If you’ve ever purchased a strata-titled apartment or property before, you are probably aware of strata levies. For those who are new to strata schemes, the question remains as to what strata levies are and what do they contribute to? But to get a better understanding of strata levies, let’s begin with explaining what a strata scheme is.
What are strata schemes?
A strata scheme is a building or buildings where individual owners own a portion of a ‘lot’. When buying into a strata scheme, you automatically become part of the owner’s corporation. The owner’s corporation shares ownership and responsibility for all ‘common property’ such as pools, gardens, parking lots, driveways, stairs, laundries and so on.
What are strata levies?
All owners corporation’s impose a regular strata levy (body corporate fees) on all lot owners. This financial commitment and contribution is used to cover the running and maintenance of the strata property, and is divided into three main types of contribution:
- The Administrative Fund: covering the daily administration of the scheme – i.e. cleaning, gardening, strata management, insurance, and accounting.
- Sinking Fund Levies: covering larger, long-term projects – i.e. painting, plumbing, repairs and building upgrades.
- Special Levies: required when there is insufficient money raised via Administrative and Sinking Fund to cover sudden expenses. In some situations, these expenses can be delayed until funds are raised via normal levy payments. But if there are OHS implications of not fixing something, a special levy is mandatory to fix the problem.