Levies and Sinking Fund – more State-based detail coming soon
The primary source of funding for most strata schemes is from owners through levies. To enable owners to properly plan their finances and for scheme cash flow to meet expenditure, planning and money management by owners committees and managers is critical. Almost all states regulate budgeting (at least for day-to-day expenses) on an annual basis. The extent of regulation and control varies, and the level of disclosure and approval ranges from none to all-owner approval at a general meeting. In some states, longer term planning or estimating for sinking funds is also required. Audits must be considered annually in some states, while for others they are only required for larger or more active schemes. Reporting the actual financial position of a strata and community title scheme is another important aspect of scheme management. It is also generally well regulated and controlled. In most states annual accounts are required to be presented to owners at annual general meetings. Small schemes have exceptions from some accounting requirements in South Australian, Victoria, Western Australia and New South Wales. Non-payment Levies must be paid by the due date. Lot owners cannot object to a levy by not paying it. Only some states make owners automatically responsible for interest if levies and fees are overdue and where interest is applied it is different from state to state. In some states schemes can reduce or waive interest. While most states allow legal action to recover levies and fees in the civil court system, Victoria requires those actions to be in VCAT (www.vcat.vic.gov.au) and in Tasmania the Recorder of Titles (www.dpipwe.tas.gov.au/inter.nsf/ThemeNodes/SSKA-4X33TR) can order payment. Only some states expressly make owners liable to pay the scheme’s recovery costs so that the scheme is not out of pocket from chasing overdue levies and fees.