Strata Levies Need to be Paid

Since almost all strata corporations rely entirely on strata levies paid by owners, making sure everyone knows what levies are, what they’re for and when they need to be paid is vitally important.

And, there’s a lot of information around about strata levies.

But, it’s very detailed, complicated and hard to understand.  So, the message is not getting through.  What’s needed are more simple explanations like those listed below.

• Virtually every strata corporation raises money each year according to 2 budgets.  An administration or operating budget that covers all day-to-day and recurring expenses and a reserve or capital budget for major works, long term projects and capital replacements.
• Administration or operating money is generally spent completely within each 12 month period so nothing is left at the end.
• Reserve or capital is accumulated each year and spent every few years when major works are needed.  Sometimes it’s used to cover short term cashflow shortages in the administration or operating budgets.
• Strata levies are usually payable monthly or quarterly.
• If strata corporations don’t get all the levies when they’re due then it must delay works and other things, pay suppliers late or use reserve or capital money in the meantime.  And if the arrears continue for more than a year, then the strata corporation will need to cover the shortfall in the next years budgets.
• Every strata owner must pay strata levies (there are no exceptions) and their share is set by a fixed formula in the strata corporation documents.
• If strata owners don’t pay levies on time they typically lose their right to vote at meetings, to nominate for things and to exercise other rights with the strata corporation.
• When levies are more than 1 month overdue strata owners can be sued for the levies, interest on the levies from when they were due and (in most places) all the recovery costs paid by the strata corporation.
• Plus, when there’s overdue levies more work, tension and conflicts arise in the strata corporation than is usual or necessary. 

So, for all these reasons, strata levies need to be paid.

Francesco …

US Law Firm Develops Strata Building

Sometimes strata law firms set great examples for everyone else.

It happens when they back themselves with investments in people, innovation, education, buildings and other resources.

And, the latest law firm to do that is Katzman Garfinkel & Berger with the opening of thier Law & Learning Center in Margate, South Florida.

It’s a 6-acre campus with a new 33,000 square foot facility that includes parking for more than 360 vehicles, a lake, and walking paths.  It houses the firm’s 100-plus attorneys and staff, will become a premier venue for South Florida community association education and outreach, hosts the firm’s Board Member Boot Camp® training seminars, continuing education for managers, Community Forums with legislators and the regular meetings of the Community Advocacy Network's 12-member Advisory Council.



There’s a preview on Flickr.

Katzman Garfinkel & Berger is a specialist in condominium and community association law.

It’s an impressive facility and credit to the law firm.  So, well done strata lawyers (again)!

Francesco …

Getting Better Services & Products in Strata

One of the longer running debates in strata management and operations has been about how specialist businesses serving strata schemes and owners can get recognised and preferentially selected by strata schemes over those who provide similar services generally.

In some cases that is legislatively or practically achieved or advantaged.  For instance strata managers need to have special qualifications and/or come from a limited group so strata schemes must choose from amongst that group and they are all (at least) focused on strata scheme needs.  But, even then general real estate agents and in some cases accountants also undertake strata management.

In other cases the product or service only exists for strata schemes and therefore only some business can (and do) supply them.  For instance, strata insurance must comply with the legal requirements and only some insurers offer it.  So strata schemes don’t generally look elsewhere for strata insurance.  The same applies for things like strata searching, strata certification, etc.

But in most cases the product or service exists generally and there are many possible suppliers (some of which specialise in strata and others who do not) … so strata schemes could choose either.  For instance, plumbers, electricians, cleaners, gardeners, lawyers, accountants, bankers, engineers, etc, etc. 

It’s in those situations that those of us who have focused and specialised on supplying strata schemes face the biggest challenges.

It is obvious that strata schemes have features that make working for them, supplying services or products to them and making sure they comply with operational requirements more difficult; involve knowing more than usual, tailoring products or services to their needs and understanding the differences. 

But this takes extra effort, time and cost.  And, strata schemes should also experience better outcomes and value for money from these businesses.

In comparison businesses simply supplying the same product or service that they supply to free standing property owners can do so more cheaply.  But it’s likely that the service or product may not be ideal (or in the worst cases totally unsuitable).

It’s a dilemma all round.  For businesses wanting their extra efforts and investments to get recognised and for strata schemes trying to find the best suppliers at the best prices.

So, what can (and should) be done ?  


I suggest some of the following.

1.    Businesses should explain their focus on strata, how they do that and the advantages of using them.  This happens to a limited degree.

2.    Strata schemes should find out about supplier experience working in strata and consider that (amongst other factors like price) when choosing.  This also happens but less often that is ideal.

3.    Industry associations should encourage specialist businesses to join and/or participate to help identify them.  There are some (limited) opportunities to do this but it is not widespread and not largely encouraged by industry associations.

4.    Strata schemes (and managers) should recognise businesses that actively participate in industry associations.  Sometimes this happens and sometimes it doesn’t.  Sadly, often price is seen as more important.

5.    Everyone should try to identify what differentiates services and products for strata schemes (from general supply) and include those matters in selection processes.  This rarely happens (except where some businesses do so as a marketing strategy).

6.     An accreditation, endorsement and/or rating system should be developed to compare businesses so that strata consumers can find out more and make better assessments.  There is no such system available in Australia.

7.     A longer term view should be taken by everyone about the running of strata schemes (after all they will be around for a long time) which mitigates to more specialised and focused business suppliers than cheaper alternatives.  This applies to owners, committee members, managers, associations and businesses. 

Sounds good … doesn’t it ?  Like strata supplier heaven ….

Francesco …