What is Strata?

You have purchased your property and are now part of a strata community...but what does it all mean?

STRATA TITLE – Strata title allows individual ownership of part of a property (called a ‘lot’ which is generally an apartment or townhouse but can be a villa or a warehouse), combined with shared ownership in the remainder (called ‘common property’ e.g. foyers, driveways, gardens) through a legal entity called the Strata Company.

STRATA COMPANY – Sometimes referred to as Body Corporate which is the Eastern States terminology. This is the company formed of all owners within the complex and your involvement can be minimal or you might choose to be a Council of Owners member whose overall goal should be to run the complex for the benefit of all owners.

STRATA MANAGER - Strata Managers are professionals who are appointed by the Council of Owners for the Strata Company and are responsible for the administration of the Strata Company. They are appointed to look after the legal and administration requirements such as insurance, work health & safety compliance, the collection of levy contributions, maintenance and ongoing communications with owners. They are specialists in their field, possessing the knowledge and skill to administer the Strata Company in accordance with the complex requirement.

If a building is not properly maintained and someone is injured as a result, the owners of each Lot can be held legally responsible. If a building is not fully insured for the correct replacement cost, and if something happened to the building where a rebuild was necessary, the owners would have to make up the short-fall from their own pockets. A good Strata Manager offers peace of mind to all owners that levies are being invoiced and collected and all the bills are paid and accounted for in an honest and transparent manner.

STRATA MANAGER DUTIES CAN INCLUDE:

• Arranging insurance
• Ensuring the strata scheme complies with all the Work Health & Safety (WHS) regulations
• Managing a preventive maintenance program to maintain the value of the property
• Chair the committee meetings, annual general meeting, extraordinary meetings
• Preparing and distributing notices, agendas and minutes
• Preparing and distributing financial statements and budgets
• Attend to correspondence
• Organizing and coordinating repairs and maintenance of common property
• Maintaining the strata company register (the strata role)
• Arranging payment of related invoices
• Preparing and distributing levy contribution notices and manage payment and arrears
• Attending to orders, submissions and appeals
• By-law breaches and appeals
• Providing advice in handling ‘difficult’ or complex strata issues
• Managing and maintaining keys & remotes or other forms of access to complexes

STRATA MANAGERS are not Property Managers. Strata Managers look after common property only. However if an insurance claim arises within a unit often the Strata Manager will need to be involved.

STRATA MANAGERS encourage the Strata Company (owners) to be proactive in reporting any faults and maintenance issues, breach of by-laws etc. that need to be addressed otherwise the Strata Manager is unaware there is a problem.

STRATA MANAGERS are not affiliated with the builder/developer and building issues should be addressed with the builder/developer within the legislative time frames.

THE KEY FEATURES OF LIVING IN A STRATA SCHEME ARE:

• you own your unit or apartment as well as sharing ownership and responsibility for ‘common property’
• you are automatically a member of the ‘owners corporation’ (Strata Company) which has responsibility for common property
• you have to contribute to the cost of running the building through paying quarterly levies
• you also have to pay money into a Reserve fund (sinking fund), for future long-term expenses such as painting the building or replacement of guttering
• the security of living in a communal environment
• facilities that you can use and enjoy without the responsibility of having to clean and maintain them yourself

In comparison to living in a freestanding house, there are some lifestyle restrictions in a strata scheme, for example there are rules (By-laws) that may affect you doing renovations to your unit, that state where you can and cannot park your car, where you can dry washing or whether or not you can keep pets.

WHAT YOU SHOULD BE AWARE OF:

ANNUAL GENERAL MEETING

The Annual General Meeting (AGM) for the Strata Company is held every 12 -15 Months. Only financial owners are entitled to vote at these meetings.

At the AGM

• a Council of Owners is elected - the council take on the responsibility for making decisions for the Strata Company
• a budget is discussed and from this budget, strata levies are raised.

STRATA LEVIES

Strata levies are a combination of all the expenses such as insurance, water & power, maintenance, gardening, cleaning and Strata Manager fees. The amount charged every quarter ensure there are funds available in the strata company account to keep paying bills incurred.

The strata levies are usually paid quarterly and are raised to cover the amounts agreed upon in the budget. Strata levies are based on the Unit entitlement (UE’s) of each unit. Late payment of levies incurs interest at a high rate of 15%.  The strata levies are paid into a bank account specifically for your strata company from which payments to contractors are made.  Levies vary with each complex depending on what facilities need to be maintained at the complex, so cannot be compared with other complexes. Strata complexes with lifts and pools are going to incur greater maintenance costs than those without.

BY-LAWS

By-laws are registered with your strata plan and are a set of rules that the residents/owners of the complex need to abide by. If you need a copy of these, please ask your strata manager to send you one. These can vary with each complex and can be tailored to suit the complex requirements.