Insurance can be complex: The Value of a Strata Manager
Please find below a Link to an informative document on the value of your Strata and Community Title Manager being able to assist your Body Corporate with your Insurance needs. The Strata Manager is here to help on Insurance matters; such as claims processing, paying Contractor invoices on claims, arranging insurance valuations and providing reports to unit Owners, insurance record keeping, and general insurance needs such as quotes, purchases, placements and renewals.
This article and the information provided represents general advice and does not take into account any specific financial situations, objectives, or needs of an individual or Body Corporate/ Strata Corporation. Before you make any decision about whether to acquire a certain product, you should read the relevant product disclosure statement, policy wording and/or consult your Insurer
No property is guaranteed to not experience some sort of termite activity, so whether you own a house or are a Member of a Strata or Community Corporation, knowing some of the signs for termites and also some of the ways you can reduce the risks is very important.
Many Body Corporates will be on some sort of a termite inspection program, some using a system such Sentricon bating stations, others with a simple annual visual termite inspection.
As a Strata Manager, we will often have dealings with many White Ant inspection/ treatment companies, due to properties already having certain systems in place with a particular Contractor.
Remember that Termites will always invade from an outside source. Once located internally, prompt response is required to minimise damage. Being able to jump onto this issue as quickly as possible is vital. It is unlikely that there will be any relief provided under insurance for damages caused by termites.
If you are concerned about termites and Seeking advice on whether your individual property has had termite inspections or treatments and/ or whether something should/ could be instigated, contact your Manager for any details they may have regarding your unit complex and your particular Lot.
Reducing the Risks
Regularly check and maintain taps, hose lines and hot water services to ensure there areno leaks. Check both inside and outside the unit and around the common property
Routinely check gutters, downpipes and drains to ensure that they are clean and flowing properly away from the unit building
Make sure that all water from air conditioner units are correctly plumbed and that down pipes redirect water away from the unit
Don’t place woodchips/mulch in close proximity to the building or against walls.
Don’t place timber directly into the soil close to the buildings
Arrange regular termite inspection programs.
Know the signs for termite activity and watch for them (including training your Property Managers and Tenants on what to look for)
The Signs
Mud tubes: Mud tubes may look like a tail of mud or dirt. These trails indicate that the termites are present and active. Contact your Manager or Body Corporate contact immediately to seek assistance. It is likely that this activity is significant and prompt action is required to engage your current pest Controller or a new Inspector. Your Manager should have record of any ongoing inspection program or advise who can inspect.
Timber damage: Naturally the termites are hunting and eating timber. If you see damage similar to woodrot, cracks, blistering paint and dips in your timber floors, doors, window frames or walls you should undertake investigations. Remember to check other timber structures too such as pergolas or pale fencing.
Localised Power failures: Just as you might experience an issue with a rodent nibbling away at a power cable in your wall or ceiling, so too could termites be creating a localised power problem. Check for the signs above in the vicinity of any short circuit or disruption.
This article and the information provided represents general advice and does not take into account any specific financial situations, objectives or needs of an individual or Body Corporate/ Strata Corporation. Before you make any decision about whether to acquire a certain product, you should read the relevant product disclosure statement, policy wording and/or consult your Insurer.
In South Australia, The Developer has a legal obligation to set up the first statutory meeting of the Community group called the Inaugural meeting. Often the Developers engage a Management firm to prepare and run that meeting along with the recording of the minutes and setting up the group from that point forward to meet the Corporations on-going statutory requirements; such as forward budgets, bank accounts, sinking funds, etc.
Before a Community Manager facilitates the initial Inaugural meeting, there is a need for the Developer to provide information about the Corporation. This includes all statutory documentation as outlined in the Act. Below is the relevant section of the Community Titles Act 1996(link to Act) which outlines what the Developer must have ready for that meeting.
Some examples of information that is necessary for the incoming manager to build the budgets:
Is there any communal electricity? Such as lighting, elevators, etc
Is there any landscaping which will require routine maintenance?
Are there common items such as heating or cooling for common area, or shared between individual units?
What is the required levels of insurance:
Is the group insured collectively; all buildings and common land?
Are the units individually insured but require common property cover which includes common power, fencing, driveways, gates, etc
Is there any ongoing cleaning requirements?
Is there a common water meter, individual meters? Or a single meter with third party water readers installed for measuring the use of each unit?
Is there a need for ongoing fire system maintenance and inspections?
Any common facilities such as Elevators, pools, gyms or other communal spaces?
Are there communal Hot water systems? Or embedded networks
What are the Community group By-laws, Scheme description and plans. Importantly for the budget, what are the unit entitlements on the entitlement page of the plans.
Engaging a Community Manager early, with the necessary information will allow that Manager to support the Developer by building proper forward budgets which they can present to potential purchasers. A genuine budget with clear ongoing costs will mean that each purchaser has a clear understanding of what they are purchasing and the ongoing costs involved. Poor budgets, or a lack of understanding from purchasers before buying a new development can create much confusion and frustration for the new Owner and the Developer in remedying these matters later.
The Manager can also assist with the setting up of these insurance policies, contractor contracts and provide a source of knowledge to those coming into the group, so that they feel supported in their purchase.
Developers aren’t just building a multi-dwelling property, they are developing a Community. Just as the property requires the proper foundations, so too does the Community. When these foundations are done well, this community of Members (Lot and unit Owners) will flourish and fully enjoy their new homes, and be thankful for it.
If your Developer did not set up your Inaugural meeting, contact STRATARAMA to discuss the next steps in laying the foundations for your group. If you are Developer, commencing a new project, consider the above, and how we might help you prepare for leaving the project and the new Purchasers with the right start!
Division 2—General meetings
79—First statutory general meeting
(1) The developer must convene a general meeting of the community corporation within 3 months after the day on which there are at least 2 different members of the community corporation (not including the developer or any person who the developer knows, or ought reasonably to know, is an associate of the developer).
Maximum penalty: $15 000.
(2) A member of the corporation may convene the meeting required under subsection (1) if the developer fails to do so.
80—Business at first statutory general meeting
(1) The developer must deliver to the corporation at the first statutory general meeting—
(a) a copy of the plan of community division deposited in the Lands Titles Registration Office which shows the service infrastructure by which the lots and common property are provided with water, gas, electricity and other services; and
(b) a copy of—
(i) the scheme description (if any); and
(ii) the by-laws; and
(iii) the development contract or contracts (if any), filed by the Registrar-General with the deposited plan; and
(c) a copy of specifications, diagrams and drawings relating to the buildings or other improvements (if any) on the community parcel; and
(d) the duplicate certificate of title for the common property; and
(e) all policies of insurance taken out by the developer; and
(f) a statement of the corporation’s assets and liabilities; and
(g) an expenditure and contribution statement complying with section 113; and
(h) books of account and other records relating to the corporation; and
(i) the corporation’s common seal; and
(j) a copy of all other documents in the developer’s possession that are likely to be of use to the corporation.
Maximum penalty: $15 000.
(2) The following matters must be addressed at the first statutory general meeting—
(a) the appointment of the presiding officer, treasurer and secretary;
(b) the custody of the corporation’s common seal and the manner of its use;
(c) the corporation’s recurrent and non-recurrent expenditure in its first financial year and the amount to be raised by contributions from owners of community lots to cover that expenditure;
(d) the appointment of an auditor of the corporation’s accounts in its first financial year or a special resolution that the accounts for that year need not be audited;
(e) such other matters as are required by regulation.
(3) If a document of a kind referred to in subsection (1) comes into the possession of the developer within 12 months after the corporation’s first statutory general meeting, the developer must deliver it, or a copy of it, to the corporation.
Maximum penalty: $15 000.
It’s your Community.
This article and the information provided represents general advice and does not take into account any specific financial situations, objectives or needs of an individual or Body Corporate/ Strata Corporation. Before you make any decision about whether to acquire a certain product, you should read the relevant product disclosure statement, policy wording and/or consult your Insurer.
Our CEO Tony Johnson wrote the following article regarding the relationships formed by a Strata Manager and how they can and do assist your Body Corporate. This Essay was a finalist for the 2021 Essay Award at the SCA Strata Community Association awards in November 2021.
Managers of Strata Corporations are experts in managing Strata and Community developments. Each Corporation can elect to be self-managed and do it well. However, having an organisation with the knowledge and skills to properly care for a property can be more efficient and save owners time and money.
The basic role of a management company is to provide the Body Corporate with administration and maintenance services for common property. However, a good Manager will add value by handling disputes between owners, contractors and even tenants.
The services provided by a strata management company are significantly enhanced by the established relationships they have with suppliers and other professional networks. To take excellent care of a strata property, managers will engage with professionals whom they have built rapport and understand the services they provide.
As with any relationship, these connections take time and effort to cultivate and evolve. The end goal is to build trust and mutual respect. These two-way relationships assist to ensure that those third parties have a clear understanding of the Strata industry. What’s more, great working relationships improve overall productivity and can help reduce maintenance costs.
Taking relationships seriously enables your strata manager to produce win-win outcomes; they act as a point of connection to all the services your property requires.
Tradespeople and the care of your development
Keeping on top of general maintenance means regular engagement with tradespeople for a broad range of tasks. Having the expertise and experience of a Strata Manager will help ensure the right skilled tradesperson are contacted for quotes and that the best results are delivered.
Reliable and skilled tradespeople can be challenging to find but are worth their weight in gold. Maintaining strong professional relationships with tradespeople is a key responsibility of managers. These connections allow any issues to be dealt with quickly, effectively and amicably. A great strata managers will build a strong, trusting and transparent relationship with tradies and subsequently clients who can be confident in their high standards.
When establishing new relationships with tradespeople, strata managers will know to request past client References, transparent costing and proof of relevant insurances/licenses. Owners with less experience may not ask for these things or not fully understand the information provided. By allowing a Strata Manager to care for their property using these trusted relationships, Owners are protecting the value of their properties and ensuring that Residents and Tenants have a happy and safe environment.
Insurers and providing adequate coverage
The insurance industry has various niches including the Strata or Community Titled coverages which can incorporate subsidiary covers such as Fidelity and public liability. A Manager needs to understand each of these policies and covers and each Insurer has different agreements and products to offer. The differences between the policy offerings are important and so are the claims. The polices between Strata Managers do not change, however the advantage to having a manager is knowing what cover is required for your particular property and whom to speak to get the right qualified responses. In addition, through networking and associations, a Manager should know which Tradespeople have completed similar work in the past for a specific Insurer and have established connections with the various Assessors and Advisors to assist with your policy and claims.
Insurance is a product that individuals never want to have to use but need to have available. Therefore, insurance providers typically don’t have regular contact with their individual customers which means it’s challenging to form strong working relationships. A good Manager will ensure these associations develop through regular contact, networking and of course experience.
Strata managers manage many different properties and therefore have regular contact with their insurance providers given that they will be handling more incidents. Their professional relationship with insurance providers adds value to their service. This may include using a Broker or going direct to obtain pricing for the owners.
Unit owners
Naturally the most important relationship a Stata manager has is with the unit owners. Strata management is about people, understanding, empathising and working to achieve results together and communicating to everyone. The Key above all else in these relationships is Communication.
To ensure superior communication and a strong relationship, a Strata Manager will keep comprehensive records, provide access to detailed information, and respond promptly and efficiently to all queries.
Strata managers also provide a great, neutral point of contact for owners to consult when issues occur. Navigating disputes and varying opinions can be tricky, but great strata managers possess the necessary communication skills and professional attitudes to ensure challenges can be managed as smoothly as possible and preserve relationships between as many unit owners as possible.
Ensuring harmony between owners means that strata managers will
Professionally communicate the rules to owners and tenants
Altering rules and implementing resolutions at the direction of the Owners as necessary, and in the best interest of the property.
Mediate disputes between owners and tenants, neighbours, and other vested parties. These include issues involving noise, parking, damage, pets and more.
We all are well aware that South Australia is one of the driest States in the country. As we draw close to Summer and the Christmas Holidays – we all have our diaries full of appointments or planned holidays (thank you to the opening of Borders). However, before we move into Holiday mode, now is an opportune time to take a step back and consider our safety.
We are now entering the ‘Fire Hazard’ season.
We would like to remind resident, especially those living around the Adelaide hills, to prepare their house and land for the upcoming Fire Danger season. We have suggested a few maintenance tips below.
Gutter Cleaning: Ensure all gutters at your complex are cleaned and free of any debris
Grounds Maintenance: Ensure grass, pest plants and undergrowth are kept to a maximum of 10cm high around buildings. Dispose any dry grass or green waste in the appropriate council bins. Water the grounds regularly as per the council instruction to help prevent dry and dead grasses from creating fire hazards.
Irrigation system: Check any irrigation system and sprinklers to ensure they are functioning. Keeping grasses green will help reduce the risk of fire.
Alarms and Exit lights: Self check or confirm with your service providers when was the last time fire/smoke alarms and exit lights were checked and/or replaced. Noting that in South Australia, it is the property owner’s responsibility to have the appropriate number of working smoke alarms installed.
BBQ’S: Please do not use open flame BBQ’S on fire ban days (please refer to the definition on the CFS website). When using coals on hot or windy days, keep the hose or bucket handy.
Fire Extinguishers: If you have an Extinguisher, make sure it is in date. Also consider purchasing a fire blanket.
Bushfire Plan: Consider creating your own 5-minute bushfire plan as per CFS recommendations
On a hot summer day, please check on other residents at your complex, especially any elderly neighbours who may be in need of assistance. Also, VERY IMPORTANTplease do not leave kids or pets in cars unattended and please leave water outside of your home for our animals 😊
Lastly, If you have any questions regarding bushfires in your area or require further assistance on safety plan please click on link (CFS website) www.cfs.sa.gov.au or call the Information Hotline 1300 362 361. You can also visit State Emergency Service website www.ses.sa.gov.au or call 132 500.
If you recognise any potential risk that you feel needs to be addressed by your Body Corporate, please notify our office with immediate effect. If your Unit is leased, please share this vital information to increase their awareness on the Fire Hazard season.
If you have any questions or queries, do not hesitate to contact Stratarama on 08 8276 0426 or email: office@stratarama.com.au . If you are unsure of anything with respect to maintenance of your group, don’t hesitate to get in touch.
Commencing with a National forum for Strata Principals which discussed current and changing aspects of Stata and Community insurance around Australia. Below is just a brief recap of some of the important and informative sessions held, however, this does not cover off all the sessions nor on the networking with suppliers, legal eagles, and software providers.
DAY 1
Macquarie Bank – Platform for Change
Tim MacKenzie from Macquarie Bank presented his insights into the increasing costs of staffing operational needs and services in Strata management and the impacts this makes on all Strata businesses. Tim also looked into the ways in which a Strata business can continue to grow while maintaining the important culture of the Strata team.
NSW Professional Standards
As NSW looks at a scheme for the professional standards of its Strata Managers and employees, insights from the SCA NSW President and Vice President offered us valuable confirmation of the standards which should be expected industry wide right throughout Australia and New Zealand.
Hybrid Teams and Flexible Working
Kimberley Jonsson, CEO of one of the main Strata and Body Corporate Insurers in Australia, presented her findings on the immediate adaptation to working through Covid, and how many of those changes are now with us to stay. CHU like all companies during covid adapted promptly to working from home arrangements and better flexibility for their Team. How well this worked, how it can be improved and why we must all now embrace change, flexibility and doing things differently.
Technology, A.I and Australia
Throughout the conference this year there was certainly a feel around embracing technology, how these technological developments are here and now and ready to provide options and assistance to our Clients and also our Teams. Speakers included Dr Catriona Wallace, Dr Sanjay Mazumdar and Catherine Caruana-McManus. Experts in their fields of A.I development, Big Data, ethical use of A.I and of course Smart Cities, the Internet of Things and other digital technologies.
Jason Carlson of Grace Lawyers
Jason Carlson explored the use of email from the eyes of a Strata and Body Corporate Lawyer, its place in modern society and how it has forever changed the landscape of communication. In addition Jason spoke to communication in general and ways in which to address Strata issues before they become legal matters.
DAY 2
Evolving the Strata Insurance Story
Alistair Gibney offered the delegation his insights into the future of the Strata insurance industry, including what the future may hold for insurance products, product benefits, regulatory requirements and of course costs. To glimpse the future, Alistair took us back in time to the beginning of insurance, and onto the introduction of Strata insurance, and how this niche insurance product/s has changed and evolved over the decades. Exploring some of the catalysts for change along the way such as; defects, cladding, natural disasters, shortages and regulatory reviews.
Australia Apartment Advocacy
Samantha Reece, Director of the Australian Apartment Advocacy group provided some feedback from their recent Apartment survey and explained where the group look to really focus their Advocacy in the short term to address the concerns of Apartment Owners and Residents right around the Country and at home in her State of WA. Sharing insights in how Owners and Residents dealt with the impact of Covid-19 but also more broadly in day to day living.
Rock the Pool 2021
Bobby Lehane is well known to the Strata industry in Australian through his previous role in the Strata insurance sector. As always, Bobby delivered an entertaining presentation on his recent journey to complete 100 swims in 100 days covering 250 kilometres in every Rock pool in NSW raising money along the way for LifeLine. Following the Confernece (and all other prior generous donations), Bobby raised over $100,000 for Lifeline!
Lifeline provides an important role in the Community and have experienced a 25% plus, increase in call volume and counselling demand. If you are concerned that someone is struggling or might be thinking about suicide and you aren’t sure how to talk to them, you can call Lifeline on 13 11 14.
SCA Australasia Awards Ceremony and Gala Dinner
After winning the Strata Community Association 2021 Essay award at the 2020 awards ceremony at the Adelaide Zoo, it was an honour for our Principal; Tony Johnson to further be nominated in the same category at the National awards ceremony held at the Adelaide Convention Centre on the 23rd of June 2021. A competitive field of worthy Essays from right across Australia were fantastic Finalists in the category. Whilst our own Tony Johnson did not claim victory in 2021, he was very grateful to be a finalist in the category, having written and submitted a piece on the effects that COVID-19 has had on all Strata Corporation Managers, Companies, Buildings and of course Residents over the last 12 months. We congratulate the winner from Victoria and all the Finalists and Winners in their respective categories in 2021.
If you have any questions about strata management in Adelaide contact us at:
This article and the information provided represents general advice and does not take into account any specific financial situations, objectives or needs of an individual or Body Corporate/ Strata Corporation. Before you make any decision about whether to acquire a certain product, you should read the relevant product disclosure statement, policy wording and/or consult your Insurer.
If you have lived in either a townhouse or an apartment in South Australia, you might know something about Strata Title and fees.
Here is everything you need to know about a Strata Corporation and the regular levies (or strata fees) paid by the Owners.
What Is a Strata Titled Property?
Strata titled properties are a form of property type for which you can own to reside in or own to invest in. It is significantly different to Torrens titled properties, where you own your whole property and the land it encompasses. With a Strata property, you will be a part Owner of common land and common property and be a member of a community of Owners with responsibilities and obligations towards one another this shared property and towards each other.
This type of property ownership is not just limited to residential buildings either, as some Strata or Community titled properties in South Australia may be made up of Commercial buildings or sheds or even a mixed-use property of commercial and residential lots or units.
Here are the many types of building that may be part of a Strata Titled Property:
Office
Townhouse
Warehouse
Apartment
Homette
Industrial unit
Retail shops
So now that we have an idea of what a Strata titled property is, why are the unit Owners invoiced Stata costs/strata fees/ levies, and what are these levies for? Where do these fees go? and what are these fees comprised of?
Strata Fees are more commonly known as strata levies or contributions. These funds are being raised to put towards the group’s ongoing running costs, maintenance and insurance. The maintenance is specifically for common property and common areas such as;
Driveways
Fencing
Gardening
Gate repairs
Stair maintenance
Pool maintenance
General Building repairs (roofing, guttering, windows, doors, and external walls
Lift maintenance
Common services and equipment such as;
Electrical costs
Water costs
Fire protection services
Alarms
Other costs such as;
Management services
Legal services
Debt collection
Consultant fees
Building and Liability Insurances as mandated
Other Insurances either required by State Law or optional
The frequency and amount of fee that every Owner needs to contribute are decided annually at the AGM annual General Meeting) by the Unit Owners in attendance (or voting by proxy).
If managed professionally, part of the services provided by the strata manager likely is to provide your group with a proposal for a budget based on what they believe your Strata Corporations annual costs to be (and long term costs).
A Strata fee/ Strata levy is usually paid quarterly, based on Annual (plus long term) expenses. These will be distributed by your Strata Managers or the Treasurer when self-managed, in line with the agreed amounts to raise at the last Annual General meeting.
This, of course, also varies between the different states and depends on the strata laws in place.
However, there are three main types of strata fees:
Administrative Fund Levies: These are expenses incurred each year, such as cleaning, electricity, plumbing, gardening, insurance, water, etc., recurrently
Sinking Fund Levies: These are expenses made for long-term upkeep and maintenance work, not occurring every year, such as painting, roof replacement, timber works, etc. This works essentially as savings account for a rainy day, but with some idea of what that rainy day may bring.
Special Levies: these are generally one-off levies called for a specific purpose such as unknown maintenance, emergency works and shortage of funds. These are often works that were not budgeted as part of a sinking fund (or the group may not have a sinking fund). Perhaps a project where funds were being raised needs to be prioritised sooner than expected or were more expensive than originally anticipated. Again these works would not be recurrent annual expenses but more one-off projects such as a driveway replacement or guttering replacement.
Your Strata Fees or Strata levies will go towards all of the items as mentioned earlier and more. Each property is different, so the short and long term costs of running and maintaining these properties are also very different. For example, one group may have a large area of common ground, which requires substantial and regular gardening. In contrast, another may have a small amount of common ground, mainly just a carpark. Some Corporations may pay all the water usage through one common meter paid for by the Strata fees, whereas another may have individual water meters on each unit.
The type of items each Strata must cover is detailed above. However, if you are looking at purchasing a Strata unit, to determine what the costs are for that property, look at the most recent financial statements or budgets to get an idea of the regular costs. Then look at the last few sets of minutes to determine if any long term projects are being considered or already approved for the group, and whether or not these costs are incorporated in the existing levies and strata fees, or if a special levy is anticipated to cover the cost of the works.
How Are Strata Fees Calculated?
The strata fee that you need to contribute is decided by the body corporate at the AGM. The Members determine the amount that owners need to pay by owners, but after reviewing and considering a budget put together by your group’s Manager or the Committee.
Members can accept the budget or vote to amend it. However, this budget needs to consider all the group’s ongoing regular expenses and any unexpected expenses that may come.
The strata fees will be different for every Strata unit complex, depending on the required recurrent expenses and/or agreed to by the Members. Some groups, for example, may have common lighting as a recurrent expense, and others may not. Factors that go into determining these fees include:
the age, location, property type, insurance costs, operational costs, amenities and more.
In some Strata Corporations, there may be other premium amenities that can also add to the group’s costs, such as pools, gyms, elevators, function centres and much more.
All of this will increase your strata fees needed to cover the ongoing costs.
This fee may be set to be paid in variable frequency options, such as paying your contributions/ levies. Annually or quarterly (most common). This will be decided at your AGM.
Unit Owners are responsible for paying the strata fees (levies) on time when due, as pre-determined by the Corporation at a Members meeting.
If you cannot pay your levy on time, it is important to reach out to the Strata Manager or Committee for your group and request an extension or alternative for payment. The total cost of your levy is always your responsibility, and just as you need to pay your other invoices, such as electricity, you must also pay the Strata Corporation. If you do not, there will be consequences such as interest and reminder fees applied to your account and could also result in Debt collection action taken against you or, in instances of long term arrears, Court actions.
In instances where you are struggling due to hardship, ignoring your incoming levies will not assist you. Reaching out quickly to express the issue with your Manager or Committee, so you can work together to get you back on track is vital. Communication is always the right approach to these matters.
When your levy is overdue, you also lose voting rights at your meetings (except on decisions requiring a unanimous vote). This means that you are losing your voice for decision making.
Remember that if you are dissatisfied, holding back, your levy fees will not resolve any issues. Maintaining your voting rights is the best way to be heard on any matters. Also, suppose the group does not have sufficient funds to cover the costs of running the group. In that case, you may find that additional levies are also raised to keep the Strata Corporation able to transact its financial and maintenance obligations. These shortfalls, in turn, put additional pressure on all unit Owners.
How Do I Avoid Levies in Arrears?
Strata Management Companies usually provide three or more weeks notice for a levy (unless it is an emergency). They will also provide some time after the due date, before interest and reminder fees are added to your account.
Work out your budget in advance. If your quarterly levies are financially draining as a lump sum, perhaps consider getting in advance and then paying into your account more regularly so that you can pay in smaller sums each month?
Where possible, before purchasing a unit, ensure that you understand the quarterly fees and the current condition of the property to determine whether this is a unit that you can personally afford, not from the purchase price but the ongoing cost perspective. For example, if the minutes and condition of the building highlight that there are major future works on the horizon, and there are few funds in the Strata Corporation account to put towards these works, do you have enough fund reserves personally to contribute your portion of ongoing costs in the years ahead?
Who Is Responsible for The Payment of Unpaid Strata Fees
The group can review and determine how and when funds are raised for certain items, and collectively the group can negotiate at a meeting what the fees will need to be to ensure the group meets its obligations. Some of the group’s costs, for example, are quite fixed. Members can obtain quotes for items to try and lower the ongoing costs or one-off maintenance costs. Still, they need to do the works, or to meet their electricity costs, for example, cannot be removed from a budget as they need to be met, and so the group must ensure that whatever levy/ fees are being raised, are sufficient to meet the group’s needs. If enough funds aren’t raised, the group could find an impact on the health and safety of the residents in the building.
Once the Members set a contribution level/ levy at a meeting, each Owner must pay these levies to ensure compliance under the Strata Titles Act 1988 and ensure that the group can meet its costs.
If you are an owner in a Strata Corporation, then the costs of maintaining and running the Strata are a collective responsibility of the Unit Owners. This means that there is a responsibility upon you to pay your levies/ fees.
You, the Unit Owner, is responsible.
In some commercial situations, the Commercial lot Owner may choose to include the Strata levies into their Lease arrangements with their commercial Tenants. This does not remove the responsibility of paying the Strata levy from the Unit Owner. It merely means that they can choose to recoup the costs from their commercial tenant, provided it is part of their lease.
Final thoughts
Before you decide to invest/own in a strata property, you need to understand all these factors so you are aware of your obligations and the group’s costs. You must do your research so you know how everything works before you make an informed decision.
This article and the information provided represent general advice and do not consider any specific financial situations, objectives, or needs of an individual or Body Corporate/ Strata Corporation. Before you decide whether to acquire a certain product, you should read the relevant product disclosure statement, policy wording and/or consult your Insurer.
