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 …