These answers have been written in plain English and should not be relied on in legal matters.
WHAT DO THESE TERMS MEAN?
By-laws are the rules which govern a Strata Scheme and are enforceable by law. These laws include the use of common property, behaviour of residents such as noise, smoking, hanging of washing etc. They may also include security and safety measures, pet keeping and the installation and use of floor coverings.
Strata Scheme is a building or collection of buildings in which individuals own a portion (lot). A scheme also includes common property which each owner has ownership and is shared with the other unit owners or their tenants.
The Owners Corporation is the group of owners in the Strata Scheme.
The Strata Committee is the group of owners within the Owners Corporation who are elected at each Annual General Meeting, to oversee the running of the Strata Scheme. Up to 9 members can be elected for the Strata Committee. From the elected members, three office bearers must be chosen for the duties of chairperson, treasurer and secretary. Learn more
FINANCIAL RUNNING OF STRATA SCHEME
The Strata Scheme Management Act 2015 states that two funds are required by an Owners Corporation. An Administration Fund and a Capital Works Fund. An Annual General Meeting of all owners determines the amount of money raised by each fund to finance the expenses of the Strata Scheme.
An Administration Fund is set up by the Owners Corporation of the Strata Scheme to cover the day to day expenses of the property, for eg. electricity, gardening, cleaning costs in relation to common areas; insurance premiums, strata management company service fees, elevator scheduled maintenance etc.
A capital works fund is set up by the owners corporation of the strata scheme to cover future capital costs in relation to common property, for eg. repairs, maintenance and replacement of carpets, guttering, painting etc. All strata schemes are required by law to establish a 10 year capital works fund plan. This means a 10 year plan must be determined to repair and maintain the common areas of the property and to raise the funds to cover the costs. The amount required for this plan may vary between strata schemes. The capital works fund plan is required to be updated at least every 5 years.
A Strata Levy is a charge issued by the Owners Corporation to raise funds to cover both the Administration and Capital Works Funds for a Strata Scheme. This levy is generally paid quarterly and is the amount determined by the number of lots the owner has acquired. The unit number and the lot number may be the same in smaller Strata Schemes. Garages or car areas may also have a different lot number. Learn more
A Special Levy is a charge issued by the Owners Corporation to raise funds to cover expenses which the Administration or Sinking funds are unable to cover. Under the new strata laws, a special levy can now be raised to either the admin or capital works fund.
Lot is the term used by law in the Strata Schemes Management Act and outlined on the Strata Plan, denoting the area a person owns. Strata records are kept in lot numbers not unit numbers. The unit number and the lot number may be the same. In some Strata Schemes, garages or car areas may have a different lot number. A Strata unit is the internal space of your flat or unit from the inner boundary walls and ceilings. Learn more