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What Do Your Strata Fees Include?- NSW

What Do Your Strata Fees Include?- NSW

ThIts firstly important to understand what Owners Corporation fees are? 

Paying Owners Corporation fees is a fundamental necessity of living in a strata scheme. When sharing a building and common property with multiple owners it is only fair that all evenly contribute to the upkeep and the running of the Owners Corporation.  

As an owner in a strata scheme, you will receive contribution notices outlining amounts you are required to pay and what accounts will they contribute to. The notice commonly has up to three accounts listed: 

  • Administrative Fund 
  • Capital Works Fund 


You might be thinking, what does this mean? Where does my money actually go? 


What do Strata Fees Cover? 

Strata fees cover all expenses incurred in maintaining and managing strata properties. These expenses generally include: 

  1. Maintaining and repairing all things inside and outside of the strata building that are not the responsibility of a unit owner,
  2. Upkeeping common areas, gardens and lobbies. Commonly includes cleaners, gardeners, pool and window cleaners ,
  3. Regular inspection costs to ensure the safety of the building and its infrastructure is up to standard. Up to date safety report eg. Fire alarms, lifts, water pumps, fire doors, balconies
  4. Management and professional fees must be paid to strata managers, accountants, building managers, caretakers ,
  5. Residential strata insurance is compulsory. It covers loss or damage to common areas, personal injury and liability,   
  6. Power and water costs to supply common areas, shared facilities. Occasionally internet, phone or gas expenses are also incurred,
  7. Future capital expenses that are separate to sinking fund. 


What does the Administrative Fund Cover? 

Every Owners Corporation by law is required to have an administrative fund to manage the everyday expenses of the strata scheme.  

Your contributions to this fund cover the day to day running costs of Owners Corporation, and the general maintenance of common property and Owners Corporation assets. This includes electricity, water, carpet cleaning, garden maintenance, insurance and pest control.  


What does the Capital Works Fund Cover? 

Every Owners Corporation must have a capital works fund (previously called a sinking fund by law). Capital Works Fund pays for major works, maintenance or repairs. The money in a capital works fund can be spent on several different things such: 

  • major painting to common property;  
  • basement car park marking;  
  • repair concrete roadways and driveways;  
  • replacement motor to basement;  
  • replace storm water pumps;  
  • recarpeting common areas;  
  • lift replacement;  
  • and more.  

Essentially, a capital works fund is a plan for the future. 

In NSW, the Owners Corporation is required to prepare a plan of expected major expenditure to be met from the Capital Works fund. The plan is for a 15-year period that commences on the first AGM of the Owner’s Corporation. The committee must review this plan at least every 5 years.  

 Considering the involved process, it is not a surprise that Owners Corporation Committees prefer to invest in a qualified Quantity Surveyor to prepare 15-year Capital Expenditure forecasts to give committees the broadest possible overview of future expenses. 

Travis Henry, Senior Accountant for SSKB stated “Prompt payment of contributions by owners is essential to ensure the scheme can operate smoothly and efficiently. Adequate funding/cash flow allows services to be provided for the benefit and enjoyment of all owners. In turn a well maintained and presented scheme generally commands higher relative asset values compared to one that isn’t.”  


What does Insurance Contribution Cover? 

Your insurance expense is a payment for the building replacement and reinstatement insurance. Most times the insurance premium is included in the administrative fund budget. 

The contents of an owner’s property are not the responsibility of the Owner’s corporation or strata scheme. Even where damage is caused by a common property issue, personal items such as furniture, electrical appliances, curtains and carpets may not be covered by the owner’s corporation. 

The treasurer is infact responsible for insurance if this job has not been delegated to strata manager. 

Strata Schemes must have Building Insurance covering replacing or reinstating the building to as-new condition, fees for architects or other professionals needed to repair the building and removing debris. 

The cost towards Public Liability Insurance and Work Health and Safety insurance of the premium is always included in the Administrative Fund. 


What are Special Contributions? 

Last but not least special levies.  

Strata Committees can vote in to introduce a ‘special levy.  You may want to do this when there is not enough money to cover expenses eg. Major repairs. 

Special levies must be introduced at a general meeting of the owner’s corporation. Over 50% of the owners must vote in favour for a special levy. The Owners Corporation decide how often lot owners pay their levies.  

The strata committee must also keep special levies in separate funds. 


If you have any further questions regarding levies, your sinking fund or any other queries please don’t hesitate to contact your Community Manager or email 


If you aren’t a client of SSKB, click here to see why you should choose SSKB. 

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