One of the most consistent gaps in commercial property management sits in the relationship between the Commercial Property Manager (CPM) and the Owners Corporation or Body Corporate (OC/BC) manager.
It’s not a minor issue. It goes directly to risk, compliance, insurance and ultimately the performance of the asset.
And the reality is this: too often, there is an assumption that the OC manager “looks after the building”. That assumption is where problems start.
Start with what you are actually managing
As a CPM, you are not managing a building. You are managing a lot within a building.
That distinction matters.
Because unless you clearly understand:
- What forms part of the lot
- What sits within common property
- And how responsibilities are split
You are relying on assumption rather than structure.
In Victoria, this always comes back to the plan of subdivision. Not how the building presents. Not what someone has told you. The plan.
OC Manager vs CPM – different roles
The OC/BC manager is engaged to manage common property on behalf of all owners.
That typically includes:
- Building structure
- Common areas such as corridors, lifts and car parks
- Shared services and infrastructure
- Building insurance arrangements
The CPM, acting for the landlord/lot owner, is responsible for:
- The lot itself
- Lease compliance
- Tenant obligations
- Day-to-day risk within the tenancy
- Protecting the income stream
The roles intersect. But they are not interchangeable.
Essential Safety Measures – where confusion creates exposure
A common misunderstanding is that all Essential Safety Measures (ESMs) are managed by the OC. That is not always the case.
Generally:
- The OC manages ESMs relating to common property
- The lot owner, and by extension the CPM, must ensure obligations relating to the lot are understood and managed
In practice, some systems may be centrally managed, while others sit within the tenancy or are tied to lease obligations. The key issue is not who you think is responsible. It is what is actually documented. If this is unclear, then compliance, maintenance and record-keeping can easily fall into a gap.
Insurance – understanding the structure without assuming coverage
In a strata environment, there are typically multiple layers of insurance operating at the same time. A CPM should understand how these layers interact, but should not assume coverage or provide advice on adequacy.
Owners Corporation insurance generally relates to:
- Building structure
- Common property
- Public liability for common areas
This does not automatically extend to all risks associated with a tenancy or the lot.
Lot owners should be encouraged to seek advice from their insurance broker or adviser in relation to:
- Risks within the lot
- Income-related exposures
- Fixtures, fittings or improvements within the tenancy
Tenant insurance requirements should be clearly set out in the lease, with the CPM ensuring:
- Evidence of cover is obtained
- Policies align with lease obligations
- Renewals are monitored and recorded
The role of the CPM is not to advise on insurance products, but to ensure that:
- Requirements are clear
- Documentation is held
- Follow-up is consistent
The operational gap
This is where things tend to fall over:
- Assuming the OC covers more than it does
- Lack of clarity around ESM responsibilities
- Insurance requirements not aligned with the lease
- No documentation held on file
- Verbal confirmation relied upon
It is not unusual. But it is high risk.
Attending OC meetings – authority matters
Another practical consideration is whether the CPM attends OC meetings on behalf of the owner. This may occur, but only where there is clear authority.
Questions to consider:
- Is there written authority from the owner to act as proxy?
- Is this role included within the managing authority?
- Are there fees associated with this service?
- What decisions, if any, can be made on behalf of the owner?
Attendance is one thing. Making decisions is another. Without clear instruction, a CPM should not be committing an owner to financial or strategic outcomes.
Professional indemnity – know your scope
Where a CPM is:
- Attending meetings
- Providing guidance
- Interpreting responsibilities
- Acting on behalf of the owner
It is important to understand whether this work sits within the scope of the agency’s professional indemnity insurance. This is not something to assume. It should be confirmed.
The practical reality
Effective commercial property management within an OC environment comes down to discipline:
- Understand the lot vs common property position
- Align lease obligations, compliance and documentation
- Be clear on what the OC manages and what it does not
- Maintain records
- Follow up consistently
Because most issues do not arise from a single major failure. They come from small gaps.
Final thought
This is not about technical knowledge for its own sake. It is about understanding where responsibility sits. Because in commercial property, it is rarely the obvious issue that causes the problem. It is the assumption. The missing document. The belief that someone else is taking care of it. That is where things unravel. And that is where capability shows.
Image Credit: Nimito
© Wendy Thomson – Australian Academy of Property Pty Ltd
This article is intended as general operational guidance only and does not constitute legal or insurance advice. Owners and tenants should seek advice from appropriately qualified professionals in relation to their specific circumstances
