A Basic Understanding Of Strata Levies

By Author: Christopher Whelan
Total Articles: 74
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Funds required covering all the expenses and needs of strata scheme is called levies usually collected quarterly. The fund deposited into the strata scheme’s trust account to be used in maintenance. Without levies strata scheme won’t be able to pay those running expenses. Each year, Owner Corporation must evaluate the amount need to pay by owners in annual general meeting. The strata schemes account is split into various funds such as:

Administrative Fund Levies

Administrative fund levies is used for day-to-day running expenses .The amount in it must be sufficient for the owners corporation to pay its expenditure cost of cleaning, gardening, premium of insurance, electricity bills ,water usage ,small repairs ,strata management fees, tax return fees bank charges etc.

Sinking Fund Levies

Sinking fund levies is used for long term future expenditure such as painting of common property, obtaining personal property, for renewing or replacing any fixtures on the common property and any personal property owned by the owners corporation, replacement and maintenance and other capital expenses. According ...
... to current law all schemes need to have a ten year sinking fund plan for the life of the scheme.

Special Levies

Eventually the time would come when something need to be replaced or fixed urgently but there are no funds in the sinking fund to do the job. Owner Corporation has to raise a special levy and amount collected paid to fund to carry out those extra expenses. An owner corporation is allowed to transfer money from one fund to another fund but the association must make a levy to refund the amount within three months. For example if owner corporation is paying an administrative expense from sinking fund then the paid amount need to be refunded with 3 months by way of a special levy.

Determining Levies

When a levy is decided at annual general meeting, a financial budget must be given presenting current financial situation with estimated receipts and payments. Then all owners can either accept or reject the budget .The Owners Corporation must determine what both the administrative and sinking fund levies will be for the scheme on an annual basis. Every Owner has to pay a set of levy amount based on the unit entitlement of lot .If the unit entitlement of a lot is larger, then owner has to pay greater levy amount for that .Levies are usually payable quarterly a levy notice is issued by the treasurer of the Owners Corporation or by the Strata Manager if any. Some owner corporation may allow owners to pay levies by installments.

Interest and Discount on Levies

Interest and discounts on levies an unpaid levy gains interest at the rate of 10% simple interest a year if not paid within one month after it is due. The association cannot increase or decrease the interest, but it can make a special resolution to charge no interest. Unpaid levies, including interest, can be recovered by the association as a debt in court. An association may make a special resolution to give a 10% discount where a levy is paid before the day it is due.

How to Pay a Levy

You can pay your levies online or via Cheque also you can pay it by telephone through DEFT payment system. You need to be already pre-registered with the DEFT system. Just have your credit card and levy notice ready with you and make a call.

Christopher Whelan is a Licensed Strata manager at Whelan Property Group Pvt. Ltd. focused on providing prompt and proactive professional Strata management throughout Sydney.