Guide to Strata Living | VBCS 2019

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Guide to Strata Living

Victoria Body Corporate Services (VBCS) ABN 85 007 034 522 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 Victoria Body Corporate Services, July 2019. Reproduction or reuse of this material is forbidden without written permission.

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HELLO AND WELCOME TO THE VBCS COMMUNITY Whether you are new to strata, or we are new to you and your strata community, VBCS 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 Owners Corporation 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 Owners Corporations choose to engage the services of a professional to manage these duties on their behalf. Professionals like VBCS.

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INTRODUCING VBCS Established in 1982, Victoria Body Corporate Services, or VBCS as we like to call ourselves, has been managing Owners Corporations just like yours throughout Victoria for over three decades.

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 Committee and Owners Corporation to provide impartial, helpful professional advice and services, while educating owners of their responsibilities.

Local Expert, National Support VBCS 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. VBCS 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, 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 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? The Owners Corporation is responsible for the overall management of the strata scheme. This includes financial management, arranging insurance, conforming to strata law and additional rules, 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 Committee at the Annual General Meeting (AGM), who will in turn represent all owners.

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

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WHAT IS A COMMITTEE? The administration and management of the strata scheme may be performed on behalf of all lot owners by a Committee.

The Committee is a group of owners elected at each Annual General Meeting (AGM) 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.

An Owners Corporation of 13 lots or more must elect a Committee at every AGM. Owners Corporations with less than 13 lots may elect a Committee if they choose to do so, but it is not mandatory.

If your Owners Corporation does not have a Committee, the lot owners must elect a chairperson of the Owners Corporation.

The Committee has the responsibility of enforcing the additional rules, the ability to make new ones, and must budget how much money is required to maintain your building now and into the future.

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Election of the Committee The Committee must have a minimum of three and maximum of 12 members. You can nominate for the Committee if you are a lot owner or hold a proxy for a lot owner with the owner’s consent.

Once elected, a committee holds office until a new committee is elected, usually at the next AGM. Committee members elect the office bearer positions of Chair (Chairperson) and Secretary who then fill the positions of Chair and Secretary of the Owners Corporation.

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

WHAT ARE ADDITIONAL RULES? 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.

Some rules are set out in legislation with the Model Rules set out in the Owners Corporations Regulations 2007.

An Owners Corporation may adopt rules, either replacing or in addition to the Model Rules. The rules made usually address particular matters relevant to the Owners Corporation to assist in harmonious living.

Each individual strata scheme can decide on and enforce its own set of rules to suit the way its owners want to live together. It’s important to understand your responsibilities and obligations.

Common rules Pets, parking, noise, renovations, behaviour of residents, use of common property, and smoking are common areas for rules to be made in strata schemes.

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

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

BEFORE you do anything, check the rules first, follow procedure and seek permissions.

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

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

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WHAT ARE LEVIES?

WHERE ARE LEVIES USED?

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

Once levies have been collected from all owners, they are typically divided into two funds; an Administration fund and a Maintenance fund (if applicable).

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.

These contributions are called levies and they are payable to your strata scheme.

Levy notices are commonly distributed to each owner four times a year to meet the financial obligations of the Owners Corporation. Some Owners Corporations have half yearly or yearly levies. Payment options are detailed on the levy notice.

As part of VBCS’s management agreement we will send levy notices to owners on behalf of the Owners Corporation.

It is important to pay your levies on time, every time. Penalty interest is usually applied to late payments. It is your scheme who receives these funds.

The Maintenance fund is not obligatory for all Owners Corporations. Prescribed Owners Corporations (more than 100 lots or budget of $200,000) must arrange a Maintenance Plan to be prepared.

If the plan is approved, a Maintenance Fund designed to meet the identified expenses is required. It is essentially a separate savings account for the Owners Corporation intended to meet future non-recurring maintenance expenses and capital items identified in the Maintenance Plan.

By having a Maintenance Plan, or some form of capital works fund, an Owners Corporation may be able to spread the cost of capital works over time, avoiding the need for special levies at the time of undertaking the works. 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.

Larger Owners Corporations often choose to engage the services of a Building Manager to oversee the onsite maintenance of the building. They typically 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 VBCS.

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.

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

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

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

Think of it like this: Strata Community Managers look after the business side of strata, while Building Managers look after the building. We all work together to ensure your building is well maintained and cared for.

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

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EXCLUSIVE SMARTER BENEFITS Negotiated exclusively for VBCS clients, these deals are available to you to help save valuable time and money:

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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