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Strata Management

Strata Management Archive – Stratarama

strata-manager-vs-property-manager

Video Explainer – Strata Manager VS Property Manager

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Strata Manager vs Property Manager

Confused about who does what? You’re not alone.

Understanding the difference saves time and frustration.

A Property Manager works for one owner—handling tenants, rent, and individual unit maintenance.

A Strata Manager works for everyone—the entire strata corporation. They manage common property areas in, on and around your buildings, annual and extraordinary meetings, insurance, and ensure compliance with strata laws.

Each is a specialist in their field.

You wouldn’t hire a lawn contractor to cut your hair—even though they both use blades.

Own an investment property in a strata complex? You might need both. One manages your tenant, your Strata Manager manages the Corporation. Not sure who to call?

strata-meetings-your-attendance-and-voice-matter

Video Explainer – Strata Meetings – Your attendance and voice matter

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Think attending your AGM doesn’t matter?

Think again.

Your strata property is one of your biggest investments.

Strata meetings decide how much you pay each quarter, what gets fixed first, and even whether your neighbour gets approval for that renovation.

Can’t make it to the Strata meeting? No problem—but don’t skip your opportunity to vote by proxy. You can appoint a person to represent you and cast your vote.

Your vote might be the difference between getting a decision made or increasing levies to cover costs of having to reschedule the meetings.

Want something on the agenda? Contact your strata manager before the strata meeting to make sure it’s included. Don’t miss your chance to be heard.

Knowledge and communication are key. Make your vote count.

What Happens When You Don’t Pay Your Strata Fee

Simple Guide to Sinking Funds in Strata and Community Living

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Sinking Funds in Strata and Community Living

If you own a strata or community‑titled property, you’ve probably heard the term Sinking fund. Some States call it a capital works fund or maintenance fund, but the idea is the same everywhere: it’s a shared pool of money set aside for future repairs and major expenses. In South Australia, we call it a Sinking Fund.

This guide breaks down what Sinking funds are, why they matter, how levies work, and how owners can plan for long‑term maintenance without financial stress.

What Is a Sinking Fund?

A Sinking fund is a dedicated account used to pay for major future expenses in a strata or community‑titled property. A long‑term savings fund for the building if you will.

All owners contribute to this fund through regular levies. Depending on your Title and facilities, the money can be used for big‑ticket items such as:

  • Major roof repairs or replacement
  • Painting the exterior
  • Replacing gutters, fencing, or driveways
  • Lift / Fire System/ Security system upgrades or end of Life replacements
  • Garage door replacements
  • Other major works on or to common property
  • Agreed property improvements (such as installations that weren’t there prior, maybe a vehicle gate for example)

In South Australia, Sinking funds are legally required for Community Titled properties under the Community Titles Act 1996. While not mandatory under the Strata Titles Act 1988, they are strongly recommended, and owners must still consider long‑term costs when budgeting.

Sinking Fund vs. Administration Fund

It’s easy to confuse the two, but they serve different purposes:

Administration Fund

Used for day‑to‑day and regular running costs, such as:

  • Gardening
  • Cleaning
  • Insurance
  • Annual servicing of items (lift, fire, alarms, security systems, etc)
  • Minor repairs

 Sinking Fund

Used for long‑term, major expenses that don’t occur every year.

Having both ensures the corporation can manage routine costs while also preparing for future repairs without sudden financial shocks.

Why are Sinking Funds Important?

There are two main reasons Sinking funds matter:

  1. Legal Requirements

Some States require them by law, especially for larger or community‑titled schemes. In South Australia, as noted above, they are legally mandated by the Community Titles Act 1996.

  1. Practical Financial Planning

Without a Sinking fund, every major repair would require a special levy. A special levy means owners need to pay large, unexpected amount at short notice. Not only is this inconvenient, but it can also delay urgent repairs if owners can’t pay immediately. No one likes a large bill at short notice, so raising funds in smaller amounts is fairer for all owners whether new or old, as members are all contributing to the pool of funds over a long period of time.

A well‑funded Sinking fund ensures the corporation can act quickly and responsibly when maintenance is needed.

How Sinking Funds Work?

When you buy into a strata or community titled complex, you own your individual unit/lot, a shared interest in the assets of the Corporation (including funds in the account), plus a shared interest in the common property. The strata/ community corporation is responsible for maintaining it. The Corporation is made up of its members (the unit or Lot Owners).

Owners plan ahead by identifying which parts of the common property will need attention over the next 5–10 years (or longer). They then create a financial forecast — often called a Sinking fund plan — which outlines expected costs and a plan for saving money for this.

This long‑term planning helps smooth costs to aid with financial planning, to avoid sudden special levies, which can be stressful and expensive for owners.

What is the Common Property?

Common property can be confusing, but it generally includes anything outside the boundaries of individual units or lots. The definitions are different between Strata Titles Act 1988 and Community Titles Act 1996. In each, your property will be different to any other, and will be determined by the legislation, your property plans, and articles or by-laws.

Some examples include:

  • Exterior walls, roofs, balconies, and foundations
  • Fences, gates, and exterior painting
  • Shared wiring, plumbing, and drainage
  • Lifts and stairwells
  • Shared laundries, bin rooms, and car parks
  • Security systems
  • Gardens and driveways

Some structures—like garages or courtyards—may be exclusive‑use areas but still fall under common property rules depending on the plan.

The Sinking fund covers major maintenance on shared common property areas.

How Levies Are Set and Collected?

Levies are decided each year at the Annual General Meeting (AGM). Owners vote on the budget, which includes contributions to both the Administration fund and the Sinking fund.

Key points:

  • Levies are compulsory for all owners.
  • They are usually paid quarterly.
  • If levies aren’t paid, the corporation can take legal action and charge interest (up to 15% per year in some cases).
  • The amount each owner pays is usually based on Unit Entitlements, though some schemes use a flat fee.

Attending AGMs is the best way to understand how levies are set and to have a say in the budgeting process.

How Much Should Be in a Sinking Fund?

There’s no one‑size‑fits‑all answer, but good planning helps avoid shortfalls. A general opinion is that more is better, because maintaining your biggest asset is important, and costs continue to increase. Whilst some do simply pick an amount to put away, this rarely prevents a special levy. It often comes to fruition that those who put some planning into their levy contributions and stick to this, have sufficient funds available for major works as and when required.

Many corporations will engage professionals to prepare a Sinking fund assessment/ forecast, to provide a report. The up-front cost of this helps take away the guesswork, takes into account many of the points raised below.

If you’re estimating it yourself, consider these steps:

  1. Identify Future Expenses

List all major works expected over the next 10 years. An audit/ property inspection report/ plan of the property can help identify upcoming repairs.

  1. Estimate Costs

Get quotes or estimates for big items like roof replacement, painting, or driveway resurfacing. You can use this to aid in determining life-span of existing infrastructure, and future replacements.

  1. Review Past Costs

Previous repairs give a good indication of future needs.

For example: You painted previously and you don’t paint each year; when will the property need to be painted again to ensure the timber remains protected from the elements?

  1. Consider Inflation

Labour and materials increase in price over time, so factor this in. At minimum consider CPI annually on the items budgeted, but remember that the BCI (building cost index) shows costs increasing annually at a higher rate than CPI, so allowing for greater annual increases should be considered.

  1. Calculate Contributions

Work backwards from the total cost.

For example: If a $100,000 roof replacement is needed in 5 years, the fund must accumulate $20,000 per year. That’s just for this one line item only, so all other proposed repairs/ savings must also be added to the total. Divide this by the number of owners per their unit entitlement share to determine individual contributions each year / quarter.

  1. Stay Updated with Legislation

Rules around capital works planning vary by State and can change, as can the legislation around some of your maintenance items.

For example there could be a legislative change to a Fire system, that increases how or when certain items are maintained/ replaced which would require your plan to be amended.

How Sinking Funds Relate to Individual Lot Maintenance

Owners are responsible for maintaining their own lots. The Corporation only maintains common property. What is your lot and what is common, as mentioned, is determined by the Strata or Community Act and your plans and agreements.

If an owner lets their property fall into disrepair and it affects the building, the corporation can require repairs—and the owner must pay for them.

How Owners Can Use Sinking Fund Money

To spend money from the Sinking fund, owners must pass a formal motion at an AGM or an Extraordinary General Meeting (EGM). Depending on the expenditure and previous agreements, the Committee may also have authority to use these funds. Again depending on the Title of your Corporation, resolutions may also have spending limits per project; requiring a different type of motion; ordinary, special or unanimous (this is how many people must agree to it before it can proceed).

Once a project is approved, the Sinking fund can be used for that specific common property expense.

The goal is to spread the cost of major works over many years rather than hitting owners with sudden, large special levies.

What If the Sinking Fund Isn’t Enough?

The unexpected can arise OR the item you are budgeting for, may become critical sooner than expected.  Issues could also arise from under budgeting.

In these cases, owners may vote to raise a special levy to cover the shortfall. The group may also elect to use some of the funds allocated for other forward planned maintenance by readdressing the priorities.

Good planning helps avoid this situation, but having it’s a safety net when needed.

Final Thoughts

A Sinking fund is one of the most important financial tools in strata and community living. It protects owners from sudden costs, ensures the property stays in good condition, and supports long‑term financial stability.

By understanding how Sinking funds work—and by participating in your corporation’s decision‑making—you help safeguard the value of your property and the wellbeing of your community.

Strata Community Association 2021: Australiasia Conference & Awards

SCA Australasia: 2024-25 Strata Community Excellence awards

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Stratarama is pleased to announce our CEO; Tony Johnson FSCM was last week awarded the SCA AUSTRALASIA 2024-25 Strata Community Excellence award for Senior Community Manager.

Tony received this award in front of over 400 peers and delegates at the Australasian conference in Hobart Tasmania. Finalists from ACT, NSW, NZ, QLD, VIC & WA contested this category.

A finalist at an Australasian level for this category twice prior (and Strata Manager 3 times previously), Tony was recognised with the 24/25 award to the delight of several Stratarama Team Members in the audience and to the congratulations of the entire team at home in Adelaide.

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Lionel Colaco was also recognised as a Finalist in the category of Strata Community Manager of the year 24/25 following his South Australian win in this category in 2024. Whilst Lionel didn’t come home with the award this year, its important to mention how difficult it is for the judges to determine a winner, and to be in such a field from right around Australasia is such a huge credit to him and the organisation. We are all so very proud of Lionels contributions to the team and our clients.

buying-into-strata-the-report

Video Explainer – Buying into strata? The report

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Buying into a strata?

What is the Strata Report; Section or Search document?

  • Financial health—Are levies up to date? Are there special levies?
  • Maintenance history—Any major repairs coming or works placed on hold? 
  • Disputes—Are there ongoing issues in the building?”

This report forms part of the Form 1 document helping you to avoid surprises and make informed decisions Such as:

  • Can I keep a pet?
  • What are the insurances?
  • What is my share of costs?

Always ask questions before you buy. Learn more at Stratarama.com.au

No two Strata groups have the same costs, maintenance and levies

how-are-strata-levies-calculated

Video Explainer – How are strata levies calculated?

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How are strata levies calculated?

Let’s break it down!

Levies are based on the budget owners approval and can cover three key ways of raising funds:

  • Administrative Fund – For everyday/ year costs like gardening, cleaning, insurance, fire & lift contracts and bills.
  • Sinking Fund – long-term saving for projects like roofing or painting.
  • Special Levies – For unexpected or planned major expenses.

Each owner pays based on unit entitlements, basically a percentage, applied by the strata plan.

No two Strata groups have the same costs, maintenance and levies

What is a long term strata maintenance plan

Video Explainer – Long term Strata Maintenance Plan

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What is a Long-Term Strata Maintenance Plan?

A well-planned strata means fewer surprises!

That’s where a Long-Term Maintenance Plan comes in.

It outlines:

  • Future repairs and asset replacement – such as repairing or replacing gutters, roofs and much more
  • Estimated costs over multiple years broken down by item/ asset, setting recommended sinking fund levies— so levies stay predictable.

Planning ahead protects property value and avoids costly emergency repairs! Allowing Members to create a sinking fund of savings”

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