19 Jun Strata FAQs – Management, Fees, Responsibilities, Insurance, Cleaning
What is strata management? What are strata fees & strata title? Who is responsible for strata insurance & cleaning? Our strata managers answer all questions!
Strata –Your Questions Answered
Strata – for some reason, it can be a source of great confusion to many people who require strata services. Not to worry – strata is our expertise. Since we receive so many queries, we thought we’d take this opportunity to answer some frequently asked questions around common topics regarding strata management, owners corporations, and responsibilities around fees, insurance and maintenance.
Let’s dive in!
What does strata mean? Is it the same as a strata property?
The term “strata” can have different meanings depending on the context. In general, a good strata definition is: layers or divisions that are stacked or arranged in a hierarchical manner. When you think about shared apartment blocks, that makes sense, right?
Therefore, when it comes to property, we define “strata” in relation to strata properties or strata title properties. In real estate, a strata property is a form of property ownership where individuals own a specific unit or lot within a larger building or development. This type of property ownership is commonly associated with condominiums, apartments, townhouses, or any development with multiple units. Each unit owner holds a strata title, which grants them exclusive ownership of their individual unit as well as shared ownership of common areas and facilities.
When considering what a strata property is, we can say it is typically governed by a strata corporation or homeowners’ association. This may also be known as a body corporate strata group, which is responsible for managing and maintaining the common areas, enforcing bylaws and interpreting strata law, collecting strata fees from the individual owners and other diverse tasks. Strata properties often have a strata council or committee comprised of elected owners who make decisions on behalf of the strata corporation.
To sum up, when people ask “what is strata” in the context of property, strata specifically refers to a type of ownership arrangement for multi-unit developments.
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What are strata fees? Are they the same as strata levies, and what does strata cover?
Strata fees and strata levies are the same thing. Strata fees pay for keeping your building in good condition – from changing lightbulbs and removing graffiti to more serious repairs which retain or improve your property’s value. Basically, strata fees cover everything you would need to consider if you were the sole owner of a house; a strata fee is there to ensure that you don’t have to concern yourself with fixing up the areas outside of your own individual home.
A strata fee is collected from members (typically those who live in a strata property, or sometimes an owner who isn’t living there) and then used to pay the expenses of the owners corporation arising from such obligations. Strata fees would cover expenses such as:
- maintenance such as caretaking;
- services such as electricity for common lighting;
- repairs such as replacement of a broken gate.
- insurance;
- administration expenses such as bank fees;
The annual budget to meet these expenses is approved by members at the annual general meeting, and this is typically how an owners corporation will figure out how much strata fees will be. This results in fee notices issuing to owners obliging the payment of fees.
Some (but not all) owners corporations have a maintenance fund intended to meet the cost of maintenance and repair of major capital assets over a 10 year period. Contributions to the maintenance fund are included in the annual budget.
Special levies may be struck to meet extraordinary items of expenditure not included in the annual budget. An example would be replacement of a fence.
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What is strata title? Is a strata plan the same thing?
Strata title refers to a system of property ownership commonly used in multi-level apartment buildings, condominiums, or townhouses. It allows individuals to own a specific unit within a larger building or development, along with a share in the common areas and facilities.
Sometimes these units are referred to as lots; the term “strata title” means a lot affected by an owners corporation or as a general description of lots which are owned by members of the owners corporation.
The plan of subdivision, which is sometimes called the strata plan, is the document setting out the extent of lots affected by the owners corporation and the common property for which the owners corporation is responsible. It is lodged with the Registrar of Titles.
In a strata title system, the land is commonly owned by a legal entity known as the management corporation, body corporate, or strata corporation. This entity is typically created when the development is first established, and it represents the collective ownership of the land and common areas by all the individual unit owners.
While the individual unit owners have exclusive ownership rights over their respective units, the land on which the development is built and the common areas are owned jointly by all the unit owners through their ownership shares in the management corporation.
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What is strata management? What does a strata manager do?
A strata manager is appointed to undertake administrative duties, giving effect to the decisions of members and the committee such as. In accordance with the strata schemes management act 2015, things a strata manager does include:
- obtain quotations for proposed works;
- authorising contractors to undertake work on the common property;
- issuing fee notices;
- paying invoices for goods and services provided to the owners corporation;
- producing annual financial statements;
- preparing notices of meetings, attending and producing minutes of those meetings;
- maintaining accounting and other records;
- advising the owners corporation on procedural matters.
Strata managers undertake such duties so that members don’t have to. A good strata company will have a strong relationship with the strata committee in order to maintain faultless strata management services.
Strata management laws may differ one state to another and local knowledge is valuable; strata
bylaws may differ from one apartment block to another, so if you are in South Australia or New South Wales, for example, make sure you engage a trusted local company rather than one based in Victoria, who may not have the requisite expert knowledge to maintain efficiency in the local context.
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What is strata insurance and does it cover strata repairs? What about hygiene – who is responsible for strata cleaning?
An owners corporation is responsible to insure common property for the full value of its reinstatement and for public liability from incidents on the common property. Most owners corporations are obliged to insure all buildings affected by the owners corporation including those parts of buildings within owner’s lots. The insurance does not include a lot owner’s goods and belongings such as furniture; an owner’s personal contents insurance should cover that risk.
An owners corporation repairs and maintains common property, which includes cleaning and caretaking as required. The cost is met from members’ contributions. Strata cleaning is carried out by contractors engaged for the purpose with the frequency and extent of cleaning is determined by members, which may be detailed by specific strata by laws decided by the owners corporation.
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What are strata bylaws?
Strata bylaws, also known as strata regulations or rules, are a set of governing rules and regulations that are established by the management corporation or body corporate of a strata-titled property. These bylaws are designed to regulate the behaviour and conduct of the individual owners and occupants within the strata scheme, ensuring harmonious living and the proper use and management of the property. They will typically detail what you need strata approval for, and who is responsible for strata concerns of various types.
What is a strata committee? If I need a strata report, should I go to them?
A strata committee is appointed at the annual general meeting consisting of volunteer members of the owners corporation. A committee is delegated the authority to determine matters on behalf of the owners corporation so as to provide flexibility and responsiveness in decision making. A committee consists of between 3 and 7 members.
Obtaining a strata report will typically involve consulting your strata management; it would not be considered the remit of a strata committee. A strata report is a comprehensive document that provides detailed information about a property that is subject to strata title ownership. It is typically obtained by prospective buyers or interested parties to gain insights into the financial, legal, and administrative aspects of a strata-titled property before making a purchase decision.
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What is an owners and owners corporation certificate? When is it required?
An owners corporation certificate sets out information regarding the owners corporation generally such as insurance, funds held and notices served on the owners corporation. It also discloses matters relevant to the particular lot for which it is sought such as the annual fees and any outstanding fees at the date of issue. The matters to be disclosed are prescribed by legislation.
A certificate is normally is normally obtained by a vendor for inclusion in a contract of sale of a lot. If an owner is seeking to refinance a lot, the lender may require a certificate is obtained. A purchaser may also wish to obtain a certificate prior to settlement to verify details regarding the owners corporation.
A fee prescribed by the state government applies to any party seeking a certificate.
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In conclusion, hopefully this answers all of your questions about strata!
Still have questions about strata? Contact us – we’d be happy to help!