Common Misconceptions of Strata Living

For those who have not previously lived in a Strata complex, it can be hard to know what is true and what are myths when it comes to Strata living. In this article we will unpack three common misconceptions when it comes to Strata living. 

The first misconception we will discuss is the allocation of fees collected by the Body Corporate/Owners Corporation.  

  • Confusion has been the longstanding norm when it comes to levies for lot owners.  There is a great amount of confusion amongst owners about what levies are actually spent on.There are many variables to consider. This section of the article will give you a general indication of how levy contributions are spent, along with an example of a building’s expenditure throughout the period of a year.A Body Corporate / Owners Corporation has many particulars that are allocated for over a year.These can include: Management fees, cleaning, electricity, fire control, insurance, electrical, gardens and grounds, lifts, plant and equipment, plumbing, pool, Resident/Building Manager salary, security, tax/BAS filing fees, pool heating and sinking fund expenses.Of these particulars, electricity and sinking fund expenses can generally account for the largest amount of expenditure.Even though there are countless variables to be considered for individual situations, there should be little confusion as to what levies are being spent on. If you have a good Strata Management company that remains as transparent as possible.At SSKB, our Community Managers provide detailed information showing the budgeted and actual expenditure for a given year. This information is freely available and also provided in the minutes to keep all lot owners up to date and prepared for the levies to come.

The second misconception is about what the standard process is for dealing with overdue levies.  

  • A frequently asked question at SSKB is “What happens if I don’t pay my levies on time?” SSKB’s Levy Management Team monitors all of our Bodies Corporate/Owners Corporation arrears on a daily basis. This helps to ensure arrears matters do not proceed to legal action and saves owners thousands of dollars in legal fees. The SSKB Levy Management Team works with your Committee and Community Manager to ensure overdue contributions are collected in a timely and efficient manner. These processes are based on reviewing records on a regular basis to assist your committee in maintaining cash flow for your Body Corporate/Owners Corporation. 

The final and often most commonly misunderstood misconception is the difference between the Committee and the Body Corporate / Owners Corporation Manager.  

  • Role of the Committee: The Committee is the “executive arm” and decision-making component of the Body Corporate/Owners Corporation. A Committee typically consists of a Chairperson, Secretary, Treasurer and Ordinary Members. The Committee’s primary responsibilities are:
  1. Managing the day to day running of the Body Corporate/Owners Corporation 
  2. Making decisions on behalf of the Body Corporate 
  3. Putting the lawful decisions of the Body Corporate into place 

The Committee is governed by a Code of Conduct that states that each member must act honestly and fairly in performing their duties. They must act in the best interest of the Body Corporate/Owners Corporation. 

While the Body Corporate/Owners Corporation may engage a Strata Manager to oversee the administration requirements of the building, they are a non-voting member of the Committee and as such, do not have the right to vote on a Committee decision. 
common misconceptions of strata living

Role of SSKBAs a Body Corporate/Owners Corporation Manager, SSKB is engaged to attend to the legislative requirements placed on a Body Corporate/Owners Corporation. SSKB’s role is primarily administrative and generally entails the following processes: 

  1. Call, attend, and record the Annual General Meeting each year. 
  2. Prepare draft budgets and issue levy notices throughout the year. 
  3. Pay Body Corporate/Owners Corporation creditor invoices once approved by the Committee.  
  4. Generally maintain and report on the financial accounts of the Body Corporate/Owners Corporation. 
  5. Effect the common property insurance. 
  6. Issue contravention notices upon Committee instruction. 
  7. Provide general advice and guidance to Committee members and lot owners on matters relating to their Body Corporate/Owners Corporation. 

While all of the above tasks are required of SSKB, all decisions relating to Body Corporate/Owners Corporation matters are made by the Committee. We are unable to act without instruction from the Committee.  

We hope this article has cleared up some misconceptions that you may have about strata living. 

If you would like to contact the SSKB team, click here for an obligation free discussion today. 

If you would like to read more frequently asked questions, please click here 

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