Strata Managers receive lots of queries about strata levy payments. People ask:
- How are strata levies determined?
- Why they have increased?
- Why have they changed?
- What say do I have in strata levies?
- And many more.
Here we have answered a number of questions about strata levies. We hope the following provides you with a clearer understanding of strata levy payments for your scheme.
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How are strata levies determined?
The levies are set by your strata council. The council may ask your strata manager to propose a budget based upon previous years’ expenditure, CPI increase and any other work that may be scheduled. This budget is voted on and adopted at the AGM by all owners, with levies raised and collected based on the projected expenses for the year (the budget).
What are general or administrative levies?
These cover the insurance and maintenance of common property for your scheme, and can include:
- Building maintenance
- Common area electricity, energy, cleaning, water consumption, etc.
- Lift maintenance
- Strata managers fees
- Other costs specific to your scheme
Why are my strata levies high/increasing/more than another scheme?
If you believe your strata levy payments are too high, it’s best to get involved and attend the general meetings and nominate to be on the Council of Owners. It is normal to see an increase in annual levies as costs for services are also increased annually in line with the national CPI.
Levies are usually higher in buildings that have more amenities and services, or because the building may be old and requiring regular scheduled maintenance. They can also be higher due to extensive gardens, pools, spas and other facilities that require specialised routine maintenance.
What is a reserve levy or sinking fund?
The reserve levy or sinking fund is a levy that acts more like a savings account. It’s contingency fund for accruing money for long term projects, or projects that are at the end of their serviceable period; such as painting, lifts, pool refurbishment, etc. This levy accrues over a longer period of time, alleviating the need for a short time-framed specific purpose levy.
What would constitute a specific purpose levy?
Specific purpose or special levies are for particular purposes that crop up from time to time, where there are insufficient funds in the reserve account or administrative accounts to be transferred to a project. Generally, money needs to be raised over a shorter or specific timeframe. An example would be installing shade sails in a common outdoor area, or building a ramp beside the stairs to improve disability access.
Again, if you’re puzzled about levies or feel you need greater input, it’s a good idea to become a more active owner – attend the general meetings, and/or nominate yourself as a council member.
Abode Strata Management is an accredited, WA-based boutique strata management company providing residential and commercial strata management. Abode specialises in efficient, tailored solutions and sensitive management of people, for small residential right up to large mixed-use developments. Follow Abode on Linked In.