Even though it is not legally required, many Owners Corporations will hire a licensed Body Corporate or Strata Management agency. The Owners Corporations are allowed to manage and handle all their affairs, but in many cases, the owners don’t have the necessary expertise, the will or time to take these responsibilities on.
Funding The Strata Plan
It all begins with “financial” funds. Any Owners Corporation needs to have enough available funds to pay for the day-to-day operation and management of a building. This includes tasks such as the upkeep of gardens and emptying of bins. This plan should also have enough funds available for ongoing repairs and building maintenance. Each owner holds the responsibility of ensuring the building is well maintained and kept to ensure the value appreciates instead of the other way around.
In the majority of cases, every owner will pay for Strata Levies, which is usually a quarterly contribution into the Owners’ Corporation. The amount is generally agreed on every year at the Annual General Meeting. The levy usually is made up of 2 components, and in some cases, a 3rd levy will be added. This includes:
- Admin Fund contribution, or Administration Fund
- Sinking Fund Contribution
- Special Levies
The Role Of A Strata Title Management Agency
The Strata Title managers will charge a fee that covers the body corporate administration and management. This fee will cover the following body corporate services:
- Provide notice to all the owners and hold the AGMs (annual general meeting)
- Prepare the budget that will be considered at each AGM
- Source insurance quotations on behalf of the Body Corporate
- Prepare and then distribute minutes taken at each AGM
- The levies are then calculated, invoiced, followed by collected from each of the owners
- The Strata managers will maintain an up-to-date register of the mortgagees and owners
- Any changes of contact details of the owners will be recorded
- Attend to correspondence and inquiries
- Monitor the cash flow
- Financial Management
- Make the payments to any creditors
- Make sure that funds are maintained in a Trust Account
- The preparation of financial reports annually
- Advisee the committee of owners about any maintenance issues
- Quotations will be sourced by the Strata Management agency for any minor maintenance required
- Manage contracts with third parties that are employed by the Body Corporate for fire-protection services, lift inspections and other requirements that are linked to safety
- Supervise contracts with building managers that are employed by the Body Corporate
Strata managers are also called upon in some cases to manage lifestyle concerns associated with the residents. This involves a variety of tasks that usually include:
- Enforcing rules associated with the common property that is then communicated to each resident what these rules are.
- Mediating any disputes that arise between owners.
- Amend the by-laws when it becomes necessary which benefits the Owner’s Corporation.
- Organize social occasions, information events, along with listening to feedback from the residents about what their opinions are about making improvements to the property.