Strata Levies Cover Collective Expenses 31/10/2005 Prospective buyers of strata titled properties often inquire about strata levies, wanting to know what they are and what they do. And misconceptions are common says the director of one of the States largest strata title management companies.
Mr Richard Tooker, director of New South Wales Strata Management, says the misunderstandings often arise because there are not one but two types of levies, each of which performs a specific task.
“Strata title sees people hold a title to their own portion of the building whilst sharing overall responsibility. It is one of the strengths of the strata title arrangement. It sees costs shared around so that no single owner must bear the load of operating the building and looking after its long term welfare.”
Mr Tooker notes that all property ownership comes with costs and responsibilities and that strata title properties only differ in the way their arrangements are managed.
“If an individual owns a home they must see to its day-to-day operation and its longer term maintenance and this is also true for strata titled property.
“The major difference is that those owning an conventional home must wear the total cost of both types of expenses, normal operation and longer term maintenance, whilst with strata titled buildings these costs are shared amongst the various owners.”
Mr Tooker notes that it is the role of the buildings’ owners’ corporation to look after the business of the strata scheme. It sets up and administers a fund for the every-day operational expenses and also a fund to cover longer-term future expenditures.
“In this respect the owners corporation faces the same type of expenditure as a conventional householder: water and electricity charges for shared sections such as entranceways, gardens or grounds, along with building and public liability insurance and repairs and maintenance to areas such as pools or spas.”
The second fund, which is called the sinking fund, is an estimate of what monies may be required for longer-term use during the next ten years and more. These funds are used to maintain the building and administer the scheme.
The funds come from a levy established by owners at an annual general meeting and set by a majority vote. Mr Tooker says the pooled funds provide a collective method of cost sharing that has proven to satisfy the needs of many people.
“Strata title living is today a method of property ownership particularly popular with the many people who want to enjoy what is often seen as a quality lifestyle achieved at a reasonable price.”
Young couples and mature aged owners are amongst those he says like the idea of combining proximity, shared responsibility and pooled financing.
The buildings themselves often have amenities that would be difficult or prohibitively expensive for people to own singly, offering swimming pools, saunas, tennis courts, carefully kept grounds and other facilities too costly to attain privately.
“Often located near busy centres of activity, near cafés, opposite marinas, close to cinemas or sporting venues, parks or harbour side areas, many modern strata titled buildings are a world away from where the idea began when the Conveyancing (Strata) Act 1961 was first introduced.”
Today, strata titled property can include resorts, residential buildings, commercial structures, retail outlets, serviced apartments, and mixed use buildings too. They can even include caravan parks.
Mr Tooker says the strata management team provides vital assistance by helping owners’ corporations set the appropriate level of funding and by ensuring that all requirements of the Strata Title Management Act are met.
He says that owners’ corporations that have questions about their current level of compliance can contact New South Wales Strata Management direct on 9890 1841 to have their programme reviewed.
New South Wales Strata Management (formerly Gilmour Strata Management) commenced business in early 1991, as a member of the highly respected J A Gilmour & Sons group of companies. Licensed solely and specialising only in strata management services, the company has steadily grown to become one of the largest such organisations in New South Wales.
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