As a lot owner you must financially contribute towards the running costs associated with your building and common property.
These contributions are called levies and they are payable to your strata scheme.
Levy notices are commonly distributed to each owner four times a year to meet the financial obligations of the Owners Corporation. Some Owners Corporations have half yearly or yearly levies. Payment options are detailed on the levy notice.
As part of VBCS’s management agreement we will send levy notices to owners on behalf of the Owners Corporation.
It is important to pay your levies on time, every time. Penalty interest is usually applied to late payments. It is your scheme who receives these funds.
Once levies have been collected from all owners, they are typically divided into two funds; an Administration fund and a Maintenance fund (if applicable).
The Administration fund is used for regular payments including council expenses, insurance, management fees and payments to service contractors, cleaning, general maintenance and utilities such as power and water.
The Maintenance fund is not obligatory for all Owners Corporations. Prescribed Owners Corporations (more than 100 lots or budget of $200,000) must arrange a Maintenance Plan to be prepared.
If the plan is approved, a Maintenance Fund designed to meet the identified expenses is required. It is essentially a separate savings account for the Owners Corporation intended to meet future non-recurring maintenance expenses and capital items identified in the Maintenance Plan.
By having a Maintenance Plan, or some form of capital works fund, an Owners Corporation may be able to spread the cost of capital works over time, avoiding the need for special levies at the time of undertaking the works. It makes good management and smart financial sense.