Strata Levies are struck on an annual basis. The funds raised are used for the operation, management and maintenance of the Strata Scheme.
What types of levies are there?
Administration Fund
The Strata Schemes Management Act 2015 and The Strata Schemes Management Regulation 2016 provides that an Owners Corporation must establish an Administration Fund. At each Annual General Meeting, the Owners Corporation must determine how much it will need to credit to the fund during the year. The Administration Fund is established to settle expenses:
(a) To maintain in good condition on a day-to-day basis the common property.
(b) To provide for insurance premiums.
(c) To meet other recurring expenses.
Note: Recurring expenses would include such regular expenses as insurance, common property, water & electricity charges, carpet cleaning, lawn mowing services and the like, and minor expenses relating to maintenance of the common property.
Capital Works Fund (known as "Sinking Fund" under the old Act)
In addition, the Owners Corporation must, at each Annual General Meeting, estimate how much money it will need to credit to its Capital Works Fund for actual and expected expenditure:
(a) For painting or repainting any part of the common property which is a building or other structure;
(b) To renew or replace fixtures and fittings that are part of the common property;
(c) To replace or repair the common property;
(d) To meet other expenses of a capital nature.
Note: Expenses of a capital nature would include expenses in relation to major repairs or improvements to the common property of the Owners Corporation, such as painting of a building or replacement of roofing, guttering or fences and the like.
In estimating amounts to be credited to the Capital Works Fund, an Owners Corporation is required to prepare a plan to take into account anticipated major expenditure identified in the plan for the ten-year period to which the plan relates. An Owners Corporation may choose to use its own plan.
How are Strata Levies determined?
An Owners Corporation is required to vote on the proposed levies. Typically, the Strata Managing Agent will prepare a budget and recommend a levy that is sufficient to fund that anticipated expenditure. Owners are invited to review, discuss and consider the proposal (and offer alternatives, if they so wish).
The Owners Corporation will determine the levies at a general meeting and instruct the strata manager to issue levy notices to owners as they fall due.
The Owners Corporation will determine the total levies due (broken down between administration and capital works funds, and special levies are raised for non budgeted items or to replenish shortfalls in accounts). Each owner is required to contribute toward the levies based on the owner’s unit entitlement.
The “unit entitlement” is established at the time of registration of the Strata Plan. The unit entitlement is the way that the total amount is apportioned between the owners. For example, an owner having a unit entitlement of 100 units in a scheme that has a total of 1,000 unit entitlements will be responsible for funding 100/1000 (i.e. 10%) of the cost.
How will I know what the Strata Levies will be?
Strata Levies are struck at the Annual General Meeting of the Owners Corporation and (from time to time) at other general meetings. The agenda for the meetings will be sent to all owners a few weeks before the meeting.
A motion to strike levies will be included in the meeting agenda and all owners are encouraged to attend the meeting to discuss the proposed levies.
The owners will need to agree the total levies to be struck and the due date(s). Owners will be able to determine their proportion by dividing the total levies struck by their unit entitlement (as discussed above).
In addition, approximately four weeks before the due date, Waratah Strata will send a levy notice to all owners advising them of the amount of the levies due and due date.
How often are Strata Levies paid?
The Owners Corporation will determine the frequency (usually quarterly or six-monthly) at the Annual General Meeting.
Waratah Strata will issue levy notices to all owners (or their Property Managers) in advance of each levy falling due.
How can I pay Strata Levies?
The payment methods are outlined on the levy notices.
Should you wish to pay your Strata Levies from your cheque or savings account by BPAY (internet or telephone banking), you will need to contact your financial institution and use the information appearing on your levy notice.
Levy payments are also accepted over the counter at all National Australia Bank branches.