Strata Levies Budget for the Future 1/12/2007 If you plan to buy one or more units in a strata titled building you will hear much said about strata levies. These are periodic payments that are collected and pooled by the owners, for future use in maintaining the common areas of the building and its grounds.
Recent amendments to legislation now see that longer term plans are made to ensure that a building has funds to meet bills that may arise much further into the future than before. The aim has been to prevent the need for ‘extraordinary’ or ‘surprise’ levies which in the past could see owners out of pocket for sometimes what could amount to major repairs to high cost areas such as roofs, exterior walls or other matters often structural in nature.
Mr Richard Tooker, director of New South Wales Strata Management, says these levies are decided at a general meeting by a majority vote and work much like a budget.
“You might also call it a forecast. It details what funds are being set aside. They are a good indication of a healthy future for all the owners when an examination shows that periodic funding is sufficient to meet ongoing repair and maintenance costs.
“If the building is fresh and new the forecast would reflect the fact that few major renovations are in store and would instead focus more on continued maintenance.
“With an older building more serious considerations might need be made about a roof nearing its use-by-date or more extensive treatment of aging retaining walls or other areas where time has already taken its toll.”
Mr Tooker related how a building on the northern beaches aged about 80 and that had been self managed under strata title for about the last 30 came under his Company’s management and what then transpired. He says the old guard had indeed done their best on day-to-day maintenance but they had failed to put funds away to handle long term expenses. The building, it seems, was about to fall down around their ears, but was worth an immense amount of money and was well worth fixing.
Here is a partial list of what was found to be necessary: new roof, new brick ties, the lift, all electrical wiring, most windows, and all gutters and down pipes. And again he repeated that this list is the short version.
“The total cost to the 30 owners was $6 million over six years. But we saved a wonderful and highly valuable property.”
He notes that owners of non-strata properties have to bear responsibility for similar such repairs but on their own, where those owning within a strata titled building get to share the financial burden with other owners.
He says levies are payable by each owner in proportion to the unit entitlement for each lot in accordance with sections 75, 76 and 78 of the Strata Schemes Management Act. The NSW Office of Fair Trading overseas The Act and assists by providing information on its various sections.
In the event an owner gets behind in their levies, an interest fee will apply, which amounts to a simple interest per annum of 10 per cent on outstanding amounts.
Mr Tooker, whose company is amongst the largest providers of Strata Management Services in NSW, says the role gives much needed oversight assistance to a building’s Owners Corporation, guiding them toward full compliance with the Strata Title Act.
“The complexities of The Act often see administrative bodies poorly able to meet their responsibilities. I recently wrote about storm water storage systems, mentioning that sometimes an Owners Corporation may not even be aware that such a system existences for their building, let alone be aware what maintenance might be required. Such are the complicated nature of the work before them,” Mr Tooker says.
A strata building Owners Corporation can find out more about the range of professional services available by contacting New South Wales Strata Management Pty Ltd on 9890 1841.
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.
|
|
|
