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⚖️ Is Your Strata Management Agreement Really Just the Base Fee?

🏢 A new Queensland decision raises important questions for strata committees across Australia

When a strata company appoints a strata manager, most owners naturally look at the annual management fee.

But what if that's only part of the story?

A recent Queensland adjudication—Bayview Shores [2026] QBCCMCmr 202—has highlighted an important governance issue that every strata committee, council member and strata manager should be aware of. While this is only an interim decision, it raises significant legal questions about whether the true cost of a strata management agreement extends well beyond the advertised base fee.



📋 The Background

At the scheme's Annual General Meeting, owners approved a two-year strata management agreement based on a management fee of:

💰 $110 per lot + GST per annum

On the surface, the contract appeared to be below the scheme's major spending limit, meaning only one quotation was presented to owners.

However, the applicants argued that the agreement also included a range of additional chargeable services and disbursements.

When these foreseeable costs were included, they claimed the total value of the agreement exceeded the statutory spending threshold—meaning at least two quotations should have been obtained before owners voted.

💡 Looking Beyond the Headline Fee

One of the most interesting aspects of the decision is the adjudicator's focus on the real cost of engaging a strata manager.

Although the annual management fee was fixed, the agreement also allowed for additional services to be charged separately.

Importantly, these weren't simply hypothetical costs.

The body corporate had already budgeted significant amounts for additional management services, suggesting these expenses were expected rather than exceptional.

📊 The Numbers Tell the Story

According to the decision:

✅ Base management fees over two years:Approximately $24,400

➕ Additional management services budgeted:Around $15,000 per year

📑 Disbursements budgeted:Over $7,000 per year

📈 Estimated total contract value:Approximately $66,000 over two years

🚨 Major spending limit:$30,300

This was more than double the applicable spending threshold.

⚖️ What Did the Adjudicator Say?

Importantly...

The adjudicator did not decide that the legislation had been breached.

Instead, they found there was a serious legal issue worthy of further investigation because there is a genuine argument that reasonably foreseeable additional management fees should be included when determining the cost of the proposed engagement. 

That means the final decision could have significant implications for how strata management agreements are assessed.

🤔 A Bigger Question...

Perhaps committees shouldn't simply ask:

💬 "What's the annual management fee?"

Perhaps they should also ask:

✔️ What additional services are likely to be charged?

✔️ What do previous years' invoices show?

✔️ What has been budgeted for additional services?

✔️ What is the likely total cost over the full contract term?

Because ultimately...

Owners pay the total cost—not just the base fee.

👀 Transparency Matters

Another interesting observation from the adjudicator was whether presenting only the base management fee may have been misleading if the committee already knew the likely total cost would be substantially higher.

Owners deserve enough information to compare competing management proposals on a genuine "apples with apples" basis.

Transparency leads to informed decisions—and informed decisions are at the heart of good strata governance.

🏢 What Can Committees Learn?

Before recommending or approving a management agreement, committees should consider:

📌 Looking beyond the advertised management fee

📌 Reviewing the schedule of additional charges

📌 Looking at historical invoices

📌 Considering the likely total cost over the life of the agreement

📌 Ensuring owners receive sufficient information before voting

💭 Final Thoughts

This decision does not establish new law—at least not yet.

However, it raises an important question that every strata committee should consider:

Is the true cost of a strata management agreement the annual management fee... or the total amount owners are likely to pay?

If the final determination supports the adjudicator's preliminary observations, it could influence how strata management agreements are evaluated and whether multiple quotations are required when the anticipated total cost exceeds legislative spending thresholds.

👀 This is certainly a case worth watching.




 
 
 

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