This question about strata maintenance fees and who pays for what has been answered by Jan Browne, Bridge Strata.
Table of Contents:
- QUESTION: Why do owners on the ground floor of our building need to contribute to the facilities such as lift, which they do not use?
- QUESTION: Is there a 30 day grace period for levy payments in Canberra before interest is charged on the overdue amount?
Question: Why do owners on the ground floor of our building need to contribute to the facilities such as lift, which they do not use?
Do ground floor apartments contribute to the sinking fund for lifts? If certain properties do not or cannot access common facilities are these factored into sinking fund contributions, or is it just a per square metre calculation?
Answer: Unless there is a split budget, all owners contribute to all the expenses of the owners corporation.
Unless there is a split budget, all owners contribute to all the expenses of the owners corporation. This includes ground floor units contributing to lift maintenance even though they may rarely use these facilities.
In order to move away from a standard administrative and sinking fund into the territory of a split budget an Alternate Rule would need to be adopted. This would set out criteria and formula by which the budget is separated. Under the new legislation, this can be done by way of a special resolution as opposed to an unopposed resolution as was required prior to November 2020.
This post appears in Strata News #537.
Question: Is there a 30 day grace period for levy payments in Canberra before interest is charged on the overdue amount?
Our strata manager claims that there is a 30 day grace period in Canberra that follows the due date for payment of levies during which time levies don’t have to be paid. They also claim that arrears and penalty interest do not accrue until after the expiration of the grace period. I can’t find any reference to a grace period in the Unit Titles Management Act. On the contrary, it is very clear that levies are due and payable on the due date and that interest accrues if levies are not paid by the due date. Is our strata manager correct?
Answer: Most strata managers have a default grace period
Most managers have a default time frame for grace especially to cover late meetings, public holidays, reduced quorum decisions having to wait 28 days etc.
No interest is charged during the grace period but if paid outside the grace period then the interest is normally calculated back to the due date. The Owners Corporation can also vary the rate of interest to be charged but the usual default is 10% but I do know that during high interest rates some plans increased this to 20% as the interest rate on outstanding levies at 10% was less then some mortgage rates.
But each management company and Owners Corporation may set their owner rules.
This post appears in Strata News #514.
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