Guide to Strata Living | STM 2019

STRATATITLE.COM.AU

Guide to Strata Living

Strata Title Management (STM) ABN 43 119 665 762 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 Strata Title Management, September 2019. Reproduction or reuse of this material is forbidden without written permission.

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HELLO AND WELCOME TO THE STM COMMUNITY Whether you are new to strata, or we are new to you and your strata community, STM is delighted to be your appointed strata management company to assist your Owners Corporation.

As a member of the Owners Corporation, you have various obligations under the Strata Schemes Management Act. You are ultimately responsible legally for the overall good management of the strata scheme.

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

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INTRODUCING STM Established in 1978, Strata Title Management, or STM as we like to call ourselves, has been managing Owners Corporations just like yours throughout New South Wales and Queensland for over 40 years.

We have proven, evolving experience with planning and delivering seamless management for strata schemes 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 Strata Committee and Owners Corporation to provide impartial, helpful professional advice and services, while educating owners of their responsibilities.

Local Expert, National Support STM 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.

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

smartercommunities.com.au

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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 ‘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, 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 Owners 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 Owners Corporation. The Owners 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 AN OWNERS CORPORATION? Owners Corporation is the name given to represent all lot owners within a strata scheme.

When you purchase an apartment, or lot, you automatically become part of the Owners Corporation for your building.

Responsibilities The Owners Corporation is responsible for the overall management of the strata scheme. This includes financial management, arranging insurance, conforming to strata law and by-laws, record keeping, ongoing maintenance and managing repairs of common property.

As a lot owner, and part of the Owners Corporation, you also share the ownership and responsibilities of common property with other owners in the scheme.

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

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

It is in your best interest to attend these meetings, especially the Annual General Meeting (AGM).

You have a right to participate in the decision making of your scheme and influence how your community functions.

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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 strata scheme.

Utilising its wealth of strata experience STM prepares detailed budgets for the 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.

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

As part of STM’s management contract, we will issue levy notices to owners on behalf of the Owners Corporation.

It is important to pay your levies on time, every time. Penalty fees can be applicable for late payments. It is your scheme who receives these funds.

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

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 Capital Works fund.

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

The Capital Works fund is essentially a savings account for future major expenses as the building ages. This includes painting, tiling, plumbing, carpet and plant and equipment, or the purchase of new Owners Corporation assets.

It is a compulsory requirement of state legislation to prepare a Capital Works fund budget forecast. Having a healthy Capital Works 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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OUR ROLE AS YOUR COMMUNITY MANAGER

THE ROLE OF A BUILDING MANAGER

Every Owners Corporation is legally required to manage and maintain shared property and services. This includes ensuring the strata scheme is compliant with strata law and regulations.

Some Owners Corporations choose to engage the services of a Building Manager to oversee the onsite maintenance of the building. They often live or have an office onsite.

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

Like STM. When contracted to a strata scheme by the Owners Corporation, STM is delegated the responsibility of managing the day-today affairs of the scheme on behalf of the 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

The Building Manager is responsible for maintaining the building, common property and shared services such as heating, air conditioning, ventilation, waste disposal, lifts, garages and utilities.

The Building Manager also oversees or undertakes onsite works and arranges for any permissions or access requirements for contractors.

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

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WHAT IS A STRATA COMMITTEE

WHAT ARE BY-LAWS?

The administration and management of the strata scheme may be performed on behalf of all lot owners by a Strata Committee.

An essential and unique part of living in strata is the necessity to follow set rules to ensure all residents can enjoy their home and live safely and harmoniously together.

The Strata Committee is a group of owners elected at each Annual General Meeting who can make many of the day-to-day decisions about running the scheme on behalf of the Owners Corporation including the control, maintenance and repair of common property.

The Committee has the responsibility of enforcing 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.

Election of the Strata Committee The Strata Committee can have up to nine members. You can be elected to the Committee if you are: • an owner; • a company nominee of a corporation that is an owner; or • a person who is not an owner but who is nominated by an owner in accordance with the requirements outlined in the legislation.

A Strata Committee meeting is held straight after the Annual General Meeting to decide who is to hold the office bearer positions of Chair (Chairperson), Secretary, Treasurer and Ordinary Committee Members.

Remember, it is you, the owner, who votes for the Strata Committee.

By-laws are the registered rules and regulations adopted by the Owners Corporation that all owners and occupiers living within a strata scheme legally must follow.

Some by-laws are set out in legislation, other by-laws are adopted by the Owners Corporation.

Each strata scheme can decide and enforce its own by-laws to suit the way its owners want to live. It’s important to understand your responsibilities and obligations.

STM can advise your Owners Corporation how by-laws can be changed, or new ones created, to meet the needs of all owners.

Common by-laws Pets, parking, noise, renovations, behaviour of residents, use of common property, and smoking are all common by-laws found in strata schemes.

By-laws can vary significantly from scheme to scheme. It’s important you know and understand which by-laws apply to your scheme and you must abide by these by-laws.

Some by-laws, such as pets and renovations, may require permission from the Strata Committee or Owners Corporation.

BEFORE you do anything, check the by-laws, 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

STM BRINGING STRATA TO REAL LIFE

Negotiated exclusively for STM 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

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.

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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To learn more visit us at stratatitle.com.au

Scan this QR code to watch our Strata FAQs videos

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