Strata Management Frequently Asked Questions

The world of Strata Management can be a confusing one, we know. IUM have compiled a list of questions we seem to be asked by clients time and again. If you have a question you would like to see answered here, please contact us and we'll try to include it for you.

Q: How much notice must be provided for Owners Corporation meetings?

A: All owners should be given a minimum of seven days notice before the meeting is due to be held. If the meeting is likely to include motions or voting for resolution, notice should also be given to mortgagee or covenant chargees.

Q: How much notice must be provided for meetings of the Executive Committee?

A: Notice of the meeting should be posted on the strata scheme's noticeboard, if it has one. Otherwise, the notice must be sent to each owner and executive committee member. The notice must be provided 72 hours before the meeting time, and should include details of when and where the meeting is to be held, along with a detailed agenda.

Q: What is defined as 'Common Property' in a Strata Scheme?

A: Common Property is defined as the part of a Strata Scheme which belongs to everybody, rather than to an individual. On a piece of land, anything not defined as part of a 'lot' is by default Common Property. This may include walkways, hallways, stairwells and garden areas. The Strata Plan will define exactly which is constituted Common Property for a particular Strata Scheme.

Q: Do Occupational Health and Safety standards apply to Strata?

A: Yes they do. If a Strata Scheme has employees, or has a commercial element, there are certain OH&S legal requirements. A few years ago, the Occupational Health & Safety Act 2000 ("The Act") and the Occupational Health & Safety Regulation 2001 ("The Regulation") were passed. These document guidelines and requirements designed to identify, assess, control and minimise health and safety risks. These regulations apply as Owners have work done on common property. Under the terms of the regulations, the Owners Corporation is deemed as an "Employer" and the building deemed a "place of work".

The Act itself requires the identification of hazards and the adoption of risk control measures. Additionally, The Regulation describes the way those in charge of premises must manage associated risks. Owners Corporations and Executive Committees controlling premises where work is to be performed have specific obligations and duties relating to the identification of hazards either to the public where work is performed on common property, or to the contractor carrying out the work. Identified hazards are then eliminated if reasonably practical, or minimised to the fullest extend possible. Control measures relating to these hazards are then assessed regularly to ensure appropriate risk management.

Workcover NSW recommends certain risk assessment measures and each building should ensure an OH&S Audit Report has been completed to ensure compliance. Contact us if you need to talk further about this.

Q: What needs to be included in an OH&S Audit Report? (See Question above)

A: AN OH&S Audit Report should contain the following:

• Identify hazards potential or actual within the building, providing photographs or diagrams to indentify exact location.

• Fully assess and describe the risks associated with each hazard.

• Provide the Owners Corporation with a strategy for managing the risks including appropriate control measures to be employed.

• Supply appropriate tools and guidelines to allow the Owners Corporation to implement control measures, and to develop risk management policies and procedures.

Q: What are "Unit Entitlements"?

A: Each Strata Plan details the complete list of lots within the strata scheme, and lists a corresponding allocation of "Unit Entitlement". The total of all of the units on the plan is called the "Aggregate Unit Entitlement". The Unit Entitlement is used to determine the lot owner's:

• Share of common property.

• Voting rights in the event of a poll.

• Right to a share of surplus Owners Corporation administrative or sinking fund monies.

• Right to a share of compensation in the event of a public authority resuming whole or part of common property.

• Proportion of maintenance levies; and

• Obligation to contribute to repair and maintenance of common property held under a joint exclusive use by-law.

Q: What is a "Sinking Fund Forecast Report" and what does it contain?

A: A Sinking Fund Forecast Report provides the Owners Corporation with budgeting information which can be used to plan for future costs. As maintenance expenses are almost inevitable over time, using a forecast allows levies to be set to ensure that each owner pays a fair share of the costs. Forecasting also reduces the risk of having to impose special levies for unexpected expense. The forecase provides the following:

• A list of common property items likely to require repair, maintenance or replacement.

• An estimate for each item as to when the identified action will need to be taken.

• An estimate of the cost involved.

• A calculation for the Sinking Fund levy contributions required to meet these costs, including bank interest, income tax and GST.