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.
- If you are new to Strata living or never really looked into what your levies are all about, you may have some questions about what they actually pay for. One thing we can assure you is that they are not just paying for your Strata Manager! In fact, depending on your expenses, generally your Strata Manager costs are under 10% of your annual costs.
- A Body Corporate / Owners Corporation has varying expenses that are budgeted for over your financial year, which depend on the structure of the scheme.
These can include: cleaning, electricity, fire safety, insurance, electrical and plumbing repairs, gardens and grounds maintenance, lifts, plant, pool and equipment maintenance contracts and repairs, Caretaker/Building Manager salary, security, tax/BAS filing fees, and sinking fund expenses for capital works.
- There will be little confusion as to what levies are being spent on if you have a good Strata Management company that provides detailed financials to owners. At SSKB, our Community Managers provide detailed information showing the budgeted and actual expenditure for a given year at each Committee meeting, and to all Owners on the portal and with the Annual General Meeting agendas.
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:
- Managing the day to day running of the Body Corporate/Owners Corporation
- Making decisions on behalf of the Body Corporate/Owners Corporation
- Putting the lawful decisions of the Body Corporate/Owners Corporation 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.
Role of SSKB: As 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:
- Call, attend, and record the Annual General Meeting each year.
- Prepare draft budgets and issue levy notices throughout the year.
- Pay Body Corporate/Owners Corporation creditor invoices once approved by the Committee.
- Generally maintain and report on the financial accounts of the Body Corporate/Owners Corporation.
- Effect the common property insurance.
- Issue correspondence upon Committee instruction.
- 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.
If you would like to read more frequently asked questions, please click here.