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 …

Put down that Wine Glass … we need to review South Australia Strata Laws

I’m a big fan of South Australia as it has so much going for it .. hot dry weather (I hate humidity), no bad traffic (which is good for cycling), great food and wine and nice people (self explanatory).

But we can’t just lounge about enjoying their fine riesling and shiraz without doing some work from time to time … and now that work is to make sure the changes to South Australian strata laws get done properly.

The changes have been announced by SA Attorney General, John Rau, who said that draft legislation which will be introduced to SA State Parliament next year and that public comment is being sought on the changes.

He also said that the changes would include –

• restrictions on who could be a strata manager
• giving owners the right to terminate manager contracts at any time
• compulsory professional indemnity insurance for strata managers
• rights to revoke proxies at any time
• limiting proxy life to 12 months
• better disclosures of conflicts of interest
• provisions for co-insurance of some or all of the buildings in a community scheme

So, let’s watch out for the draft legislation and make some (helpful) comments.

And, see you at an SA winery with a copy of the Strata Titles Act 1988 (SA) getting up to speed.

Francesco …