Understanding Strata Levies: What Are They and Why Do They Matter?
If you own or are thinking of buying a strata-titled property in New South Wales, you’ve likely heard about strata levies. These are an essential part of strata living, but what exactly are they, and how do they affect you as an owner?
What Are Strata Levies?
Strata levies are regular fees paid by the owners of strata-titled properties, such as apartments, townhouses, or units, to cover the costs associated with maintaining and managing the common property of the building or complex. These levies are usually paid quarterly, although the frequency can vary depending on the strata scheme.
The amount you pay in strata levies is determined by the owners’ corporation (the owners corporation is all the owners as a collective and is also known as the body corporate) at each Annual General Meeting and is based on the needs of the property.. This can include everything from routine maintenance of common areas, like gardens, lifts, and swimming pools, to more significant expenses such as building insurance, major repairs, and upgrades.
Types of Strata Levies
There are generally three types of strata levies:
Administrative Fund Levies: These cover the day-to-day expenses of running the strata scheme. This includes cleaning, gardening, minor repairs, and insurance premiums.
Capital Works Fund Levies (formerly known as Sinking Fund Levies): These are set aside for long-term maintenance and significant capital works, such as repainting the building, replacing the roof, or upgrading shared facilities.
Special Levies: These are occasional levies raised to cover unexpected or extraordinary expenses that the regular levies don’t cover. This might occur if there’s a sudden need for major repairs or if a significant upgrade is required.
Why Are Strata Levies Important?
Strata levies are crucial for maintaining the overall quality and value of the property. By contributing to these levies, you’re ensuring that the common areas remain in good condition, which, in turn, helps to preserve or even increase the value of your individual unit. Properly maintained common areas also contribute to a better living environment for all residents.
However, it’s essential to be aware that levies can vary significantly depending on the property’s size, age, and amenities. For example, a building with extensive facilities like a gym, pool, and concierge service will likely have higher levies than one with fewer amenities.
The Role of a Strata Management Company
Managing strata levies can be a complex and time-consuming task, particularly when it comes to budgeting, ensuring compliance with legal requirements, and collecting payments from all owners. This is where a strata management company can be invaluable.
A professional strata management company can help set realistic budgets, manage the collection and allocation of levies, and ensure that funds are used efficiently and transparently. They also work closely with the owners’ corporation to plan for future capital works, helping to avoid the need for unexpected special levies. By hiring a strata management company, you can ensure that your strata scheme is financially healthy, well-maintained, and compliant with all relevant regulations.
Need Help Managing Your Strata Levies?
At QT Strata, we understand the complexities of managing strata levies and the importance of keeping your property in excellent condition. Our expert strata management services ensure that your levies are properly managed, funds are allocated efficiently, and your investment is protected.
Contact us today to learn how we can assist with the management of your strata property.