Guide to Strata Living | ASCM 2019

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Guide to Strata Living

Disclaimer The information provided in this publication is general only and is not legal, financial or personal advice. This material is provided to assist members living in strata. If further information is required, an appropriately qualified professional should be consulted.

Copyright Š Adelaide Strata & Community Management (ASCM), November 2019. Reproduction or reuse of this material is forbidden without written permission.

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HELLO AND WELCOME TO THE ASCM COMMUNITY Whether you are new to strata, or we are new to you and your Corporation, Adelaide Strata & Community Management – or ASCM for short – is delighted to be your appointed strata management company.

As a member of the Corporation, you have various obligations under the Strata Titles and/or Community Titles Act. You are ultimately responsible legally for the overall good management of the Corporation.

To do all this takes time, skill and a clear understanding of complex strata law. That’s why most Corporations choose to engage the services of a professional to manage these duties on their behalf.

Professionals like ASCM.

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smartercommunities.com.au

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INTRODUCING ASCM Established in 1992, Adelaide Strata & Community Management (ASCM) has been managing Corporations just like yours throughout South Australia for over two decades.

We have proven, evolving experience with planning and delivering seamless management for Corporations of all sizes.

Our portfolio of clients ranges in size from small apartment and townhouse complexes to large residential communities, mixed-use high-rise buildings, commercial properties and hotels.

Large or small, the strata solutions we provide are specifically designed to meet the needs of your property.

Our teams work closely with your Management Committee and Corporation to provide impartial, helpful professional advice and services, while educating owners of their responsibilities.

An informed community is a productive community. ASCM handles the complexities of strata and community so you can relax and enjoy the benefits of strata living.

Local expert, National support ASCM is proudly part of Smarter Communities, one of the largest Community Management companies in Australia.

Nationally we manage over $30 billion of properties across New South Wales, Queensland, South Australia and Victoria.

Our brands include Adelaide Strata & Community Management (ASCM), Challenge Strata Management, Ernst Body Corporate Management (Ernst), Strata Title Management (STM) and Victoria Body Corporate Services (VBCS).

Together, we have one aligned vision – to deliver smart solutions to create a better lifestyle for people living and invested in communities.

AFTER-HOURS COMMON PROPERTY EMERGENCIES For after-hours common property emergencies, please call 08 8490 1300 and follow the prompts.

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WHAT IS A STRATA SCHEME?

WHAT IS COMMON PROPERTY?

A strata scheme is a building, or collection of buildings, where individuals each own their own portion of the scheme known as a ‘unit’ or ‘lot’, such as an apartment or townhouse, where there is also common property.

Common property is all the areas of land and building not included in any lot. This can include external walls, windows, roof, driveways, foyers, fences, gardens and facilities such as a pool or gymnasium.

Strata schemes vary in size, from two-lot duplex developments up to large 1,000+ lot residential developments. They can also be commercial, mixed-use, industrial, hotel and retirement village strata developments.

It is jointly owned by all owners and the Corporation is responsible for its management.

Within each strata scheme are individual lot owners, forming a self-governing community, and this community operates as a democracy.

The legal entity of all lot owners within a scheme is called the Corporation. The Corporation is legally responsible for the good management of the strata scheme.

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AS AN OWNER, YOU HAVE RESPONSIBILITIES. NOT ONLY DO YOU OWN YOUR OWN INDIVIDUAL LOT, BUT YOU SHARE OWNERSHIP AND RESPONSIBILITY OF COMMON PROPERTY WITH THE OTHER OWNERS AS WELL.

WHAT IS A CORPORATION? The Corporation is the legal entity comprised of all owners within a strata or community property.

When you purchase a unit (strata) or lot (community), you automatically become part of the Corporation.

responsibilities of common property with other owners in the scheme.

The Corporation should hold regular meetings to discuss the scheme’s management and decide on a course of action to manage tasks required.

The Corporation is legally responsible for the overall management, administration and maintenance of the strata or community scheme and the common property.

To enable quicker and more precise decision making in your Corporation, every year you can nominate yourself, or vote for candidates, to form the Management Committee at the Annual General Meeting (AGM), who will in turn represent all owners.

This includes financial management, arranging insurance, conforming to strata law and articles (the rules), record keeping, ongoing maintenance and managing repairs of common property.

It is in your best interest to attend these meetings, especially the AGM. You have a right to participate in the decision making of your scheme and influence how your community functions.

Responsibilities

As a lot owner, and part of the Corporation, you also share the ownership and

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MANAGEMENT COMMITTEE

WHAT ARE THE OFFICE BEARERS?

The administration and management of the Corporation may be performed on behalf of all owners by a Management Committee.

The Strata Titles Act and the Community Titles Act requires each Corporation to appoint owners to fulfil office bearer positions of Presiding Officer (Chairperson), Secretary and Treasurer at each Annual General Meeting.

The Management Committee is a group of owners elected at each AGM who can make many of the day-to-day decisions about running the scheme on behalf of the Corporation, within legal limits, including the control, maintenance and repair of common property.

There are no prescribed minimum or maximum members of a Committee, however, in a Corporation where all lots are residential lots, a Management Committee member must be a lot owner.

The Committee has the responsibility of enforcing the strata articles, or community by-laws (rules), the ability to make new ones, and must budget how much money is required to maintain your building now and into the future.

It is you, the owner, who votes for the Management Committee.

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Some of these positions can be held by the same person.

Office bearers, whilst having duties, do not have greater authority than any other individual owner, unless they constitute a committee with powers as provided by legislation, or as delegated by the owners at a general meeting.

OUR ROLE AS YOUR COMMUNITY MANAGER Each Corporation is legally required to manage and maintain shared property and services. By doing so comes the responsibility of ensuring the Corporation complies with strata law and regulations.

This takes time, skill and an understanding of the complex legislation. That’s why most Corporations choose to engage the services of a professional strata management company.

Just like ASCM. When contracted/appointed by the Corporation, ASCM is delegated the responsibility of managing the day-to-day affairs of the scheme on behalf of the owners and Committee.

Tasks will vary according to the management agreement, but broadly cover: -

conducting the Annual General Meeting

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financial management

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technical services

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administrative duties

There is so much more to managing your scheme, including tasks we perform behind the scenes, but you will experience the difference ASCM professional management makes.

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WHAT ARE LEVIES?

WHO SETS THE LEVIES?

As a lot owner you must financially contribute towards the running costs associated with your building and common property.

Ultimately, it is you, the owner.

These contributions are called levies and they are payable to your Corporation.

Levy notices are typically distributed to each owner four times a year to meet the financial obligations of the Corporation.

As part of ASCM’s management agreement we will issue levy notices to owners on behalf of the Corporation.

It is important to pay your levies on time, every time. It is your Corporation who receives these funds. Penalty fees are usually applicable for late payments.

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Levies, as part of the budget, are voted on and approved by the Corporation at the Annual General Meeting (AGM) each year.

Utilising its wealth of strata experience ASCM prepares detailed budgets for the Management Committee to present to owners at the AGM. These have been carefully forecasted to assist your Committee make better, more informed financial decisions to future-proof your scheme.

It is you, the owner, who votes on and approves the budgets at the AGM, therefore setting the levies amount to be paid for the year.

WHERE ARE LEVIES USED? Once levies have been collected from all owners, they are typically divided into two funds; an Administration Fund and a Sinking Fund.

The Administration Fund is used for regular payments including council expenses, insurance, management fees and payments to service contractors, cleaning, general maintenance and repairs, and utilities such as power and water.

The Sinking Fund is essentially a savings account for the Corporation for future major expenses as the building ages. This fund

covers non-recurring maintenance expenses such as painting, tiling, plumbing, carpet and plant and equipment, or the purchase of new Corporation assets.

This budget is based on a Sinking Fund Analysis, or a Statement of Expenditure, which is a compulsory legal requirement for Corporations larger than 6 lots.

Having a healthy Sinking Fund reduces the need to raise a ‘special levy’ to pay for unexpected costs. It makes good management and smart financial sense.

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WHAT ARE ARTICLES? BY-LAWS AND RULES An essential and unique part of living within a Corporation is the necessity to follow set rules to ensure all residents can enjoy their home and live safely and harmoniously together.

Articles are the rules and regulations adopted by the Corporation that all owners and occupiers living within a Corporation legally must follow.

Some strata articles (Schedule 3) are set out in legislation and can be found in the Strata Titles Act. By-laws are established to form the rules for a community and can be found in the Community Titles Act. Each Corporation can decide on and enforce its own set of rules to suit the way all owners want to live together. It’s important to understand your responsibilities and obligations, and to know which articles/rules apply to your scheme.

ASCM can advise your Corporation how rules can be changed, or new ones created, to meet the needs of all owners.

Common rules Pets, parking, noise, renovations, behaviour of residents, use of common property, and smoking are all common rules established to regulate behaviour in Corporations.

Rules can vary significantly from scheme to scheme. It’s important you know and understand your scheme’s rules and abide by these rules.

Corporations can include penalties for non-compliance and enforce these for any infringements.

Some rules, such as pets and renovations, may require permission from the Committee or the Corporation.

BEFORE you do anything, check the rules or by-laws first, follow procedure and seek permissions.

These rules are in place to protect all residents and to promote a harmonious environment and community.

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EXCLUSIVE SMARTER BENEFITS

ASCM BRINGING STRATA TO REAL LIFE

Negotiated exclusively for ASCM clients, these deals are available to you to help save valuable time and money:

Strata is made up of a truly diverse group of people who have varying levels of understanding.

Discounted contents or landlords insurance

A common misunderstanding from owners is their personal contents will be covered under the strata building’s insurance policy. They’re not.

Receive 3% discount on Contents insurance or 5% discount on Landlords insurance from leading strata insurer, CHU, when you use the unique web link smartercommunities.com. au/chu

Tax depreciation schedule discount

Making the most from your investment property makes good financial sense.

Property depreciation is often overlooked by investors, resulting in a loss of taxation benefits.

Enjoy a discounted rate for a comprehensive Tax Depreciation Schedule from Quantity Surveyors, Mitchell Brandtman, via the unique web link smartercommunities.com.au/mb

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We recognise this diversity and consequently provide informative content and videos to educate and inspire owners via our e-newsletter, bi-annual magazine and our blog.

To learn more visit us at ascm.com.au

Scan this QR code to watch our Strata FAQs videos

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This Guide to Strata Living is printed on Pacesetter Coated - made from elemental chlorine free bleached pulp sourced from wellmanaged forests and controlled sources. It is manufactured by an ISO 14001 certified mill.

1/102 Greenhill Road Unley SA 5061 t: 08 8490 1300 e: admin@ascm.com.au w: ascm.com.au

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