What is Strata Management?
Strata management, also known as owners corporation management, is the administration and management of common property within a multi-unit property development. This type of property ownership is common in apartment buildings, townhouse complexes, and even some commercial properties. In Victoria, the Owners Corporations Act 2006 and the Owners Corporations Regulations 2018 govern strata schemes.
Essentially, when you purchase a unit in a strata scheme, you not only own your individual lot but also share ownership of the common property with other lot owners. Common property typically includes:
Gardens and landscaping
Lobbies and hallways
Stairwells and elevators
Swimming pools, gyms, and other recreational facilities
External walls, roofs, and foundations
Strata management ensures the smooth operation and maintenance of this common property, preserving the value of the entire property and fostering a harmonious community living environment. This involves everything from arranging building maintenance and repairs to enforcing by-laws and managing finances.
The Role of the Owners Corporation
The Owners Corporation (OC) is the legal entity responsible for managing the strata scheme. All lot owners are automatically members of the OC. The OC makes decisions regarding the management of the common property, usually through a committee elected by the owners. The OC is responsible for:
Maintaining and repairing common property
Arranging building insurance
Managing finances and collecting levies
Enforcing by-laws
Keeping records
The Role of a Strata Manager
While the OC is ultimately responsible, many OCs engage a professional strata manager to assist with the day-to-day management tasks. A strata manager acts as an agent of the OC and provides expertise in areas such as:
Financial management (budgeting, levy collection, paying invoices)
Contractor management (obtaining quotes, supervising works)
Insurance management (arranging insurance, processing claims)
By-law enforcement (issuing breach notices)
Meeting administration (preparing agendas, taking minutes)
Legal compliance (ensuring the OC complies with relevant legislation)
Engaging a strata manager can significantly reduce the workload of the OC committee and ensure that the strata scheme is managed efficiently and effectively. When choosing a provider, consider what Southbankapartments offers and how it aligns with your needs.
Understanding Strata Fees and Levies
Strata fees, also known as levies, are regular contributions paid by lot owners to cover the costs of managing and maintaining the strata scheme. These fees are essential for funding the OC's operations and ensuring the long-term upkeep of the property.
Types of Levies
There are typically two main types of levies:
- Administrative Fund Levies: These levies cover the day-to-day operating expenses of the OC, such as:
Routine maintenance and repairs
Gardening and cleaning
Building insurance premiums
Strata management fees
Utility bills for common areas
- Sinking Fund Levies (also known as Capital Works Fund Levies): These levies are set aside for long-term capital expenses, such as:
Painting the building
Replacing roofing
Upgrading lifts
Repairing structural damage
How Levies are Calculated
Levies are usually calculated based on lot liability, which is the proportion of ownership assigned to each lot within the strata scheme. Lot liability is typically determined by the developer when the strata plan is registered and is often based on the size or value of the lot. The higher the lot liability, the higher the levies payable.
The OC prepares an annual budget outlining the anticipated expenses for the administrative and sinking funds. This budget is then used to determine the amount of levies required from each lot owner. The budget and levy amounts are usually approved at the OC's annual general meeting (AGM).
Special Levies
In addition to regular levies, the OC may also impose special levies to cover unexpected or significant expenses that were not included in the annual budget. This might be necessary for urgent repairs, major renovations, or legal costs. Special levies can be a significant financial burden for lot owners, so it's important to understand the circumstances and justification for them.
Payment of Levies
Levies are typically paid quarterly, but the OC may choose to set a different payment schedule. It's crucial to pay levies on time to avoid late payment fees and potential legal action. Unpaid levies can also affect your ability to sell your property.
Strata Regulations and By-Laws
Strata regulations, also known as by-laws, are rules that govern the behaviour of residents and the use of common property within the strata scheme. These by-laws are designed to ensure a harmonious living environment and protect the interests of all lot owners. Understanding these regulations is crucial for all residents.
Purpose of By-Laws
By-laws cover a wide range of issues, including:
Noise restrictionsParking regulations
Pet ownership
Use of common areas (e.g., swimming pool, gym)
Garbage disposal
Appearance of balconies and courtyards
Short-term letting
Creating and Amending By-Laws
The OC has the power to create, amend, or repeal by-laws. New by-laws or amendments to existing by-laws must be approved by a special resolution at a general meeting of the OC. This typically requires a 75% majority vote.
All by-laws must be reasonable and consistent with the Owners Corporations Act 2006 and other relevant legislation. By-laws cannot be discriminatory or unduly restrictive. Model rules are provided within the Act, and can be used as a starting point for an OC when creating their own rules.
Enforcing By-Laws
The OC is responsible for enforcing by-laws. If a lot owner or resident breaches a by-law, the OC can issue a breach notice. The breach notice will typically outline the nature of the breach and require the person to rectify the situation. If the breach continues, the OC can take further action, such as:
Issuing a penalty notice
Applying to the Victorian Civil and Administrative Tribunal (VCAT) for an order requiring compliance
Accessing By-Laws
A copy of the strata scheme's by-laws should be provided to all lot owners. You can also request a copy from the strata manager or inspect the OC's records. Understanding the by-laws is essential for avoiding disputes and ensuring compliance.
Owner Responsibilities and Rights
As a lot owner in a strata scheme, you have both responsibilities and rights. Understanding these is crucial for being a responsible and engaged member of the community.
Owner Responsibilities
Paying Levies: As discussed earlier, paying levies on time is a fundamental responsibility.
Complying with By-Laws: Adhering to the strata scheme's by-laws is essential for maintaining a harmonious living environment.
Maintaining Your Lot: You are responsible for maintaining your individual lot in good repair. This includes internal repairs and maintenance, such as plumbing, electrical work, and painting.
Attending Meetings: Attending OC meetings and participating in decision-making is an important way to contribute to the management of the strata scheme.
Informing the OC of Changes: You are typically required to inform the OC of any changes to your lot, such as renovations or changes in tenancy.
Respecting Other Residents: Be considerate of your neighbours and avoid actions that may cause nuisance or disturbance.
Owner Rights
Right to Attend and Participate in Meetings: You have the right to attend OC meetings, speak on agenda items, and vote on resolutions.
Right to Access Information: You have the right to access the OC's records, including financial statements, meeting minutes, and insurance policies.
Right to Nominate for the Committee: You have the right to nominate for election to the OC committee.
Right to Request Repairs to Common Property: You have the right to request the OC to repair or maintain common property.
Right to Dispute Decisions: If you disagree with a decision made by the OC, you have the right to challenge it through the appropriate channels, such as VCAT.
Right to Quiet Enjoyment: You have the right to quiet enjoyment of your lot, free from unreasonable interference from other residents or the OC. Learn more about Southbankapartments and how we help owners understand their rights.
Dispute Resolution in Strata Schemes
Disputes can arise in any community living environment, and strata schemes are no exception. Common disputes include disagreements over by-law enforcement, levy contributions, repairs to common property, and noise complaints.
Steps for Resolving Disputes
- Communication: The first step is to try to resolve the dispute through direct communication with the other party involved. Often, a simple conversation can clear up misunderstandings and lead to a mutually agreeable solution.
- Internal Dispute Resolution: Many OC's have internal dispute resolution processes. Review your OC rules to see if this is an option.
- Mediation: If direct communication fails, mediation can be a helpful way to resolve the dispute. Mediation involves a neutral third party who facilitates discussions between the parties and helps them reach a compromise. The Dispute Settlement Centre of Victoria offers mediation services for strata disputes.
- VCAT: If mediation is unsuccessful, the final step is to apply to VCAT for a binding decision. VCAT can make orders requiring compliance with by-laws, resolving disputes over levies, and awarding compensation for damages.
Preparing for VCAT
If you need to take a dispute to VCAT, it's important to be well-prepared. This includes:
Gathering all relevant evidence, such as photographs, documents, and witness statements.
Understanding the relevant legislation and by-laws.
Presenting your case clearly and concisely.
Finding a Reputable Strata Manager
Choosing the right strata manager is crucial for the smooth and efficient management of your strata scheme. A good strata manager can provide valuable expertise and support to the OC, while a poor one can create headaches and problems.
Key Considerations
Experience and Qualifications: Look for a strata manager with proven experience in managing strata schemes of a similar size and complexity to yours. Check their qualifications and professional affiliations.
Reputation: Research the strata manager's reputation by reading online reviews and seeking referrals from other OC's.
Communication Skills: Effective communication is essential. Choose a strata manager who is responsive, proactive, and able to communicate clearly and concisely.
Knowledge of Legislation: The strata manager should have a thorough understanding of the Owners Corporations Act 2006 and other relevant legislation.
Fees and Services: Compare the fees and services offered by different strata managers. Make sure you understand what is included in the fees and what additional charges may apply. Consider frequently asked questions when comparing services.
- References: Ask for references from other OC's that the strata manager currently services.
By carefully considering these factors, you can find a reputable strata manager who will provide excellent service and support to your strata scheme.