agreement that fits the specific building rather than a strict template. A manager who refuses to discuss any variation is unusual; a manager who treats the negotiation as a normal part of forming the relationship is the norm.

The OCN guide is worth reading before serious negotiation. It is written from the owners corporation perspective but accurately reflects what working strata managers also expect to see at the table.

When a proposal looks suspicious

Most strata management proposals are honest, professional documents. Occasionally one is not. Patterns that should make a committee slow down:

Schedule B rate sheets that are missing or generic. "Additional services charged at the manager's prevailing hourly rate from time to time" is not a rate sheet. It is a blank cheque.

No commission disclosure at proposal time. Under the SCA standard agreement, the committee can ask which option is being selected and what the manager currently receives. A refusal to disclose at proposal time is a flag.

Termination terms that materially advantage the manager. Standard terms are roughly symmetrical (30 days both sides). Significantly longer notice periods on the OC's side, or transfer-without-consent clauses that allow the agency to change hands without the building's agreement, are worth negotiating.

Pressure to sign at the AGM. A committee should be able to take the proposal away, read it carefully, and respond. Pressure to sign in the room is unusual.

Unwillingness to provide references. A new agency might reasonably have few references; an established one should be able to provide several.

These are slow-down signals, not adversarial accusations. The right response is to ask more questions and take more time, not to assume bad faith.

How UnitBuddy fits

UnitBuddy is not a strata manager and is not a substitute for one in buildings that need or want professional management. We are the operations layer that supports the manager-committee relationship: a permanent record of decisions, contractors, compliance, finances and correspondence that survives any change of agency.

A well-run strata management arrangement looks like a working partnership: a competent manager performing the agreement they signed, a competent committee holding their own records, and both sides agreeing the proposal accurately reflects the building's needs. UnitBuddy supports the second half of that — the committee's records and the building's institutional memory — so that the manager's work is visible, accountable, and durable across staff changes on both sides.

Buildings with a strong manager benefit from UnitBuddy because it makes the manager's work transparent to the whole committee, not just the treasurer. Buildings considering a change of manager benefit because the building's records are in the building's own platform, not the outgoing manager's. Buildings considering moving to a hybrid or self-managed arrangement benefit because UnitBuddy is what they take with them.

If your committee is preparing to evaluate a proposal — first appointment, renewal, or comparison — the worked examples in our Schedule B fees explainer and strata insurance commissions guide cover the technical detail behind specific schedules. Our how to change strata managers guide covers the mechanics if you do decide to change. And the self-managed strata complete guide covers the option of running without a manager altogether.

Most committees, after going through this process, conclude that their existing or proposed manager is delivering good value for what is in the agreement. A small number conclude otherwise. Either result is a useful one — the value is in having read the agreement properly, and in having a clear basis for the decision.