This strata Q&A explaining what strata levies cover has been answered by our WA Strata helper – Strata Martyr.
Question: What do strata levies cover? I feel I receive nothing for the fees I pay. There are many problems around the building. Nobody seems to care about the complex or the people who live here.
I am a pensioner and the owner of a small unit in a WA strata complex. I pay Strata fees every 3 months. They are around $700 each quarter.
I feel I receive nothing for the fees I pay. There are many problems around the building. Nobody seems to care about the complex or the people who live here.
We do not have a Caretaker or somebody who maintains the building and common areas. No-one on the Council of Owners seems to have any idea about what they are required to do.
Answer: When you own a unit in a strata scheme, you own property “in common” with a bunch of other owners.
With the ever-rising cost of living, we all feel the pinch as nothing is free. There are many variables to consider and your costs for Strata Levies reflect those variables.
What Do Strata Levies Cover?
When you own a unit in a strata scheme, you own property “in common” with a bunch of other owners. In common means joint ownership of some or all of the buildings and land.
As you own your property in common, you are required to be a company. In this case, a Strata Company. Company law can also apply. In this company, you are a Director along with all of the other owners.
You can be held accountable, along with the other owners/directors, for failure to comply with the laws governing Strata Complexes in WA.
Ignorance of the law is no excuse if you are being sued e.g. if there is a pothole in the driveway and it is not repaired in a timely manner and someone living at the complex, visiting or a tradesperson doing work trips may trip on the pothole breaking his/her leg. If an insurance assessor deems your complex is run down or a pothole has been left to grow larger, you may void any cover you thought you had under the Strata Complex insurance.
Each Strata Complex has a Strata Plan. This plan has vital information on it. The Strata Plan states what each individual owns and what is common property or jointly owned.
If you have a small unit but it is in a strata complex of 100 units that indicates a large asset and common grounds which may include lifts, swimming pools, spas, large gardens, gyms, mechanical services, fire equipment, driveways, parking, common laundry, undercover parking, security, auto gates, CCTV, trees, bitumen, paving, barbecue areas, patios. The Strata Company must repair, maintain or replace any item of common property in need of maintenance. This maintenance what your strata levies go towards.
The Lot Owners are the Strata Company.
The Strata Complex must be insured.
You are a part owner in the complex.
At a General Meeting, Owners have the power to make decisions. One of those decisions is to elect a group of owners to oversee the running and management of the complex until the next AGM. As there is a considerable amount of administration required, the group of elected owners may choose to delegate those duties via the services of a Strata Management Company.
The Strata Manager acts as your administration arm – collecting funds, issuing invoices and paying bills, advising the elected owners on matters of compliance and the associated paperwork requirements.
Your $700 levy was approved by the Owners at a general meeting, along with approval of the budget, and may be made up of a Reserve Levy also (for future works). This will be apparent when reading the minutes of the general meeting. The owners must try and approve a sufficient Budget for expenses for the following year. This is usually based on the actual costs from the previous 12 months, with some variation if other works are planned.
Strata complexes need to have an active elected group of owners. There are publications such as the information contained here on the LookUpStrata site and works shops available for people to get an overview of strata. Some assistance may be available from Strata Management Companies who have fact sheets and include explanatory notes with notices of meetings.
The cost of management can be greatly reduced when owners are aware of their responsibilities.
As an Owner, you are a Director. As a Director you have power. Knowledge is power. If you are ill-informed, others will have power over you.
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This post appears in Strata News #128
This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.
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