WA: Q&A What Do Strata Levies Cover? How are Increases Calculated?

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These strata Q&As explain what strata levies cover and how strata levy increases work.

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• QUESTION: Our Council of owners have increased our strata fees mid-way through a quarter and have charged the fees for the whole quarter. Should they have not charged pro-rata?
• QUESTION: Our latest strata fee notice shows an increased from $197 to $279 a quarter. Can the strata company increase the levies by any amount they want?
• 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.

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Question: Our Council of owners have increased our strata fees mid-way through a quarter and have charged the fees for the whole quarter. Should they have not charged pro-rata?

Our Council of owners have increased out strata fees mid-way through a quarter and have charged the fees for the whole quarter.

Should they have not charged at a pro-rata basis ie so many days at the old rate and the rest at the new rate or charged the new rate for the next quarter?

They will not enter into any discussion about the matter with lot owners.

Answer: Strata levies are determined at every AGM or if need be at an EGM by the strata company and the council of owners can only levy on owners what the strata company has determined.

Strata levies are determined at every AGM or if need be at an EGM by the strata company and the council of owners can only levy on owners what the strata company has determined. I would suggest that you get a copy of the latest AGM and or EGM minutes and see what was resolved concerning the budget and the accompanying levies and when they were to be invoiced to owners and how the initial levy amount was to be structured.

As levy are normally invoiced quarterly it would not be unusual to change the amounts from the commencement date of the subsequent quarter after the AGM or if an EGM had been a called.

Again, check the minutes and if they are not forthcoming under the Strata Titles Act 1985 Sections 107 and 109 you do have the right as an owner to inspect the records of the strata company, there will be fees involved however the regulations determine what fees can be charged to access the information.

Your first step is to access the minutes. These should be forwarded to all owners within a reasonable time after the meeting.

Brian Rulyancich
StrataTAC
T: 0428 970 067
E: [email protected]

This post appears in Strata News #403.

Question: Our latest strata fee notice shows an increased from $197 to $279 a quarter. Can the strata company increase the levies by any amount they want?

My wife and I own a townhouse in a strata complex of 9 in Western Australia. We are owner-occupiers and have owned the property since it was built 8 years ago.

We’ve just received our latest strata fee notice which has increased from $197 to $279 a quarter. Can the strata company increase the levies by any amount they want?

Answer: The Council of Management cannot make a decision to increase the levy payments themselves and can only collect the monies as determined and agreed at the Annual General Meeting.

The Strata Company (all owners collectively) go through a formal process annually to discuss the planning for the upcoming year. Every owner should be provided with a copy of the intended business for that meeting, including the estimates of the expenditure and the monies to be collected from the owners to meet that expenditure. These items are then voted on and carried by a majority of the owners at that meeting.

The Council of Management cannot make a decision to increase the levy payments themselves and can only collect the monies as determined and agreed at the Annual General Meeting.

It would be important to view the notice and minutes of the Annual General Meeting that agreed to this considerable increase in the fees to be able to determine the reasons behind the increase.

Determine what your strata levies cover

If the Strata Plan is such that the external walls and roof area are common property, then the Strata Company may be gathering funds for painting of the complex, or fairly major roof works as the property is now 8 years old and may be starting to show signs of wear and tear.

It is a matter to be looked at holistically with all aspects to be considered such as the boundaries of the Strata Plan, the formalities of the recent AGM and the adopted budget and proposed works (expenditure) to be reviewed.

Shelley Fitzgerald
Allsorts Community Strata
P: 0423 243 100
E: [email protected]

This post appears in Strata News #279.

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.

Strata Martyr

This post appears in Strata News #128.

Have a question about what strata levies cover or something to add to the article? Leave a comment below.

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This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.

Please note this advice was provided prior to the proclamation of the new strata title amendments and will be updated in due course.

Related posts:

• WA: Q&A Strata Neighbour Noise Due to Hard Flooring
• WA: Q&A Lot Owner’s Overdue Strata Levies. What are the rules?

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