In the 1994 absurdist comedy Dumb and Dumber, two dumb but well-meaning friends set out on a cross-country trip to return a briefcase full of money to its owner, thinking it was abandoned as a mistake though it was actually left as a ransom.
Today, I’m wondering whether strata is imitating that comedy film.
An innocent looking survey & gift cards
That’s because SCA NSW and CHU seems to have decided, in the midst of the unresolved 2024 Strata Insurance Crisis, that they’ll just gratuitously offer strata managers another opportunity to get a monetary benefit from a strata insurer that creates a cascading series of dilemmas for the strata managers.
On 1 July 2024, SCA NSW invited its strata manager members to participate in an online survey from CHU about their customer strata buildings’ attitudes to maintenance and risk mitigation issues via the Survey Monkey platform and to win one of two $250 gift cards.
You can find and participate in the CHU survey here.
I’ve completed the CHU survey [since it’s not IP or log in secured] and I hope to win a gift card and keep it, since I’m not a strata manager.
Why does it matter for SCA NSW, CHU and strata managers?
You might think that no one cares about this as it’s only a limited survey, it’s only two gift cards, and most survey participants won’t win it anyway.
But that would be symptomatic of the blind thinking in the strata title sector that has led to the current crisis over conflicts of interests, undisclosed benefits and commissions for strata managers.
Here’s 11 issues and consequences of the CHU and SCA NSW gift card offer that I can easily see arise.
1. It’s a breach of the Strata Schemes Management Act 2015 provisions about receiving gifts.
Section 57(2) prohibits strata managers from requesting or accepting a gift or other benefit for themselves or anyone else unless the gift or benefit is disclosed in the strata management agreement, it was training and disclosed under section 60, or it is less than $60 [as provided in schedule 1(21) of the regulations]. A ‘gift’ is defined in the Electoral Funding Act 2018 and includes the CHU gift cards.
So, it looks like there might be a few lucky strata managers in breach of the strata title laws if they participated.
2. It’s a breach of the Property Stock and Business Agents Act 2020 provisions about receiving gifts.
Section 53F prohibits strata managers from requesting or accepting a gift or other benefit unless the gift or benefit is less than $60 [as provided in regulation 63]. A ‘gift’ is defined in the Election Funding, Expenditure and Disclosures Act 1981 and includes the CHU gift cards.
So, it looks like there might be a few lucky strata managers in breach of their licensing laws if the participated.
3. The offer of gift cards to strata managers by CHU will require recording by licensees in charge of strata management businesses under rule 2.5.2.2 of the new NSW Fair Trading Supervision Guidelines which I wrote about in the Article NSW Strata Managers need More Supervision.
The rule says that strata management business must keep:
‘a register of gifts and benefits accepted or declined while carrying out functions as a licensee or certificate holder, as well as details of the nature and value of the gift or benefit and who made and received the offer’.
And ironically the CHU gift card offer was made on the first day the new Supervision Guidelines started [1 July 2024] so they either did it on purpose or [even worse] they and SCA NSW had no idea.
So, will every strata licensee member of SCA NSW now record the CHU gift card offer details in their business records for NSW Fair Trading?
4. It’s probably a breach of Rule 2.1(E) of the SCA Code of Conduct by strata managers as a ‘reward’ that exceeds the amount agreed for management of strata buildings by the strata management agreements.
So, will [or should] SCA’s new independent chair of their Professional Standards and Membership Board Advisory Group, Stephen Phillips, who I wrote about in the Daily Post, There’s a New Chair at SCA Australasia for Complaints, take this up as a code complaint against the participating strata manager members and/or CHU?
5. It’s a breach of the strata manager’s fiduciary duties to the strata buildings they manage to receive a benefit or reward in the course of their role as an agent which they cannot keep without those strata buildings’ fully informed consent. Otherwise strata managers must give that benefit or reward to the strata buildings.
So, will the two strata mangers that win the gift cards transfer the $250 to all their managed strata buildings?
6. Is it really worth all this actual and potential trouble for strata managers that the CHU survey offer creates, just for a chance to win a $250 gift card?
7. It’s pretty tone deaf by SCA NSW to promote a supplier gift to members whilst they’re simultaneously trying to demonstrate sensitivity to the very real problem of conflicts of interest and undisclosed benefits from suppliers amidst ABC News investigations and NSW Fair Trading proposals to impose stricter controls on strata managers which they just said they support as I wrote about in the Daily Post SCA has its Say.
8. It’s also tone deaf by CHU to keep offering money to strata managers to get them to do what CHU wants [in this case give them insight into what strata buildings think and want]. That’s especially so given that CHU is responsible for paying more strata insurance commissions to strata managers in Australia than any other single entity.
9. It suggest association capture of SCA NSW by its major sponsor to the detriment of its core membership. I don’t think that really needs explanation.
11. It’s also pretty cheapskate from CHU when they’re getting valuable business insights from lots of strata managers about their strata buildings to improve CHU’s business bottom line, and all they’re offering them is $500.
And, funnily enough, if CHU [or SCA NSW] were smarter they could have saved $392 dollars and most [but not all] of these consequences by only offering strata managers two $59 gift vouchers instead.
Conclusions
So, I’m sorry to say that it’s pretty dumb.
I just don’t know which of SCA NSW or CHU is the dumb or dumber one.
C'est la vie en strates.
0July 04, 2024
Francesco