What are levies?

The role of the owners corporation is to look after the business of the strata scheme. To carry out this role, the owners corporation must set up and keep an administrative fund (for day-to-day operational expenses) and a sinking fund (for long-term future expenditure). The owners corporation must estimate how much money is needed each year for the funds to cover all the expenses and needs of the strata scheme. The levy amount to be paid by owners is decided at each annual general meeting by a majority vote. All levies must be worked out based on the unit entitlements of each lot. Levies are usually paid every 3 months.

An owners corporation has the same type of expenditure as a conventional householder. There are council rates, water and electricity charges for common areas, building and public liability insurance and repairs and maintenance of common areas. In a strata scheme, there is also additional expenditure such as workers compensation insurance, building valuations, the resolution of any disputes which may arise within the scheme and any other matters related to the running of the scheme.

Lot owners must be aware that they will be required to make regular contributions to the owners corporation to cover the maintenance and administration of the strata scheme. Owners should pay close attention to the quality and finishes of a building as everything the scheme has to offer must be maintained eg. swimming pools, lifts, tennis courts, saunas etc.