Frequently Asked Questions

The Annual General Meeting (A.G.M.)
As the name implies the annual general meeting occurs once each year, usually around the same time. The purpose of this meeting is to cover a number of statutory and administrative issues that are essential to the ongoing management of your scheme, these include;

• electing your strata committee
• reviewing and approving the annual financial statement
• establishing a budget and strata levies for the coming 12 months
• reviewing and approving the strata insurances
• approving the annual fire safety statement (if one applies to your scheme).

A General Meeting
General meetings of the Owners Corporation are usually called when the need arises through the year, such as approving major maintenance works or raising special levies. They may be convened by the appointed Secretary, the Strata Committee or by a written requisition of owners whose total Unit of Entitlement exceeds 25% of the total ownership in your scheme.

Strata Committee Meetings
Committee meetings are held by your strata committee to determine day to day administrative issues affecting lot owners and your scheme, such as;

• reviewing quotations and approving maintenance works for the common property
• granting approval under the strata by-laws, e.g. granting approval to keep a pet
• administering by-law complaints
• granting approval for minor renovations to lots
• reviewing financials and expenditure.

Strata Legislation does not obligate the Strata Committee to convene meetings at any particular time during the year, as such committee meetings are usually held as the need arises.

Solid financial underpinning will allow a pro-active approach to the administration of your property, so matters may be addressed as the needs arise, rather than when the funds permit. This will mean that not only will the value of your asset be retained, but will increase over time.

It will also mean easier saleability, higher rental returns and ultimately higher values when your property is sold.

Accordingly, your levies should be considered as an ‘essential investment contribution’ to the immediate and long term requirements of your scheme, not simply another annoying expense.

So, what do my levy contributions pay for?
Your levies contribute to the operating and long-term expenses of your strata or community scheme property. They are divided into two separate funds; the Administration fund for current operating costs and the Capital Works Fund for long term, large scale maintenance costs.Administration Fund
The administration fund is intended to provide adequate funds for the running costs of the shared property at your scheme, for example;

• Insurances Common
• Electricity Costs
• Audit & Valuation Costs
• Gardening and Lawnmowing
• Cleaning of Common Areas
• Management and Administration
• General Maintenance
• Annual Fire Certification
• Common Water Consumption
• Taxation and Statutory Costs.

There are other types of administration expenses, many of which will depend on the facilities at your property such as caretaking services, automatic garage doors, elevators, air-conditioning plants, swimming pools, gymnasiums, shared hot water systems etc.

Capital Works Fund
The Capital Works Fund is intended for the long-term maintenance of the buildings and improvements at your property, such as replacement of common area carpet, repainting of common areas, replacement of building components or building refurbishment etc. This fund is required to accumulate over time so that the scheme has sufficient reserves to accommodate these long-term maintenance items as they arise.

How and when are levies determined?
Your levy contributions are reviewed yearly by the owners at the annual general meeting, the amount of levies you pay is determined by you and the other owners of your scheme. This determination is usually based on the budget estimates submitted with the meeting notice. It is important that you carefully review and understand these estimates before each meeting so you are fully aware what expenses your levies are being applied to at your property.

To pay your levies, click here.

Generally speaking, the elements of your property that fall within the cubic air-space or boundaries of your lot such as internal walls, internal doors are the lot owners’ responsibility for maintenance. Those elements that fall on the boundary of your lot, I.E. perimeter walls, floor and ceiling and the elements outside your lot such as common stairwells, common garden areas and the common property generally are the Owners Corporation’s responsibility to repair and maintain.

Before determining whether a particular item is a lot owner or Owners Corporations maintenance responsibility the following should be undertaken;

• a detailed examination of the strata plan
• reviewing the date your strata plan was registered*
• a review of the strata by-laws to determine whether any specific maintenance obligations have been determined by your Owners Corporation.

*Different rules apply to schemes registered prior to 1 July 1974

For a detailed understanding of the concepts of Understanding Strata Maintenance, please refer to the following guide.

Understanding the strict legal impositions that are placed on a Strata Committee by the Strata Schemes Management Act 2015 and Regulations 2016 (the Act), the Owners Corporation itself, the Strata By-laws and other legislation is paramount. This is particularly so for owners that may not have served on a committee previously or who may not be familiar with the operation of an Owners Corporation.

The following guide has been written for all owners and Strata Committee members to assist in their understanding of what the roles, duties and responsibilities of the committee are and how they relate to the operation of the Owners Corporation.

At Netstrata we only take on the management of your scheme with Full Delegated authority, this means we are able to provide you and the owners within your scheme with complete management services for your scheme.

Rather than the owners or Strata Committee members having to undertake and be liable for the statutory duties of the Secretary, Treasurer and Chairperson, these functions are delegated to our office to ensure that your scheme is being managed and administered in accordance with its lawful obligations.

For a complete list of all the functions and services provided by our office to you, read the below guide.

Depending on the size of the strata scheme, a building manager may be appointed on a part-time or full-time basis and may also facilitate any after-hours emergency work.

Typically reports are issued by a building manager on a regular basis noting any maintenance works, improvements or items actioned for the reporting period.

Often, software is utilised by building managers to communicate with owners, occupants and managing agents on various items occurring within a scheme. Some of the software programs commonly used allow occupants to report maintenance issues, order additional access devices (keys, remotes etc.), organise a move in or out of the building (to reserve the loading dock where applicable or install elevator protection equipment) and generally to communicate with building management.

When thinking of the delineation between Strata Managers and Building Managers remember;

• Strata Managers look after Books and Records
• Building Managers look after Bricks and Mortar.

For further information of the standard duties of a building manager (and in some cases the strata manager) please refer to the following guide.

A common misapprehension is that Strata Building Insurance protects the Owners Corporation for routine maintenance items or building defects such as the repair of shower trays, settlement/movement cracks in walls and ceilings or more severe maintenance items such as concrete cancer or foundation subsidence. The easiest comparison is to think of your motor vehicle, you can insure your vehicle against having an accident, however you can not insure your vehicle for wearing out. This same principle applies to Strata Building Insurance.

How is the owner of a lot protected?
Every Owners Corporation has a statutory duty to insure ‘the building’ against accidental or malicious damage (Section 160(1), Strata Schemes Management Act 2015).

Lot space within a strata scheme (i.e. your apartment, villa, factory or townhouse) is commonly defined as;

“the cubic air-space contained within the inner surface of the boundary walls, under the surface of the ceiling and the upper surface of the floor”

Under this definition the lot owner is responsible for the repair, replacement and maintenance of all building components housed within the lot, such as;

Internal walls	Shower screens
Internal doors	Built-in wardrobes
Toilets, baths & basins	Kitchen sinks, cabinets & benchtops
Appliances such as wall and bench ovens, cooktops, range hoods, hot water heaters and bathroom & laundry exhaust fans

For example, a leaking tap washer in the kitchen or a leak through a shower screen is the lot owners responsibility to repair and maintain, however by virtue of the term ‘the building’ being included in Section 160(1), many of the building components contained within the lot are protected by the mandatory Building Insurance that is taken out by the Owners Corporation.

Simply speaking these items are the lot owners responsibility for the purposes of repair, replacement and maintenance, however they are protected by the Strata Building Insurance if they are damaged by an insurable event.

Are my contents covered?
No, the contents and fittings contained within your lot ARE NOT covered by the Strata Building Insurance and are specifically excluded from the policy, items such as;

Carpets & underlay	Light fittings
Floating floorboards	Paintwork on walls & ceilings
Wallpaper	Curtains and blinds
Wall tiles on internal walls	Furnishing or personal contents
Electrical items not hard-wired into the building e.g. clothes dryers, dishwashers, microwaves, TV, etc.

Owner-occupiers may extend cover on their contents insurance to include items not covered by Strata Building Insurance. Most major mainstream insurers in NSW are aware of the delineation between strata building insurance and contents insurance for a strata property and are happy to extend home contents insurance to include the items listed above.

Non-resident or owner investors may take out ‘Landlords Insurance’ for a sufficient sum to cover the fittings of their lot. However all owners should undertake their own inquiries with their insurer or insurance broker to ensure their contents are adequately protected by their contents policy.

To obtain an obligation free quote, click the links below;

Appeal Expenses
Provides cover for expenses incurred by the insured in appealing against an improvement or prohibition notice brought under any Workplace, Occupational Health & Safety or similar legislation. Cover is on a claims made basis and the insurer will respond to claims first made against the insured during the Period of Insurance and notified in writing to the insurer during that Period of Insurance.Catastrophe
Covers up to the Sum Insured shown in the schedule for the unexpected increase in the replacement cost of your Insured Property following a loss which occurs during the Period of Insurance, either due to the happening of an Event for which the Insurance Council of Australia issues a catastrophe code or other Event which occurs within a specified period after the Catastrophe; and b. the Event giving rise to the loss is admitted as a claim under the Insured Property section.Common Contents
Cover up to the Sum Insured shown in the Schedule for Damage to Your Insured Property (Building and Common Area Contents) that occurs during the Period of Insurance not otherwise excluded in the Policy.Electronics
Covers accidental breakdown of electronic equipment located at the insured property and listed on the Policy Schedule.Fidelity Guarantee
Cover up to the Sum Insured stated in the Schedule for the fraudulent misappropriation of Your funds committed during the Period of Insurance.Floating Floors
Covers the cost of the repair/replacement of floating floors within a Lot following an insured event as set out in the insurer Policy.Flood
Cover for damage to your insured property caused by Flood which is defined by the Insurance Council of Australia (ICA) as:
The covering of normally dry land by water that has escaped or been released from the normal confines of:

• any lake, or any river, creek or other natural watercourse, whether or not altered or modified; or
• any reservoir, canal or dam.

Government Audit Costs
Cover for Professional Fees incurred by the insured in connection with a record-keeping audit by a Government authority. Cover is on a claims made basis and the insurer will respond to claims first made against the insured during the Period of Insurance and notified in writing to the insurer during that Period of Insurance.

Legal Defence Expenses
Covers legal expenses incurred by the insured in defending actions arising in connection with the conduct of their business affairs. Cover is on a claims made basis and the insurer will respond to claims first made against the insured during the Period of Insurance and notified in writing to the insurer during that Period of Insurance.

Loss of Market Value
Covers the difference between the market value of Lots immediately prior to and following the loss/damage occurring in the event that permission to rebuild is limited/restricted under an order or regulation.

Loss of Rent/Temporary Accommodation
Provides Lot owner-occupiers and Lot owner investors with a rental equivalent for their premises in the event their Lot is rendered uninhabitable following an insured event as set out in the insurer Policy.

Lot Owners Fixtures & Improvements
Covers the cost of replacing Lot Owners Fixtures and Improvements in their Lot/Unit incurred from time to time provided that the Building Sum Insured amount is exhausted. Replacement of such installations must be following Damage by any Event that is not otherwise excluded under the building section.

Lot Owners Wall Coverings
Cover of Paint and/or wallpaper (wall coverings) internally within a lot following an insured event as set out in the insurer Policy.

Machinery Breakdown
Cover up to the Sum Insured shown in the Schedule against Insured Damage which occurs during the Period of Insurance and requires repair or replacement to lifts, elevators, escalators and inclinators provided they are subject to a current comprehensive maintenance agreement and all other electrical, electronic and mechanical machinery, boilers and pressure vessels and similar plant that forms part of Your Insured Property or its services and provided that the Insured Item is within Your Situation and is in the ordinary course of working at the time the Insured Damage occurs.

Office Bearers Liability
Cover for any claim first made against an Office Bearer in respect of legal liability for any claim made against them. The amount payable in respect of all Claims under this section will not exceed the Limit of Liability shown on the Schedule and is inclusive of the claimant’s costs and expenses and the Defence Costs incurred by the insurer during the currency of any one Period of Insurance. Cover is on a claims made basis and the insurer will respond to claims first made against the insured during the Period of Insurance and notified in writing to the insurer during that Period of Insurance.

Pollution Defence Costs
Provides cover for defending any criminal or regulatory proceedings in respect of any actual or alleged pollution.

Terrorism
Provides cover in the event that your insured property has been damaged as a result of a declared terrorist attack by either the Government or the Insurance Council of Australia (ICA).

Public Liability (Compulsory)
Indemnity up to the Limit of Liability shown in the Schedule if You become legally responsible to pay compensation for Personal Injury or Property Damage resulting from an Occurrence in connection with the ownership of Your Common Area and Your Insured Property that happens during the Period of Insurance and covers the costs of defending a claim in connection with a claim under this Policy.

Voluntary Workers (Compulsory)
A Benefit paid to a Voluntary Worker, or that person’s estate, the event of such Voluntary Worker sustaining a bodily injury during the Period of Insurance whilst voluntarily engaged in work on Your behalf and caused solely and directly by violent, accidental, external and visible means and which, independently of any other cause results in one of the insured events as set out in the insurance policy.

Workers Compensation (Compulsory, if the Owners Corporation engages employees)
The Schedule will show if You are insured for worker’s compensation for employees in the state or territory where Your Insured Property is situated. When You are covered for worker’s compensation for employees cover is provided for all amounts You become legally liable to pay to Your employees under the worker’s compensation legislation in the state or territory in which Your Insured Property is situated.

Your Owners Corporations Insurance Broker plays an important role in the renewal cycle and ongoing insurance management for your scheme. Their services include;

• Supplying insurers with the relevant information and disclosures regarding your scheme
• Obtaining quotations from specialist strata insurers
• Negotiating premiums and other policy benefits for your Owners Corporation
• Providing advice to your Owners Corporation on the best policy options for your scheme
• Processing insurance claims on behalf of your Owners Corporation

Strata Insurance Services is a wholly-owned subsidiary of the Netstrata Group. Unlike other insurance brokers they are completely independent and do not receive commissions from insurers and underwriters, nor do they have any incentive to promote one insurance product over another. This independence means that your Owners Corporation can be assured that they are receiving the most comprehensive and competitive cover that is available in the market.

To further understand the services provided by your insurance as well as a guide to fees, charges and complexities of Strata Insurance, see the guide below.

Section 137B of the Strata Schemes Management Act 2015 was introduced in 2021. This section outlines that no by-law can have the force or effect to unreasonably prohibit the keeping of an animal on a lot.

Despite the introduction of Section 137B, many Owners Corporations have retained their original ‘Keeping of Animals’ By-laws that seek to prohibit the keeping of animals within strata schemes.

In October 2020, the NSW Court of Appeal handed down a landmark decision in Cooper v The Owners – Strata Plan No. 58068 [2020] NSWCA 250, which effectively held that a By-law seeking to prohibit the keeping of animals was harsh, unconscionable and oppressive.

Although the legislation and courts look favourably towards residents keeping animals within strata schemes, it is still important to consult with your managing agent or strata committee before undertaking the keeping of an animal within your lot, particularly regarding the size and type of animal that is intended to be kept. Not all pets are suitable for strata living and the type of pet you desire may still be in breach of the Strata By-laws.

If you are a tenant seeking permission to keep an animal within your lot, apply here. You will also require permission from your landlord.

COVID-19 has not only tested many people’s resilience levels, particularly when it comes to By-law complaints, but with more people regularly working from home following the pandemic we are generally spending more time at home, as such there is more opportunity for complaints to occur.Before lodging a By-law complaint, here are 5 items that you should consider;

1. Have you tried to politely resolve the dispute?Many issues can be resolved quickly and easily by having a quick chat with your neighbour or leaving a polite note outlining what your concerns are and what outcomes you would like.An example is where a resident’s dog might be barking while their owner is away from the apartment. In this scenario the resident may not even be aware the breach is occurring.The key word here is polite. Too often many By-law disputes are escalated rather than resolved because of the tonality and manner in which the grievance is raised.Remember, start with the end in mind. The outcome that you are seeking is for the By-law breach to cease, not to end up in a protracted neighbourhood dispute.
2. Does my complaint only affect my lot?
   Often the Owners Corporation or Strata Committee are asked to become involved in disputes that only involve two residents in the scheme.Section 146 of the Strata Schemes Management Act 2015 requires that a resolution of the Owners Corporation or Strata Committee must be made PRIOR to the committee or Owners Corporation issuing a Notice to Comply with a By-law. This requirement means that it can be many weeks before a decision to issue a Notice to Comply is made and often the breach that has occurred has either been remedied or is no longer relevant.To expedite this process, all residents are at liberty to initiate their own mediation with NSW Fair Trading – see the link here. The Mediators at Fair Trading are trained in dispute resolution and are also familiar with strata legislation and the type of disputes that occur in strata schemes. Often this form of intervention is quick, inexpensive and achieves the outcome that you are seeking.
3. Do I have any evidence of the breach?
   Evidence of a By-law breach is essential. Uncorroborated complaints can be easily and successfully refuted by a defendant.
   Where appropriate, dated photographs of a By-law breach such as parking on common property or drying laundry on balconies can provide irrefutable proof that the By-law breach is occurring and are difficult to deny.Alternatively for other complaints such as a noise complaint, a log of the date, time and brief explanation of the breach can be provided as evidence.Here it is important to recognise that normal day to day activities such as vacuuming, using washing machines, flushing toilets, as well as opening and closing doors do not generally constitute breaches of the Strata By-laws. Similarly, ‘one off’ occurrences of a breach will not end up in a fine or order being issued against a resident. Likewise, complaints surrounding say the hanging of Christmas lights or noise complaints made on New Years eve are generally not supported by the Tribunal.
4. Am I prepared to attend mediation or appear as a witness as a Tribunal Hearing?
   Despite all the best efforts to resolve By-law disputes, regrettably sometimes breaches will continue, and the Owners Corporation or Strata Committee will be required to take action via mediation or the NSW Civil and Administrative Tribunal (N.C.A.T.). Should the dispute reach this level it may be necessary for the parties to be prepared to attend the tribunal as a witness and be prepared to be cross examined regarding their evidence. Understandably this can be confronting for many residents, however without the appropriate evidence and testimony it may be difficult to prove a By-law breach has occurred.

Should you wish to lodge a By-law complaint you may do so by completing this form.

The type of permission required will largely depend on the size and type of alteration to be made. If the alteration is relatively simple, permission may simply be granted by your Strata Manager or Strata Committee. If more complicated, however, it may require a special By-law being passed by the Owners Corporation at a general meeting.

Most strata schemes are registered with a standard By-Law titled ‘Damage to Common Property’. This By-Law prevents an owner from damaging or defacing any structure that forms part of common property, unless prior written approval from the Owners Corporation is obtained. Under the terms of the Damage to Common property by-law, all owners are at liberty to undertake the installation of security screens or locking devices to protect their property, however it is important to check if there are any architectural limitations to security screen designs and that all locking devices adhere to the building code and fire regulations. A licensed locksmith will be able to advise of such regulations.

If you are thinking of undertaking an alteration, addition or renovation to your property, you can make an application here.

Connection to Townhouses and Villas
Because townhouses and villas are constructed separately the Foxtel contractors are usually able to facilitate either an individual connection to each townhouse/villa or a group installation for the complex, depending on the type of connection preferred by the owners.An individual connection is normally preferred because the cost of installation is only borne by those owners wishing to subscribe to the service. The only down side to this is that should every owner subscribe to the service one satellite dish will be fitted to the roof of each property, however the visual impact of the satellite dishes can be reduced if they are fitted in areas that will reduce the same.A group connection can be arranged, whereby one dish or a number of dishes are fitted in various locations throughout the scheme whereby each owner simply connects to the common dish located nearest their property. Here the Owners Corporation will fund the installation of the dishes, however this must be approved by the Owners Corporation at a general meeting via a Special Resolution and due to the costs involved a Special Levy is usually required to fund the installation.Connection to Units
Foxtel currently does not provide individual connections to owners who reside in unit complexes, as such the only connection available is via a group connection to the building.If your building contains 12 units or less and is less than 3 storeys, Foxtel will usually cable your building and provide a satellite dish to the building at no cost, however approval for this type of connection still needs to be ratified by the Owners Corporation via a general meeting.Unfortunately if your strata scheme contains more than 12 units or is more than 3 storeys high, Foxtel will charge your Owners Corporation to provide the infrastructure and satellite dish to facilitate their service. This can only be approved via the Owners Corporation via a general meeting, where a Special Resolution is required. This means that at least 75% of owners that are voting at the meeting, either in person or via proxy, must be in favour of the motion.Again usually due to the costs involved a Special Levy will need to be raised to fund the works. The cost of the connection will vary widely depending on the complexity of the connection to your building.Typically however the costs are around $200 to $500 per unit.

The frequency of the services is determined by you and the other owners within your scheme. This will largely depend on the size, design & style of your property and the annual budget allowance for the same, however a weekly or fortnightly schedule is usually sufficient.

In the event the Owners Corporation are not satisfied by the performance being provided by the cleaning and gardening contractors, their services can usually be terminated at any time and alternative contractors engaged.

Legislation requires that certain appliances in your scheme be placed on a routine or scheduled maintenance program, these include;

• Lifts and escalators
• Common Air-Conditioning plant and equipment
• Fire Safety systems and apparatus

However, there are many other appliances and apparatus in your scheme that would benefit from being placed on a preventative maintenance program, including;

• Common Hot Water Systems
• Garage Basement Detention Pit and Pumps
• Automatic Garage Doors
• Anchor Points
• All common area pedestrian doors, fire escape doors, security gates and exits

Other maintenance programs for your scheme could include;

• Annual Pest Control
• Carpet Cleaning
• Pressure Cleaning of common pathways and building facades
• Window Cleaning
• Annual cleaning and flushing of all common property gutters, drains, downpipes and sewerage pipes
• Re-mulching and fertilising of common area lawns and gardens

The Building Management Committee is made up from representatives from each strata scheme and is responsible for the management and administration of the shared facilities. A Strata Management Statement (SMS) will be registered with the development that outlines how the BMC is to be managed and will provide a breakdown of the shared facilities as well as percentages of the contributions that each strata scheme or stratum lot owner will contribute to the expenses of maintaining and running the shared facilities.

For a comprehensive understanding of Building Management Committees, see our guide below.