Levy contributions are set to cover the anticipated costs of running your strata company for the coming year.
All schemes are unique, so it is impossible to compare two different properties.
Why is strata so expensive?
Check the Notice and Agenda for the most recent AGM. This will contain important information such as the statement of accounts (previous expenses) and the proposed budget (projected expenses).
Consider the balance of the strata company bank account. The levies you pay fund the proportion of your ownership in the common property and cover the expenses incurred to run the scheme – building insurance, gardening/cleaning, general maintenance, utilities, strata management fees and any other planned projects.
Good financial practice ensures that the strata company does not run on a deficit. Some schemes may have surplus funds to contribute to the budget, and others prefer to have a surplus as a ‘buffer’ for unforeseen expenditure or repair. Once a budget is set, the strata company must raise levy contributions to cover the budget.
What is a Reserve Fund?
Think of this as a slow savings account that builds up over time to pay for large scale works or capital expenses (e.g. new gutters & downpipes, driveway resurfacing, exterior painting etc).
Reserve Funds are a legislative requirement for some ‘designated’ schemes (refer to Strata Titles Act), however other schemes voluntarily choose to implement a Reserve Fund to ensure they are in a good financial position at all times. The contributions towards the Reserve Fund may also reflect your 10-year maintenance Plan.
How can I get involved?
Strata Council members are elected at each AGM and play an important voluntary role in the strata scheme. They generally review all the costs and expenses and propose to the owners how much the levies should be.
Ultimately it is the owners at the meeting who vote and decide on how much the levies will be. Please get in touch with our office should you have any ideas on reducing your scheme expenses or expressing your interest in nominating to the Strata Council if you would like to contribute.
If you need a copy of your AGM documents, these can be found on the owner's portal.