Strata Terms & Jargon

When dealing with Strata matters, you will come across lots of jargon, terms and ‘legalese’. You will find the following guide to the terms used, helpful.

Insurance
Owners Corporation
Levies
By Laws
Resolving disputes
Records to be kept
Strata Managing Agents
Executive Committee
Buying a Strata Unit
The GST / Taxation
Buying off the plan
Meetings
Building maintenance

STRATA TERMS
The management of a strata scheme is governed by the Strata Schemes Management Act (SSMA) 1996. If you require further detailed information, you should refer to that Act.

ADMINISTRATIVE FUND
Levies are paid into this fund to cover day-to-day expenses of the owners corporation, i.e. electricity, gardening, insurance, routine repairs and maintenance of common property.

AGENDA
A list of motions to be voted upon at a meeting.

AGGREGATE UNIT ENTITLEMENT
The total of all the individual unit entitlements in the strata scheme

CERTIFICATE OF TITLE
A deed issued by the Land Titles Office to prove ownership of a lot. The owners corporation is also issued with a title deed for the common property.

COMMON SEAL
The owners corporation has a seal styled “The owners – Strata Plan…..” and this must be affixed whenever the owners corporation executes a document.

CERTIFICATE (Section 109)
Certificate issued by the strata managing agent or authorised person of the owners corporation It contains details of levy contributions, insurances, executive committee, etc. A statutory fee is payable to the owners corporation.

COMMON PROPERTY
The area of land and building in the strata scheme which do not form part of any lot

COMPANY NOMINEE
A company must authorise a person in writing to vote at meetings on its behalf. A notice must be served on the owners corporation

EXCLUSIVE USE
This is when a special right is granted to an owner to use part of common property i.e. exclusive use of a car space located on common property.

EXECUTIVE COMMITTEE
Elected representatives of the owners. Election takes place at each annual general meeting. The powers of the Executive Committee are limited under the Strata Schemes Management Act 1996 but the owners corporation may also impose additional restrictions.

GENERAL MEETING
A meeting of owners and other interested parties (as noted on the strata roll) who have been advised by notice of a proposed meeting. The owners corporation is required to convene and hold a general meeting once a year. This must be held on a date not earlier than one month before nor later than one month after each anniversary date of the First Annual General Meeting.

INITIAL PERIOD
The period from the date of registration of the strata plan until the completion of the sale of one third of the aggregate unit entitlement. There are certain restrictions during the initial period. For detailed information refer SSMA.

LEVIES
Contributions paid by owners to the owners corporation to cover expenditure and allocation for capital expenditure. These are usually paid quarterly and the amount is based on unit entitlement.

LOT
In a strata scheme, a unit is referred to as a “lot”. Car spaces, garages, laundries, marinas can also form part of a lot or be a separate lot.

MOTION
A proposal for consideration by a meeting.

ORIGINAL OWNER
The owner of the strata scheme when the strata plan is registered

OWNERS CORPORATION
Collectively the owners of the lots in the strata scheme. This is formed when the strata plan is registered.

PROXY
A person appointed in writing by an owner or mortgagee to attend an owners corporation meeting and vote on that person’s behalf.

SINKING FUND
Levies paid into this fund cover renewal and replacement of fixtures and fittings, eg painting, stairwell carpets.

SPECIAL LEVY
Lump sum contribution to cover either unplanned or underestimated expenditure.

STRATA MANAGING AGENT
Licensed strata managing agent appointed by the owners corporation to manage the strata scheme and delegated certain functions. Appointment must be at a general meeting of the owners corporation and a strata managing agency agreement must be executed by 2 members of the executive committee and the strata managing agent.

STRATA PLAN
This is the plan registered at the Land Titles Office which shows the building on the land indicating lots and common property.

STRATA ROLL
This is a register of the owners of each lot in the strata scheme. It also includes the name of any mortgagee, covenant chargee or lessee (if notified).

STRATA SCHEMES MANAGEMENT ACT 1996 (SSMA)
The legislation under which all strata matters are dealt with in NSW. For a copy of the act and regulations click here.

UNIT ENTITLEMENT
Each lot is given a “unit entitlement” and this is shown on the strata plan. The amount of the unit entitlement varies depending on a number of factors, i.e. size of lot. Levies payable are calculated on the basis of unit entitlement.

QUORUM
Before any motion can be voted upon at a meeting, a quorum must exist, i.e.

• 25% of those entitled to vote OR
• owner/owners holding 25% or more of the total unit entitlements
• A quorum must consist of at least 2 persons.

At executive committee meetings, a quorum is constituted when half of the members are present

STRATA SCHEMES OFFICE
This office is part of the Department of Fair Trading and provides various services and assistance in strata matters. It also provides a mediation and adjudication service.

SPECIAL RESOLUTION
A motion against which not more than 25% of the value of the vote is cast (based on unit entitlement).

UNANIMOUS RESOLUTION
A motion against which no vote is cast.

RESOLUTION
A decision made at a meeting.
OLD VS THE NEW

On 1July 1997 the Strata Titles Act, 1973 was replaced by the Strata Schemes Management Act, 1996. This Act brought many changes including a change in terminology.

OLD NEW
Body Corporate Owners Corporation
Body Corporate Council Executive Committee
Office Bearers Office Holders
Original Proprietor Original Owner
Proprietor Owner
Strata Titles Act, 1973 Strata Schemes Management Act 1996
Strata Titles Board Strata Schemes Board
Strata Titles Commissioner Strata Schemes Commissioner

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OWNERS CORPORATION (FORMERLY BODY CORPORATE)

“The Owners Corporation (which was formerly known as the Body Corporate) is the governing body that looks after the strata plan. Here are some guidelines on the functions of this entity”.

When does the owners corporation commence?
The owners corporation comes into existence when the strata plan is registered at the Land Titles Office.

What happens after registration of the strata plan?
After registration of the strata plan, during the initial period, the original owner has certain obligations and responsibilities.

First Annual General Meeting (AGM)
The original owner is responsible to convene and hold the First Annual General Meeting within 2 months of the expiration of the initial period, irrespective of whether or not they still own any lots in the scheme.

A notice of meeting must be sent to each owner, first mortgagee and covenant chargee, as shown on the strata roll. 14 clear days notice must be given.

There is a statutory agenda contained in the SSMA for motions to be decided upon. These include:

• insurances
• levy contributions
• election of executive committee
• restricted matters
• by-laws
• managing agent
• accounting records
• appointment of auditor

If the original owner still owns 50% or more of the aggregate unit entitlement and a vote by special resolution or poll is requested, the value of the original owner’s vote is reduced to 1/3 of his unit entitlement.

If the original owner fails to hold the First Annual General Meeting , the Strata Schemes Office adjudicator must appoint a person to hold that meeting.

DOCUMENTS
At the First Annual General Meeting, the original owner must give to the owners corporation:

A. All plans, specifications, certificates (other than certificates of title for lots), diagrams and other documents (including policies of insurance) obtained or received by the owner and relating to the parcel or building.

B. The certificate of title for the common property, the strata roll and any notices or other records relating to the strata scheme, if they are in the owner’s or lessor’s possession or under the owner’s or lessor’s control,

C. The accounting records and the last preceding financial statements prepared.

What happens after the first AGM?
Ongoing management continues under the requirements of the Strata Schemes Management Act 1996 (SSMA).

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RECORDS TO BE KEPT

“When dealing with Strata plans it’s important that all books and records are kept totally up to date. The Owners Corporation must keep these at all times. Here is a brief guide to the sorts of books and records you should keep”.

BOOKS & RECORDS
The Strata Schemes Management Act 1996 (SSMA) requires that certain books and records be maintained:

• Strata Roll
• Minute Book
• Cash Books (cash payments & cash receipts)
• (separate accounting records must be maintained for administrative & sinking funds but monies can be retained in the same bank account)
• Receipt Book
• Passbook, bank deposit book
• Levy Register
• Annual financial statement (for a period from the date of the last financial statement up to a date not earlier than 2 months before the date of the annual general meeting at which the statements are tabled)
• Register of Notices & Orders

Section 109 certificates
This is a certificate issued by the owners corporation giving details about:

• insurance
• executive committee
• current levy contributions
• any special levies
• levy amounts outstanding
• by-laws made by owners corporation within the past 2 years which have not been registered at the Land Titles Office.

There is a set form under the Regulations of the SSMA and the common seal of the owners corporation must be affixed. The certificate may only be completed by an appropriately authorised person.

HOW LONG MUST DOCUMENTS BE KEPT?
To be kept for at least 7 years

• all accounting records
• minutes of meetings

To be kept for at least 6 years

• notices of meetings
• orders
• correspondence
• notices

To be kept for at least 1 year

• proxies (after proxy expires)

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EXECUTIVE COMMITTEE

“Every Strata Scheme has to have an Executive Committee. There can be a minimum of 1 and maximum of 9 members. Here is a guide to what makes up a typical Executive Committee’.

THE EXECUTIVE COMMITTEE
This committee is made up of representatives of the owners corporation elected at each annual general meeting. Apart from the office holders, the office bearers of chairperson, secretary and treasurer are elected. There can be a minimum of 1 and maximum of 9 members.

Office holders are elected at the executive committee meeting following the Annual General Meeting. Even if there is a strata managing agent and certain duties have been delegated to them, the secretary and treasurer are still able to exercise their powers, if they choose to do so. In most instances the strata managing agent normally performs all the functions of the secretary and treasurer and they operate in a supervisory position.

In a scheme where there are only 2 lots, the executive committee comprises the two owners. Any decision made by the executive committee is treated as a decision by the owners corporation provided the motion does not relate to a restricted matter which must be decided by the owners corporation at a general meeting

What is the purpose of an Executive Committee?
To attend to the administration of the day-to-day running of the strata scheme. Often this is in liaison with a professional strata managing agent.

Under the Strata Management Act 1996 the chairman, secretary and treasurer have certain functions, some of which are listed below:

Chairman: Preside at meetings conduct meetings, decide on issues relating to voting and procedure.

Secretary: Convene meetings (executive committee & general) prepare & distribute minutes of meetings attend to correspondence on behalf of owners corporation maintain administrative and secretarial records of owners corporation (including strata roll).

Treasurer: Issue levy notices receipt and bank monies on behalf of owners corporation prepare Section 109 certificates prepare financial statements and other financial records maintain accounting records.

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THE GST – TAXATION

“The GST will mean changes to your strata – but don’t worry – I can help you. Also, the Strata Schemes Management Act has certain requirements regarding preparation of annual accounts. (see below)”

THE GST AND STRATA
GST commenced 1 July, 2000. There has been an increase in administration and accounting paperwork for owners corporations. Self managed schemes should seek advice from specialist strata accountants. If increased administrative and accounting work is not welcomed, seek a quotation from a professional strata managing agent to administer the affairs of the owners corporation.

There are many traps in dealing with GST requirements. The owners corporation has to address such things as whether they are required to register with the Australian Taxation Office, if total levy and other income is below $50,000 whether registration is the preferred option, can owners claim input tax credits, how to deal with suppliers who do not have an ABN, withholding tax for non-ABN suppliers, lodgments of Business Activity Statements, general GST requirements and many other issues.

Owners corporations should look carefully at all their suppliers, ie whether they have an ABN and whether they are registered as this will impact on the owners corporation.

The GST issues affecting an owners corporation are very complex. Further information can be obtained from the Australian Taxation Office internet site which is located at www.ato.gov.au

GST/TAXATION
Taxation implications for a strata scheme involve:

• income tax
• GST
• non-mutual income (eg income from non-owners such as payment from communications companies for erecting transmission towers on buildings)

ACCOUNTING/AUDIT
The Strata Schemes Management Act has certain requirements regarding preparation of annual accounts. Unless your strata scheme is managed by a professional strata managing agent, professional accounting advice should be sought. Apart from compliance with legislation intending purchasers of units in the strata scheme would require that the records be correctly maintained.

Whether your strata scheme is managed by the owners or by a professional strata managing agent, there are many benefits for the strata scheme in having its accounts examined by an independent auditor.

Talk to an accountant experienced in the intricacies of strata scheme finances.

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MEETINGS

“By law, Strata schemes legislation requires the Owners Corporation to hold various meetings from time to time. Listed below is an explanation of the various types of meetings you may need to be involved in”.

MEETINGS
There are various types of meeting:-
• Inaugural Meeting (held immediately after registration of the strata plan)
• First Annual General Meeting (compulsory meeting which must be held within 2 months of 1/3 of the aggregate unit entitlement being sold)
• Extraordinary General Meeting (all general meetings that are not annual general meetings)
• Executive Committee Meeting (meeting of executive committee members)

The Annual General Meeting must be held each year on a date not earlier than one month before, nor later than one month after the anniversary date of the First Annual General Meeting.

When are General Meetings held?

• each year within the required timeframe
• when a special matter needs to be considered ie major works, to raise a special levy, change by-laws, appoint a strata managing agent
• when a requisition is received for an extraordinary general meeting signed by one or more persons entitled to vote in respect of one or more lots, the unit entitlement of which is at least a quarter of the aggregate unit entitlement

How is a General Meeting convened?

• A notice is forwarded to owners, first mortgagee and covenant chargee by strata managing agent or secretary of owners corporation
• By majority vote of executive committee
• A general meeting requires 7 clear days notice. The First Annual General Meeting requires 14 clear days notice.

What must the agenda of an annual general meeting contain?

• Copy of the last financial statement of the owners corporation
• Copy of minutes of last general meeting (if not already provided)
• Motion to confirm minutes of last general meeting
• Motion to accept last financial statement
• Information about each current insurance policy held by owners corporation
• Motion to consider appointing an auditor
• Motion to consider taking out insurances for office holders and misappropriation of funds
• Motion to decide on number of executive committee members
• Motion to elect executive committee members
• Information about voting rights & quorum
• Proxy form

There must be a clear note if any resolution requires a unanimous or special resolution.

How do I request something to be included in an agenda of a general meeting?
If you are entitled to vote at a general meeting, you may give written notice to the secretary of the owners corporation

How are meetings conducted?

The chairperson of the owners corporation must preside at a general meeting if they are present. If they are not present, the meeting must elect a person to chair that particular meeting.

Who is entitled to vote?

• The owner, first mortgagee or covenant chargee of a lot recorded on the strata roll
• Only those owners whose levy payments are not in arrears
• A person who has been appointed in writing by a company as its company nominee
• A properly appointed proxy

What if a quorum is not present?
If a quorum is not present within 1/2 hour of the time for commencement of the meeting, the meeting must be adjourned. The chairperson presiding at the meeting must state the time and place for the adjourned meeting. It must be adjourned for at least 7 days. Notice of the time, date and place must be served by the secretary on the owners at least 1 day prior to the meeting.

PROXIES
For a proxy to be valid it must be:

• In the form prescribed by SSMA Regulations
• Given to the secretary of the owners corporation before or at the commencement of the meeting.

NOTE:

• A proxy must state the period it is valid (ie not more than 12 months or for 2 consecutive annual general meetings, whichever is the greater
• If the person who gave the proxy attends the meeting and votes in person, the proxy has no effect
• If more than one proxy is available, the most recent proxy is valid

MOTIONS/RESOLUTIONS

A MOTION MUST:

• Clearly state the proposal to be considered at the meeting
• State a special or unanimous resolution is required
• Generally, resolutions are decided by a simple majority (ordinary resolution). This is either by numbers or in the event of a poll by unit entitlement.

There are certain matters that can only be decided by:

• SPECIAL resolution ie change by-laws, granting exclusive use of common property
• UNANIMOUS resolution ie sale of common property

POLL
This is when a vote is decided by the value of the votes. The value is the unit entitlement of each lot. While the original owner owns half or more of the aggregate unit entitlement their vote is reduced to 1/3 of their aggregate unit entitlement. Any owner present and voting can request a poll.

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INSURANCE

“STOP! Whatever you do, don’t get caught out by failing to take out the right insurances. There are several types of insurance required. Here is a short list but check your requirements with an insurance company that specialises in strata insurance”.

BUILDING
The owners corporation has a duty to cover the building in the strata scheme under a damage policy with an approved insurer. For details of what is included in the definition “building” refer to the SSMA

This requirement does not apply for 2 lot schemes where the buildings are detached and no building or part of the building in the strata scheme is situated outside those lots. Also, the 2 owners must decide by unanimous resolution that the owners corporation will not effect insurance.

In the SSMA there is a prescribed calculation of the sum insured. The amount is calculated by adding the estimated cost of:

• Replacement of the building
• Removal of debris
• Professional fees, ie architect, engineer, etc.
• Increase during the 18 month period following the date of commencement of the damage policy

Note:
A valuation of the building must be carried out at least once every 5 years and the building insured for that amount. This valuation must be carried out by a qualified valuer or quantity surveyor.

PUBLIC LIABILITY
The owners corporation is required to insure against death or injury to a person or damage to property for which the owners corporation could be held responsible. The minimum cover is $10,000,000.

WORKERS COMPENSATION
Where Workers Compensation legislation requires the owners corporation to take out workers compensation insurance, this must be effected. Specific information should be obtained from either Workcover or an insurance broker.

VOLUNTARY WORKERS INSURANCE
The owners corporation is required to insure against any damages it could be held responsible for in the case of a person acting on behalf of the owners corporation on a voluntary basis (not receiving any reward or fee or expecting to receive this).

MISAPPROPRIATION
The owners corporation has a choice whether to take out insurance against misappropriation of money or property of the owners corporation.

OTHER INSURANCES
Owners should carefully consider taking out contents insurance to cover fixtures and fittings, ie stove, wallpaper, curtains in the event of damage by water or fire. Public Liability insurance should also be considered for any occurrence involving their lot which is not covered by owners corporation insurance. The mortgagee of a lot may require the owner to take out specific insurance cover as part of the loan.

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LEVIES

“Certain levies must be determined and administered by the Owners Corporation and levy notices have to be issued on a regular basis. Here’s an idea of what is involved”.

The owners corporation must determine administrative and sinking fund levies. The amount of these levies must be supported by a budget which must be tabled at a general meeting. The budget must take into account actual and expected expenditure and the existing financial situation of the owners corporation. Levies are generally determined at each annual general meeting. The owners corporation must make its first determination of levies within 14 days of its constitution (ie when the strata plan is registered). The amount of levies is payable by owners based on the unit entitlement of the lot. Levies are usually payable quarterly and a levy notice is issued by the treasurer of the owners corporation or the managing agent.

What if there are insufficient funds in either administrative or sinking fund and an expense has to be paid?

• the owners corporation is permitted to transfer monies from one fund to another but this money is to be repaid within 3 months by way of special levy.

INTEREST
If a levy is not paid within 1 month after it is due, interest accrues at 10% per annum.

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RESOLVING DISPUTES

“Strata living can often lead to disputes between the various strata owners. These should be addressed in a proper manner and dealt with as quickly as possible before they boil over into a more serious situation. Here are a few ideas for dealing with disputes”.

DISPUTES
Sometimes living in a strata complex disputes can arise between owners. The best way to resolve this is for owners to talk through the problem with each other. If a dispute cannot be resolved between owners, a mediation service is available through the Strata Schemes Office. If this is not successful, an application may be made to the Strata Schemes Adjudicator. For detailed information about the mediation or adjudication process, contact the Strata Schemes Office or a strata law specialist.

What types of disputes can arise?

• Parking on common property without approval
• Noise
• Alterations to common property
• Damage to ceilings or walls due to water penetration
• Keeping pets without approval from the owners corporation

The mediation and adjudication process is quite complex. It is best to seek assistance from a strata law specialist.

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STRATA MANAGING AGENTS

“It is highly recommended that you use a fully qualified licensed strata managing agent to look after your strata scheme. For the modest cost involved, it can save you a lot of work and a lot of heartaches”.

STRATA MANAGING AGENTS
The owners corporation may appoint a licensed strata managing agent to carry out some or all of the functions of the owners corporation.

How is a strata managing agent appointed?
This can only be done at a general meeting of the owners corporation. The strata managing agent must be appointed and functions delegated. A strata managing agency agreement must be executed by two members of the executive committee and the strata managing agent. The strata managing agent must serve a copy of the agreement on the owners corporation within 48 hours of execution.

There are certain powers an owners corporation cannot delegate to a strata managing agent. The strata managing agent cannot:

• delegate to others
• make a decision on a matter that is required to be decided on by the owners corporation
• determine levies

Even if an executive committee delegates some or all of its functions, to a strata managing agent, the executive committee may still continue to exercise all or any of its functions.

The owners corporation can appoint a strata managing agent to carry out some or all of the functions of the owners corporation. These duties can include:

• Maintain all accounting records
• Maintain trust account
• Collect and deposit levy contributions
• Issue levy notices
• Organise repairs and maintenance of common property
• Arrange quotations for services/works
• Engage cleaners & gardeners/tradespeople
• Convene & hold meetings, which include preparation of notices of meeting, attend meeting, take minutes, prepare minutes, despatch minutes of meeting
• Attend to harmony problems
• Assist auditor
• Renew insurances
• Arrange valuations
• Attend to correspondence of owners corporation
• Advice on matters involving SSMA

Looking for a good strata managing agent in the Wagga Wagga area? Look no further than:

Hore & Davies Real Estate
tel: (02) 6921 2113 fax: (02) 6921 5844
e-mail: realestate@horeanddavies.com.au

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BUYING A STRATA UNIT

“Are you thinking about buying a strata title unit, either as an investment or as your next home? If so, you would be wise to study the pages of this site and learn as much as you can about how strata schemes operate. Below is a quick check list for buyers to help them avoid some of the pitfalls and traps”.

BUYING A STRATA UNIT
Before purchasing a strata title unit, it is wise to arrange an inspection of the books and records of the owners corporation by a suitably qualified strata searcher. There are many things that are not apparent from a visible inspection of the building. There are a number of factors which can impact on you once you become the owner and it is better to be informed about these so that a prudent decision can be made BEFORE purchasing.

Purpose of a strata search

What important items should you consider?

• Is the building adequately insured?
• Is there a recent building valuation to support amount of insurance
• Does the strata scheme have an adequate sinking fund, taking into account the age of the building, the current state of repair, the type of construction
• Can I afford the quarterly levies?
• Are there any special levies planned?
• Are there any outstanding building works, unpaid invoices etc that could result in a special levy?
• Is the annual sinking fund allocation adequate?
• What are the current balances in the Administrative & Sinking Fund account?
• Are there any current or proposed litigation matters involving the owners corporation?
• Are there any limitations or restrictions on the use of common property which may affect you?
• Are there any outstanding public liability claims involving the owners corporation?
• Are animals permitted?
• Have any alterations to the unit been approved by the owners corporation, ie installation of air conditioning unit?
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BUYING OFF THE PLAN

“Some people buy units ‘off the plan’ – that is to say – they buy them before they are built from the architect’s plan. There are a number of special points you should be aware of in relation to buying this way. Here is a brief guide”.

BUYING OFF THE PLAN
When purchasing a unit “off the plan”, i.e. before the building has been completed, there are a number of things you need to attend to:

• Obtain as much information as you can from the real estate marketing company about estimated completion date, specific details of included fixtures & fittings in the unit and those in any recreation areas ie gym room, sauna, etc.
• Carefully inspect the display unit
• Carefully examine the floor plan making special note of whether it has suitable living areas, balcony areas and room location. Will your furniture fit appropriately in the style of the unit? Does the layout suit your lifestyle?
• What are the proposed levies? Is it anticipated they will increase by the time the building is completed?
• How much variation in the size of the unit (as shown on the plan compared to the final size) has the vendor nominated in the Contract for Sale? Is this acceptable? E.g. The floor plan may show a total unit area of 110 m2 but the final size is only 98 m2.
• Are there any proposed restrictions on the use of facilities?

NOTE:
Detailed advice should be obtained from your solicitor before proceeding with a purchase.

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BUILDING MAINTENANCE

“If you have money invested in a strata scheme, you’ll want to make sure your investment is protected at all times through proper care and maintenance of your building. Here is a guide to caring for your strata investment”.

PLANNED BUILDING MAINTENANCE PROGRAM
To avoid deterioration of your valuable asset, a building maintenance program should be discussed amongst owners or with your strata managing agent. The purpose of the sinking fund is to provide sufficient funds to meet expenses of a capital nature, e.g. painting, carpet replacement in the stairwells, guttering replacement, landscaping upgrading, etc.

A poorly maintained building creates a problem in the future:-

• When works are needed, if sufficient funds have not been allocated over past years, the present owners may not be in a position to contribute to a special levy.
• When you plan to sell your unit, there may be a number of maintenance issues the owners corporation has not attended to. A prospective purchaser may ask you to reduce your sale price to compensate for any special levy they may have to pay in the future. It may be difficult to sell your unit as the overall appearance of the complex may not be as attractive as other well-maintained complexes.

The owners corporation should make sure they plan for the future! As an owner in a strata scheme you have a very valuable asset that needs to be maintained and improved.

Regular Maintenance needs to be carefully programmed and planned so that the building does not deteriorate. You should consult your strata managing agent to ensure sufficient sinking fund levies are being collected to cover projected expenditure. The location of a building can often cause certain areas to deteriorate quicker than usual, eg concrete surfaces located near the ocean, stained timber windows facing west. Preventative maintenance is always better than major repairs.

A qualified professional can prepare a maintenance program to particularly suit your building and a sinking fund assessment to advise you what sinking fund levies should be paid so sufficient funds are available when work is needed – the usual time frame for these assessments is a 10 year period.

The sale price of your unit or townhouse can be dramatically affected if your building has not been maintained so remember, prevention is better than cure!

If you do not have a Planned Building Maintenance Programme in place, it is wise to engage a professional to carry out a BUILDING AUDIT to provide a report on the present condition of the building and advise on any defects or necessary repairs. A Building Audit is also very important if the owners corporation needs to determine the defects in a building to be addressed to the builder or to make any insurance claim under the Home Building Act.

MAINTENANCE & REPAIRS
Defects can develop at any time and as a building ages repairs are needed. Not all quotations are the same. Specifications should first be prepared by appropriate professionals to ensure the correct method of repair is used. It is also important that the problem is diagnosed correctly and the most economical method of repair used. Expert advice is especially needed for major works, which would include:

• roof replacement
• concrete spalling
• facade repairs
• window replacement
• archbar replacement
• waterproofing & rising damp
• water penetration
• cracking to walls/subsidence
• uplifting driveways and concrete areas
• Improving your strata complex

For older buildings, consider updating your complex to improve its appearance & value:

• rendering façade of building
• renovating foyer area
• upgrading landscaping
• replacing balcony railings with safer & more modern design
• Careful planning is necessary before commencing a large project. With the right advice and correct budget, considerable value can be added to the strata complex, which will be of direct benefit to each of the owners. Not only will they have a more stylish building to live in but the value of the unit will have increased. Obviously, units in buildings with well landscaped areas command a much higher price than units in bland unattractive buildings.

GLASS/SAFETY:
Glass breakage is a daily threat, and it usually happens at the worst possible time or in the most inconvenient location. Whether it is windows, patio doors, mirrors, shower screens or glass roofs, for safety reasons, replacement should be carried out as soon as possible

All glazing undertaken should comply with the current Australian Standard for selection and installation of glass in buildings (AS1288-94).

Building Codes are upgraded regularly. Original glazing that may have seemed adequate several years ago could well be considered extremely hazardous by today’s Australian Standards. Failure by building owners and occupiers to comply with these Standards could result in substantial damages claims should an injury occur. A “Glass Audit” can be carried out by a glass specialist to determine if your premises are glazed In accordance with Australian Standards.

PEST CONTROL
Termites and other timber destroying pests can attack strata buiildings The susceptible areas are roof timbers, subfloor timbers, exterior timber such as windows, doors, garage door frames, stairs and landings. Older buildings usually have more timber structures than newer strata buildings. Termites and borers can be in neighbouring trees and fences and unless detected and a treatment carried out, can move to the building. These pests can cause extensive damage to timbers if not detected early. Regular inspections should be carried out by a qualified pest technician. The pest technician can also advise whether the building is conducive to termite infestation and can recommend appropriate action to reduce or alleviate this.

FIRE SAFETY
The Environmental Planning & Assessment Act requires that “the owner of a building to which an essential fire safety measure is applicable, is required to maintain each essential fire safety measure in the building”. These measures include fire doors, smoke detectors, emergency lighting, exit lights, fire hose reels, etc. An appropriately qualified person (eg Fire Engineer or Building Surveyor) must inspect the fire safety measures and provide a certificate to the owners. An Essential Services Certificate must be provided to the Local Council and Fire Brigade each year and a copy displayed at the strata building.

The best solution is usually to have all consultants and contractors involved in the project working together as a team to find the best solution for your building.

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BY-LAWS

A set of “rules” that the residents (owners and tenants) in the strata scheme must follow. These can be changed at a general meeting of the owners corporation. All by-laws are not the same so it is wise to obtain a copy of the current by-laws for the strata scheme involved.

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IMPORTANT NOTE: This website deals with strata matters in NSW Australia only. Legislation varies in different states and territories and in other countries. For information pertaining to places outside of NSW, Australia , please refer to the legislation covering your location.

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