Frequently Asked Questions

Q.  Please explain the difference between a 'lot' and the 'common property'?

A. The term ‘lot’ covers the land, buildings and airspace on a plan of subdivision that can be sold to individuals or companies. You will also hear the term 'accessory lot' being the car spaces, storage cages and storerooms etc.

The remainder of the land, buildings and air space is considered ‘common property’ and is therefore owned jointly by all the owners.  Every strata plan or plan of subdivision will identify both the lots and common property.  Be sure to read and understand the plan in detail before purchasing.

Q.  What is the difference between a Strata Scheme, Body Corporate and an Owners Corporation?

A. Generally speaking there is no difference except to say the names change as you move around Australia and the individual State Acts of Parliament also vary in detail. In Victoria we now operate under the Owners Corporations Act 2006. 

Having said that ‘strata title’ or simply 'strata' is the nationally (and internationally) recognised term for this type of community living.  The Strata Titles Act 1967 was the first legislation in Victoria to simplify the process of purchasing strata title (lots) where all owners jointly owned the common property.

Q.  What benefits would a manager bring to our owners corporation .. if any?

A. Your manager should hold a qualification in strata (CPSM) or at least several years of experience in dealing with property related issues. Managers operating dedicated strata software can streamline processes and relieve owners of hours of work and stress involved in preparing budgets, calling meetings, co-ordinating maintenance, collecting fees and chasing outstanding arrears.

A great manager will give you back your life by streamlining the various procedures involved in operating an OC ... without costing you the earth! 

Q.  Why are strata (OC) management fees and charges so difficult to understand?

A. The reason, for the most part, is because fees and charges are often not discussed fully prior to signing up with a new management company.

The costs involved in operating lifts, pools, gyms and spas for example must be fully explained up front as these costs will increase into the future. The more facilities an apartment complex offers the more expensive the levies become as the building ages.

Most importantly if you don’t understand the fees and charges or if the terms of the Contract of Appointment (CoA) are unclear then you should definitely look elsewhere before making a decision.

Q.  How do we go about removing our current management company?

A.  Firstly locate a copy of your Contract of Appointment (from your Chairperson or Secretary / Manager) and note down the expiry date of the contract.  Speak with your committee members to call a special meeting or a ballot by email or post.  In the meantime approach other management companies for their fees and charges and be sure to ask all the relevant questions as set out here in our website.  

Once you have a majority vote (ordinary resolution) the Chairperson must advise your current manager in writing of the resolution (a month’s notice at least prior to the expiry date) and the decision to remove them. At that point the manager is required to return all records to the Chairperson or new manager within 28 days.  Note: However if the situation with your manager is 'out of control' and the expiry date is a long way off then you can and should apply to VCAT for a final decision on the matter. 

Q.  My strata scheme has a maintenance fund in place.  Am I required to pay into the fund considering I live interstate and particularly as I may sell my property in the short term?

A. Yes, you are required to contribute. The funds are there for a ‘rainy day’ if you like.  The common property is going to experience its share of maintenance issues over time and the original owners before you have made a very wise decision to contribute funds for future capital works.

Without a maintenance fund in place owners would be faced with a ‘special levy’ to cover capital works in addition to their usual quarterly levies. Financially this would be an unacceptable situation for most owners therefore establishing a maintenance fund (sinking fund) is highly recommended.  

Q.  How can we encourage other owners in our complex to attend meetings and become involved in the upkeep of our apartment block?  We are all very busy people so this cannot be an excuse.

A. Indeed attendance at meetings is an important part of connecting with neighbours and staying in touch with what is happening in your strata community. There really is no excuse for non-attendance with teleconferencing and other electronic options available to those unable to physically attend. Having said that there will always be those owners who will avoid any involvement with their strata community in fear of having to contribute in any way. Ongoing communication is a great starting point! 

Q.  The process of following up on arrears is preventing us from achieving outcomes as a community. How can we best deal with outstanding levies?

A. This problem is universal unfortunately, as buyers all too often underestimate the impact ongoing levies will have on their personal budgets.  Without strict procedures in place some owners will delay paying their levies until they are faced with VCAT orders and legal fees. 

This is where a good manager will set up procedures for collecting levies and ensure every owner is made aware of how the OC operates from that point. Once again good communication is the key!