FAQs

In all Strata Schemes there are 2 main areas to consider. These being individual lots and common property.

Individual lots generally are referred to as the inside of a unit and anything on the exterior of this is referred to as common property.

Some examples of common property are:

• Pipes in the common property or servicing more than one lot
• Electrical wiring in the common property or servicing more than one lot
• Originally installed parquet floors, ceramic tiles, floor boards, vermiculate ceilings, plaster ceilings and cornices
• Most balcony doors are usually common property if the strata plan was registered after 1974
• The slab dividing two storeys of the same lot or one storey from an open space roof area or garden areas of a lot (eg. a townhouse or villa), is usually common property if the strata plan was registered after 1 July 1974, unless the registered strata plan says it is not

By-Laws are a set of rules implemented by the Owners Corporation and are essential for the smooth running of the Scheme. Without the implementation of By-Laws the scheme would essentially become a “free-for-all” unrestricted situation where anyone could essentially do as they please to their individual lot and the common area.

Here are some examples of where By-Laws are commonly implemented for:

• Parking restrictions and use of allocated areas
• Keeping of pets
• Garbage disposal
• Use of facilities and common property
• Ownership and Maintenance responsibilities of some common property
• Behaviour of residents – noise, hanging of washing, offensive behaviour, etc
• Security and Safety measures
• Architectural and landscaping guidelines
• Other appropriate matters specific to the type of strata scheme in use
• Installation of Floor coverings
• Installation and use of Air conditioners, pergolas, tv & satellite access

Lot owners of a Strata Scheme form an entity to become what is known as the Owners Corporation. The Owners Corporation is responsible for running and maintaining the Strata Scheme. As per the NSW Strata Schemes Management Act 2015: Section 9, the Owners Corporation is responsible to administer, control, maintain, repair and manage all areas of the common property for the scheme, to manage the finances, to keep and maintain the accounts and records, to comply with all legislation and to handle the insurances for the scheme. If a Strata Managing Agent (or Strata Manager) is appointed to mange the scheme then the Owners Corporation can delegate many of its duties to the Strata Manager.

Some of the areas the Owners Corporation can delegate duties to the Strata Manager include but are not limited to:

• Strata roll
• Financial records, accounts and statements
• Keeping of all other records and correspondence
• Fire safety compliance
• Work Health & Safety (WHS) compliance
• Other legislative interpretation and compliance
• Approvals of renovations by lot owners
• Repairs, renewal and maintenance of common property
• Payment of suppliers
• Disputes between owners (i.e. scheme ‘harmony’ and ‘by-law’ issues)
• Strata committee elections and meetings
• General meetings
• Insurances
• Section 182 strata searches
• Section 184 strata information certificates
• Levies and budgets
• Capital works fund and administrative fund management
• Levy collection of both paid and unpaid levies
• By-laws

Levies are funds that the owners of a Strata Scheme are paying quarterly in order to fund the maintenance of the scheme, whether it be for trades contracts, insurance and any other expenses the scheme will require for keep it healthy and running smoothly. These levies are proposed at the First Annual General Meeting and approved by the Owners Corporation. There are 3 types of levies and these are the Admin Fund, Capital Works Fund (formerly known as the Sinking Fund) and Special Levies.

The Admin Fund refers to the day-to-day and regular (non-capital) operating expenses of a Strata Scheme such as:

• Cleaning
• Gardening
• Insurance premiums and excesses
• Utility bills – such as water usage, electricity, etc
• Small ‘day-to-day’ repairs – such as a broken mailbox, a damaged or burnt out light, etc
• Owners Corporation and Strata Committee running expenses
• Strata management fees (if a Strata Manager is appointed)
• Auditing and tax return fees
• Bank charges

The Capital Works Fund is essentially a large capital expenditure fund that pays for both expected and unexpected replacement and repairs. Some items such as common property painting is easy to budget, however, things such as concrete cancer or structural damage due to subsidence or accident are difficult to predict and budget and it is strongly advised that a healthy capital works fund is implemented to ensure any unexpected emergencies that may arise are accounted for.

Special Levies are levies are generally raised when there aren’t enough funds in either the Admin or Capital Works for an essential expense. There are other circumstances where a special levy is struck but not due to not having enough funds, but also for items that are not provisioned for. These levies require a General Meeting to be held and also requires 50% majority votes in favour to be struck.

A Strata Committee (formerly known as the executive committee) are the members elected at the First Annual General meeting and every General Meeting that follows who will represent the Owners Corporation for matters relating to the scheme. The Strata Committee will take on the daily duties of running and managing the scheme and generally this will be assisted by a Strata Managing Agent who the Strata Committee will be delegating duties to.

There is a minimum of 1 member and a maximum of 9 members that can form the Strata Committee.

NOTE: For larger schemes of 100 lots or more require a minimum of 3 members.

With all new Strata Schemes a First Annual General Meeting is held to discuss important and mandatory motions that will decide how the scheme will be run. Such items discussed include the insurance, financials/budget, By-Laws, Strata Committee election.

Although it is not mandatory to attend any meetings, it is strongly advised to as this will be an opportunity to not only be a part of the scheme from the very beginning but also to here the different opinions and put in your own opinions on how the scheme should be set.

When an owner decides to make changes to their individual lot they must consider 3 different areas of works that they wish to have conducted. These are cosmetic works, minor renovations and major renovations.
Owners can conduct cosmetic works without consent such as:

• Installing or replacing hooks, nails or screws for hanging paintings or other things on walls
• Installing or replacing handrails within your lot
• Interior painting
• Filling minor holes and cracks in internal walls

Owners can conduct minor renovations provided they have approval from the Owners Corporation by general resolution being over 50% of votes in favour. These include:

• Renovating a kitchen
• Changing recessed light fittings
• Installing or replacing wood or other hard floors
• Changing internal walls
• Sustainability measures (such as a clothesline or reverse cycle air conditioner). However, these cannot involve changing the outside appearance of a lot or structural changes

Owners can only conduct major renovations provided they the following steps and procedures in place:

1. A special resolution (being 75% approval of votes from the Owners Corporation)
2. A minimum 14 days’ notice has been given to the Owners Corporation before having works conducted