Frequently Asked Questions

The frequently asked questions has been divided into subject groups as listed below:

Q. What is a Strata Property?

A. Any property which is located on “common’ property e.g. a unit, villa or townhouse. This can include a complex with ranging from either 2 – 1000 residences. The “common” property is the overall complex where your prospective residence is situated.

Q. Can Different Lots be Required to pay Different Portions of the Insurance Premium?

A. Yes. For example if the commercial lot has a high consumption of power due to refrigeration and air-conditioning, they may be levied to pay higher levies.

Q. Are dishwashers covered under the strata Scheme's insurance policy?

A. No, they are not plumbed or wired in and can be easily substituted.

Q: Can I keep an animal?

A. Permission must first be obtained from the Owners Corporation before keeping an animal in your unit. It also depends on the by-laws. The Owners Corporation cannot prevent a resident from keeping a Seeing Eye dog.

Q: What are by-laws?

A. Rules enforced by the Executive Committee/Owners Corporation and can be hanging washing on your balconies, parking etc Some Executive Committee’s/Owners Corporation’s are very strict and may issue an infringement notice to comply.

Q: Can I install a Security Door?

A. You will need Owners Corporation approval for two reasons. First the security door will be fixed to common property. Second, it will normally be visible from outside the lot.

Q: Can I install air Conditioning?

A. You will need Owners Corporation approval. The air conditioning unit is likely to require alterations to common property and it will be visible from the outside of the unit. In addition, noise may be a concern and there are some complexes in Sydney where there is insufficient electrical power to allow air conditioning units.

Q: Can I make Internal alterations to my unit?

A. That depends. If the alterations affect common property you need Owners Corporation permission. If you remove an internal wall it is likely to affect common property because the wall possibly supports part of the common property.

Q: Our building needs painting but there are not sufficient funds in the Owner’s Corporation's bank account to cover the cost. What can we do?

A special levy must be raised at a general meeting to cover the cost of the works.

Q. What are my rights and responsibilities in a Community or Neighbourhood Scheme?

A. Many intending purchasers do not know their rights and or responsibilities when purchasing into a community or neighbourhood scheme. Schemes range from rural subdivisions with irrigation channels as association property to large closed communities with private roads, high security and extensive recreational facilities such as marinas and golf courses.

Ensure you understand your rights and responsibilities by reading the Office of Fair Trading booklets we provide with our strata related reports. The booklet provides general information on:

Including motions in AGM agendas
Understanding executive powers
How by-laws are made and changed
How to enforce by-laws
To know what insurances are compulsory
To know what the management statement is etc

To obtain a copy contact our office info@opr.com.au or download a copy from www.fairtrading.nsw.gov.au.

Q. What are Building Management Committees?

A. The development of large multiple use buildings created the need for a new type building management that is more flexible than allowed in strata title.

An example is DP 1009261, Grace Bros building in the Sydney CBD, which comprises of 3 lots occupied by Grace Bros, Merchant Court Hotel (levels 8-25) and SP 61890 (levels 26-36). Clearly the 3 sets of owners have vastly differing interests and in combination form a body that is not quite like any other and almost certainly not suitable for management under a ‘catch-all’ piece of legislation such as the CLM.

A registered Strata Management Statement (SMS) governs the management of the building, which is essentially a contract between the 3 parties. The content of the SMS is not prescribed by legislation and is subject to some specific insurance requirement in the SSM, which may deal with any issue that can be contracted.
One characteristic of this development type is the extensive use of cross-easements. Typically an Association will use easements when interests of a number of parties intersect a stratum development e.g. the entrance to an apartment lift might be in an office-building foyer.

One important area is allocation of operating expenses. Instead of Units of Entitlement a typical SMS will allocate the cost of shared items such as insurance, lifts, plant, air conditioning and car parking, according to an item-by-item formula set out in the statement. Unit owners in the strata plan still pay levies to the Owners Corporation, as in any other strata plans, but the Owners Corporation will pay a proportion of the cost of shared facilities according to the formula.

In the Grace Bros example, the SMS provides for a Building Management Committee (BMC) with 1 representative from each of the commercial lots, Owners Corporation and Knight Frank (NSW) Pty Ltd as building managers.