Question: What is the process involved to determine the percentages allocated to shared facilities in a Strata Management Statement (NSW). Is there an Act or document that outlines how the percentages are obtained and inserted into the SMS?
Answer: It is very important that a specialist a Strata Consultant/advisor who has had extensive experience is involved with the initial setup and ongoing running.
A Strata Management Statement (SMS) is an individually drafted document used to regulate the relationship between the different components making up a Building Management Committee (BMC). These components can be lots in a deposited plan, separate strata plans, commercial and retail developments etc.
The SMS must set out the structure and function of the BMC and the activities needed to manage and maintain the complex. The management and up-keep of shared facilities is a major part of any SMS.
Shared facilities are areas, services and equipment within the building and its site that are shared by two or more of the component use areas These facilities are usually set out in a detailed strata management schedule or as part of the SMS.
The only shared service/facility defined in the legislation is for insurance premiums, under the Strata Schemes Management Act 2015, Section 162 (2), otherwise no guidance is given. So it is very important that a specialist a Strata Consultant/advisor who has had extensive experience is involved with the initial setup and ongoing running.
It is in my experience it is likely that the initial setup will need to be adjusted as the complexities of the property is understood and the Strata Schemes Development Act 2015 (NSW) recognises this need and under Schedule 4 – Strata Management Statements, clause 2(1)(f), copied below, it specifies that a review of the allocation of costs remain fair and if any there are changes to facilities or services this needs to be reviewed and that at a minimum a review must take place every 5 years.
- a review process to ensure that the allocation of those costs remains fair with any such review taking place as soon as practicable after any change in the shared facilities or services (including any change in the use of those shared facilities or services), with at least one such review occurring every 5 years even if no such change has occurred, and
This post appears in the August 2021 edition of The NSW Strata Magazine.
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