FAQ and Glossary
What information is required to order a strata report?
The following information is required:
- The Strata Plan number or company name
- Full property address
- The Lot number
- The name/s of the current owner/s or shareholder/s
- The name of the Strata
- Management company or person (in cases where a building may be internally managed)
- A Letter of Authority if required
How do I know if a letter of Authority is needed?
Use the alphabetical list of strata managers, on the home page, to determine if and what type of authority is required. For Self managed buildings it is advisable to obtain an authority to inspect, preferable from the current owner of the unit.
What is a Sec. 184 Certificate?
The Section 184 Certificate under the strata legislation, previously known as Sec 109 Certificate, is obtainable from the Owners Corporation or the Strata Manager. After an exchange of Contracts, the vendor is obliged to provide the purchaser with this certificate which will state:
- The Strata scheme’s insurance cover
- Names of the Committee members, Office Bearers and
- Strata Managers
- Levies payable by the lot
- Any existing arrears in the levies
- Any specific By-laws drafted and implemented by the Owners
- Corporation over the last 2 years
What is a strata scheme?
A building or collection of buildings where each individually owned property is called a ‘lot’ (such as an apartment or townhouse) and the ‘common properties’ which include the shares ownership and responsibility owners have over properties (such as foyers or driveways). (Information taken from NSW Strata Living)
What is common property and why is it important?
What is the Owners Corporation and what are their responsibilities?
The Owners Corporation is made up of the lot owners in a strata scheme that hold regular meeting to discuss and decide on issues affecting the strata scheme. The Owners Corporation are responsible for financial management, insurance, record keeping, repairs and maintenance of common property, by-laws, employing a strata manager and keeping up to date with all relevant laws. (Information taken from NSW Strata Living)
Can the Owners Corporation delegate responsibilities to a strata managing agent?
What is the strata committee and what do they do?
Who is and is not eligible for the strata committee?
Individual owners may nominate themselves or another eligible person. People eligible include: an individual who is the sole owner of a lot in a strata scheme, only one co-owner of a lot unless they own more than one lot, a company nominee of a corporation that is the sole owner of a lot and a non-owner, if nominated by an eligible owner who is not on the committee.
How are strata committee meetings conducted and how often?
How does strata committee voting and decision making work?
Can i renovate inside my apartment?
As individual lots also have areas within them that are common property, owners wanting to make changes or undertake renovations may require approval from the owners corporation and this will depend on the type of renovation required.
Renovations fall into three categories; cosmetic changes, minor renovations, major renovations. Renovations other than cosmetic work or minor renovations require the permission of the owners corporation by a special resolution. Major renovations need a higher level of approval because such work may seriously affect the common property. This applies to structural changes; waterproofing; work that changes the external appearance of your lot, such as an access ramp; and any work for which approval is required under other laws.
What happens with defects in the building?
Builders are required to provide statutory warranties on the construction of residential premises. The warranty period for new residential building work is 2 years for all defects and 6 years for `major´ defects from the date the building work was completed.
The owners corporation must notify the developer or builder of a potential defect as soon as it becomes aware of it. To secure rights under the warranties, legal proceedings must commence within the relevant warranty period (2 years or 6 years).
What is a By-Law
All strata schemes have a set of by-laws (rules) that owners, occupiers and, in some cases, visitors must follow.
By-laws cover issues such as whether or not pets are permitted on the scheme, how smoking is regulated, parking, noise, and the conduct of residents and visitors.
The owners corporation can enforce these rules through the Tribunal, which may penalise a person who breaches a by-law. Owners corporations can determine the bylaws that suit the preferred lifestyle of the strata scheme.
By-laws cannot be harsh, unconscionable or oppressive, restrict children from the scheme, or restrict dealings in a lot, such as the owner renting out their lot.
You can access a set of model by-laws from the Fair Trading website, which provide ‘sample rules’to guide the owners corporation in setting their own by-laws. These may be adopted as is, or with changes to suit the individual scheme’s requirements.
What are contributions/levies and special levies?
What is a strata managing agent and their responsibilities?
What is the administrative fund and the capital works fund?
What happens when contributions remain unpaid?
Can a strata manager approve renovations?
Can a strata manager earn commissions or training benefits?
Can my client pay for the strata report?
Will I need to pay upfront for the report?
How do I order a strata report?
What format will I receive the report in?
Why do I need a Strata Report?
Why is the strata plan number different is different on the contract of sale
What do you look at when you carry out an inspection of the records?
Can I purchase a report that has been prepared for a different lot?
Glossary
- A/F Administration Fund
- AFSS Annual Fire Safety Statement
- AGM Annual General Meeting
- BMC Building Management Committee
- CA Community Association
- CP Common Property
- CW/F Capital Works Fund
- DP Deposited Plan
- EC Executive Committee
- ECM Executive Committee Meeting
- EGM Extra–Ordinary General Meeting
- ia inter-alia (amongst other things)
- I&E Income & Expenditure
- MA Managing Agent
- OC Owners Corporation
- SC Strata Committee
- S/F Sinking Funds
- SP Strata Plan
- SCM Strata Committee Meeting
- UE Unit Entitlements
- WH&S Work Health & Safety
Other Concepts
- The levies and any outstanding levies for the unit noted in the reports are as advised to TSRS by the manager, frequently supported with a photocopy provided by the manager
- Levies are normally calculated after an AGM passes its annual budget
- Sometimes vendors are in arrears; arrears are noted in documents provided and confirmed to the buyer before settlement
- The arrears may persist until settlement and should be adjusted at settlement
- After an exchange of contracts, the vendor is obliged to provide the purchaser with a Section 184 Certificate which discloses several details about the strata scheme, such as the current insurance details, names of the Committee members, Office Bearers and Strata Manager as well as the levies payable by the lot and any arrears
- In essence therefore, the buyer obtains the unit being purchased free of any debts to the strata plan
- The Strata Act has, amongst its regulations, a legislated set of “rules” or “By-laws”; these are the rules and regulations which all unit owners have to abide by; they set out the rules of behaviour for all owners living in a community situation that is home unit living( see Current By-laws.pdf)
- Each new and prospective owner of a home unit is advised by his/her legal advisor of the details of all the standard By-laws; many Strata Managers present new owners with a “welcome package” and may include a printed list of all the current By-laws governing a particular strata scheme, either the regulation By-laws + any registered changes/additions to the standard By-laws
- By-laws can only be altered, added to or repealed at a general meeting. These changes are then formally recorded/registered on the common property title within 2 years of promulgation
- It is imperative to read a copy of the official Common Property title as enclosed in a Contract for Sale of a unit; it is mandatory for the vendor to include in the contract, amongst other compulsory documents, a copy of the Common Property title and any and all registered changes/additions to the By-laws; a buyer is then fully appraised of the current situation of all the rules he/she must abide by when owning a unit in that building
- A legal advisor for a buyer will receive a contract which will include, amongst other documents, a “package” comprising the Memorandum & Articles, constitution and house rules of the Company that owns the building, often with a financial statement
- The contract should describe the number of shares and distinctive share numbers allocated to the unit; these shares allow the occupation of that particular unit
- The Memorandum & Articles/ Constitution / house rules contain the many regulations of the company