Common property service agreements: are your contractors still the right fit?
Great committees are proactive committees
Strong committees don’t just respond to issues as they arise they stay engaged with the services that support their building and protect their property value.
Common property service agreements often run in the background. A contractor attends, an invoice is issued, and the cost is absorbed into the Owners Corporation budget. When services are reliable and well managed, this can work well. However, without regular oversight, outdated terms, unclear scope or increasing costs can go unnoticed.
A proactive committee uses periodic reviews to stay informed, ask the right questions and ensure arrangements remain appropriate.
Why should Owners Corporations review service agreements each year?
A review provides a structured opportunity to check whether agreements are still delivering what was intended.
Rather than focusing only on cost, a review enables committees to:
- Maintain visibility over contractor performance and service delivery
- Support clearer communication and expectations between the Owners Corporation and its contractors
- Identify issues with scope, pricing or reporting before they become larger problems
- Provide confidence that current arrangements remain appropriate and well managed
- Support informed budgeting and financial planning
- Demonstrate a clear record of oversight and due diligence
Recording the outcome of these reviews supports good governance and helps ensure decisions remain clear and well understood, even as committee members change over time.
What kinds of service agreements should committees focus on?
Most Owners Corporations have a small number of recurring agreements, which generally fall into two categories.
- Compliance-critical services
These include services linked to essential building safety and systems such as lifts, fire services and other equipment requiring ongoing inspection or maintenance. - Operational services
These include recurring services such as cleaning, gardening, waste management, garage doors, gates, pumps and ventilation systems.
The mix of services will vary between buildings. A smaller property may have only a few agreements, while a larger development may have a broader range of systems. The key is that the Owners Corporation understands what services exist, who is responsible for them, and whether they are being delivered as expected.
What should a contractor performance review include?
A proactive committee looks at performance before price.
Lower-cost agreements can prove more expensive over time if services are missed, reporting is unclear or additional charges arise for items assumed to be included.
A practical review considers whether the contractor:
- attends in line with the agreed schedule
- completes the agreed scope of works
- communicates clearly and responds to issues
- provides appropriate service reports or certificates
- identifies and manages defects effectively
- invoices align with the agreed pricing
The review should also consider whether the agreed scope continues to reflect the building’s current needs and whether any changes are required.
For compliance-related services, record keeping is particularly important. Clear documentation supports effective oversight and provides evidence that the building is being managed responsibly.
When should an Owners Corporation test the market?
Proactive oversight does not mean changing contractors unnecessarily.
However, there are times when comparing options can be appropriate, such as:
- when an agreement is approaching renewal
- where pricing has increased over time without explanation
- where communication is unclear or ongoing issues are not being resolved effectively
- where service quality has declined and the contractor has failed to remedy the issue
- where the scope is confused or has changed over time
- after upgrades or changes to building systems
A fair comparison starts with a clear scope. Agreements should outline what is included, how often services are provided, what reporting is expected and how additional works are handled.
The goal is not simply to find a lower price, but to ensure the agreement delivers the right balance of service reliability, compliance support and value.
How can smaller Owners Corporations keep the review process manageable?
Being proactive does not need to be complicated.
For smaller Owners Corporations, a simple annual checklist can be sufficient:
- When does the agreement expire?
- Are servicing terms consistent with the agreement (including scheduled visits, works and costs)?
- Have reports been submitted and all identified defects resolved?
- Do we have confidence in the current arrangement and the reliability of our contractor?
This keeps the process proportionate while still providing meaningful oversight.
How can your MBCM Strata Manager can assist with reviews and service agreements?
Where additional support is helpful, your MBCM Strata Specialist can assist with coordinating reviews, clarifying scopes and obtaining quotations when appropriate. They can also help confirm that contractors hold appropriate insurances, licences and safety credentials, where this forms part of the agreed services.
Great committees don’t take a set-and-forget approach to service agreements
By maintaining a simple, regular review process, they ensure common property services remain appropriate, reliable and aligned with the building’s needs, supporting better outcomes for all owners.