What do strata fees include

These contributions are called strata fees. A strata fee or levy is the contribution you make as an owner to ensure the maintenance of your common areas of the property. Strata laws vary between states, but typically, these fees are collected quarterly or biannually. The financial commitments of a strata fee ensure that the following are covered:. This would cover most cleaning and gardening costs, any shared utility bills, body corporate insurance, and any general repairs or maintenance.

This may include renovations such as the replacement of roofing or the repainting of walls. Strata fees must be paid by those who own an apartment or home within a larger building complex. You will not pay strata fees if you are renting. Most landlords will account for these costs by rolling them into the monthly or weekly rent charged for the property. Depending on the property, strata fees can vary. The number of communal amenities will influence the cost, i.

The difference depends largely on where in a city you live. Strata fees are typically tax deductible. So long as you keep a general record of expenses made on your property, you should be able to provide details on what can be claimed. Usually, if the fee falls into the administrative or sinking fund, you can claim a deduction.

As with any legality, there are laws involved to make the process of a strata scheme a smoother one. Strata bylaws encourage communal living. Strata bylaws can include the ruling of noise regulations, parking arrangements, any changes to the common property and the allowance of pets. Although strata fees vary by state, the basic understanding amongst consumers is that strata are complex and confusing.

However, with the right tools and research, you will come to appreciate that it exists to make your life as an owner much easier. Below we dissect the basic points of why strata fees exist to help you understand the ins and outs of this complex scheme.

A strata scheme is a system put in place to deal with the legal ownership of a portion of a building. For example, if you have purchased an apartment in a building, you share ownership of that building with other tenants. Strata fees apply for residential and commercial and include; apartment blocks, villas, townhouses, duplexes, storage units, and factories.

A strata scheme is governed by a set of bylaws designed to ensure residents are safe and secure, encourage harmonious communal living and protect the look and quality of the building. The contents of bylaws cover a large range of operational obligations, including garbage disposal, noise restrictions, parking and potential renovations.

It is important to note that bylaws are put in place to ensure respectful and inclusive living and must not be harsh or oppressive. If a bylaw has been breached by a tenant or owner, penalties and fines will be enforced, so it is important to make sure you read through the current bylaws before moving into a strata building. The strata fees essentially cover everything that will ensure your property and the building remains in good shape for use by the tenant.

But a competent strata manager will save the owners corporation money by putting in place industry best practices that result in significant savings. Mismanagement of a strata project may incur fines and penalties by the owners for negligence on the part of management.

If special levies are a regular occurrence at your building, it might be a good time to take a closer look at the management of your scheme. Strata fees will vary from one property to another. Variations may be due to the age of the structure, location and size of the property. The market price of the apartment also plays a crucial role in the fees to be contributed. The number of common or shared amenities, including swimming pools, gyms, and playgrounds, will raise costs due to the need for constant maintenance.

You can only make strata fees comparisons against similar units. When comparing your strata contributions, you should do so against an equivalent unit in terms of location, amenities, size and age. For starters, levies may be calculated depending on how high a unit is in a building. Invariably, older structures need higher maintenance costs. Other things such as lighting, security and availability of services Are also a factor. Things such as cleaning, laundry, and concierge all come at extra costs.

Executive amenities like gyms, rooftop gardens, theatre spaces and pools are fantastic to have in your apartment building and mean that you pay more for their maintenance. All of these variables will inform the final calculated value for the strata fee for each lot. While there is no legal framework governing the strata fees, various studies have revealed the average expected rates in specific locations. Strata complexes in NSW with facilities have average strata fees of between 0.

Those without many facilities will charge between 0. In NSW, units without facilities may use that fact as a selling point to attract purchasers. That translates to an average of 0. In South East Queensland , there are many complexes with much lower-than-average levies. Strata fees will vary widely based on many factors, making it increasingly difficult to set a specific price range and carry out a comparison. While a complex might look new, its historical maintenance will determine how the owners corporation will determine the chargeable levies.

A lien allows the strata corporation to start the process to foreclose on a strata lot. A lien may not be filed for unpaid fines. Any of these actions must consider the limitation period. On June 1, , the basic limitation period under the BC Limitation Act for debt collection changed to two years. For strata corporations this means that some debts - such as special levies and strata fees - that become due and owing are generally not collectable after a two-year period.

Please note, since the Limitation Act was changed in , subsequent court cases and Civil Resolution Tribunal decisions have indicated that the two-year limitation period does not apply to the collection of strata fines.

Strata corporations can receive revenue from other sources as well. Contributions to fund common expenses can come from: interest on investments, fines, payment for parking, leasing space for cell phone towers, sale of assets, even revenue from the laundry room.

Strata fees and the annual budget are approved by a majority vote each year at the annual general meeting AGM. Before each AGM , the strata council must prepare an annual budget for the strata corporation's upcoming year, and distribute it with the notice of the AGM at least two weeks before the AGM. Section budgets: strata corporations with sections will have more than one budget. There will be:. The strata corporation budget is voted on at the strata corporation AGM and the section budget is voted on at the section AGM.

The budget usually contains a single line item indicating the contribution to the contingency reserve fund CRF. Contributions to the CRF must be made with consideration to the depreciation report , if any. The depreciation report provides detailed estimates for maintenance, repair and renewal costs, over a year time period. A budget surplus occurs when the contributions to the operating fund for the previous fiscal year exceed the actual expenditures.

A budget surplus can be dealt with in a new budget in one or more of the following ways:. A budget deficit occurs when the actual expenditures exceed the contributions to the operating fund for the previous fiscal year.

Under the Strata Property Act , a budget deficit must be eliminated during the next fiscal year. Funds from the contingency reserve fund CRF can be lent to the operating fund to cover temporary shortages during the current operating year. If a temporary loan is made:. Before every AGM annual general meeting , the strata council, and section executive, must also prepare a financial statement for the present fiscal year that is just ending, and distribute it with the notice of the AGM.

The purpose of the financial statement is to report on the strata corporation's actual income and expenses for the year that is just ending. The financial statement must start from the beginning of the fiscal year and cover a period not less than up to two months before the AGM annual general meeting. Within eight weeks after the strata corporation fiscal year end, the strata corporation must prepare a financial statement updated to the end of the fiscal year.

The financial statement must contain the following information:. The strata corporation must file a tax return for each fiscal year with the Canada Revenue Agency, and must provide a copy of their annual financial statements with their tax returns. Most residential strata corporations are essentially non-taxable corporations.