This is a auto-generated Article of all your definitions within the glossary.
Glossary
This is a auto-generated Article of all your definitions within the glossary.
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Documenting Transactions in the Financials
There is no requirement to put an estimate of the income derived from the Interest Bearing Deposit when preparing a proposed budget. However, a separate expenditure line should be created specific to the IBD, IE Bank Fees. Loans are not income it is a liability. Therefore, it is entered as both an asset and liability into the Administrative account, to cancel each other out. The expenditure should have an adequate descriptor (IE Loan Repayment). For schemes with an annual income of over $100k, it would be prudent to incorporate the cost of an independent audit. CS&S Accounts reconcile any deposits made into the account. The Strata Manager receives the notice from the lender when the interest-bearing term is about to reach maturity. They receive instruction from the Council and advise the Accounts Team.
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ESM’s Fees regarding Strata Company Loans & Interest-Bearing Accounts
ESM Strata provides limited financial advice to its customers. We recommend Strata Companies always keep a healthy working capital. This can vary depending on the Strata Companies funding but generally a minimum should be between 25% of the total budget. ESM charges the Strata Company an hourly fee to set up the account in the first instance of $110 per hour. A Strata Manager is not licensed to prepare BAS or tax documents, so the task is outsourced to a licensed tax agent. Strata Companies must lodge tax returns on income. There may be additional expenses depending on the complexity of preparing the return. The cost of the preparation may exceed the interest earned, effectively meaning there may not be a financial benefit in maintaining an Interest Bearing Account.
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Section 100. Administrative and reserve funds and contributions
100. Administrative and reserve funds and contributions (1) A strata company must — (a) establish a fund (an administrative fund) for administrative expenses that is sufficient in the opinion of the strata company for the control and management of the common property, for the payment of any premiums of insurance and the discharge of any other obligation of the strata company; and (b) determine the amounts to be raised for payment into the administrative fund; and (c) raise amounts so determined by levying contributions on owners of lots — (i) in proportion to the unit entitlements of their respective lots; or (ii) if the scheme by-laws provide for a different basis for levying contributions, in accordance with that basis; and (d) recover from the owner of a lot, by action in a court of competent jurisdiction if necessary, any sum of money expended by the company for repairs or work done by it or at its direction in complying with a notice issued, or order made, under a written law in respect of the lot. (4) Any contribution levied under this section — (a) becomes due and payable to the strata company in accordance with the terms of the decision to make the levy; and (b) if not paid when it becomes due and payable, bears interest on the amount unpaid at the rate of simple interest specified in the regulations, unless the company determines (either generally or in a particular case) that an unpaid contribution bears no interest or interest at a lesser rate; and (c) including interest accrued under paragraph (b), may be recovered as a debt by the strata company in a court of competent jurisdiction and the strata company may agree to a compromise of such a debt. (5) Interest paid or recovered under subsection (4) or (6) forms part of the fund to which the contribution belongs. (6) The owner of a lot is liable in respect of any contribution levied under this section and any interest on the contribution, jointly and severally with any person who was liable to pay that contribution and interest when that owner became the owner of that lot, to pay so much of that contribution and interest as was unpaid when the owner became the owner of that lot.
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section 108
Contact Information An authorised person requests the name and address for all serving Councillors of the Strata Company.
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section 109
Inspection of material An authorised person makes a request to physically view the Strata Company records, or, receive copies of Strata Company records.
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Section 110
Certificates An authorised person (usually a Settlement Agent) requests that the Strata Company provides a specific Certificate, which details the current financial state of the scheme, levy contributions, insurance and bylaws etc. The information required as part of the certificate is furnished by our Settlements Team.
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Section 116. Powers of a strata company generall
116. Powers of strata company generally (1) Without limiting the powers of a strata company to perform its functions, a strata company may — (c) borrow money required by it in the performance of its functions; and (d) secure the repayment of money borrowed by it, and the instrument, or mortgage of unpaid contributions (whether imposed or not), or mortgage of any property owned by it, or by a combination of those means; and (e) invest money in its administrative fund or reserve fund in the manner permitted by law for the investment of trust funds or by the regulations; (2) Any interest received on an investment made under subsection (1) forms part of the fund to which the investment belongs.
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Section 116. Powers of a strata company generally
116. Powers of strata company generally (1) Without limiting the powers of a strata company to perform its functions, a strata company may — (c) borrow money required by it in the performance of its functions; and (d) secure the repayment of money borrowed by it, and the instrument, or mortgage of unpaid contributions (whether imposed or not), or mortgage of any property owned by it, or by a combination of those means; and (e) invest money in its administrative fund or reserve fund in the manner permitted by law for the investment of trust funds or by the regulations; (2) Any interest received on an investment made under subsection (1) forms part of the fund to which the investment belongs.
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Section 118. Common seal and execution of documents
118. Common seal and execution of documents (1) If a strata company has a common seal — (a) the seal may be used only as authorised by ordinary resolution of the strata company; and (b) its use must be attested by the signatures of 2 members of the council of the strata company. (2) A strata company may, by ordinary resolution, authorise any of the following to execute documents on its behalf subject to any conditions or limitations specified in the resolution — (a) a member of the council of the strata company; or (b) members of the council of the strata company acting jointly; or (c) a strata manager of the strata company. (3) A document is duly executed by a strata company if — (a) the common seal of the strata company is applied to it in accordance with this section; or (b) the document is signed on behalf of the strata company by a person or persons in accordance with an authority conferred under this section.
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Section 135. Functions and constitution of councils
135. Functions and constitution of councils (1) The functions of a strata company, subject to this Act and to any restriction imposed or direction given by ordinary resolution, are to be performed by the council of the strata company.
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Strata Improvement Loan (Macquarie Bank
NOTE: ESM banks with Macquarie Bank Ltd. We’ve negotiated reduced banking fees based on the volume of Strata Companies we represent. Get work started quickly with your preferred contractor and stretch the payments out over a longer period with Macquarie's Strata Improvement Loan (SIL). Macquarie has assisted strata plans with funding for: • Major renovations • Unbudgeted items like fire order upgrades or emergency repairs • Energy efficiency upgrades, such as upgrades to lighting or cooling systems to reduce ongoing running costs • New balustrades, window locks or swimming pools that meet the latest safety requirements • Large-scale capital works to enhance the value of the building. Macquarie’s SILs allow owners to carry out work quickly with upfront funding, avoiding potentially costly delays as you wait for funds to be collected. It also reduces the immediate cost burden on owners to fund upfront large-scale works. A SIL can cover multiple works at once to improve cost efficiencies and minimise disruption to residents. Additionally, repayments can be added to your regular strata levy for easier administration. This means you can make building improvements and repairs with confidence – and avoid higher costs in the future if you delay works. Easy to Apply, Easy to Repay All it takes to apply is a resolution by the strata plan to borrow the funds. Once approved the process to receive the funds is quick and easy, outlined on our website here. Use our online loan repayment calculator to estimate the cost of the loan over your desired timeframe, and scale works up or down as you need to. You might find you can borrow more than you thought and can add extra works into your proposal. To find out more about SILs, click here. Why Choose a Strata Improvement Loan? 1. Get work started immediately and avoid costly delays 2. Use your preferred contractor to carry out the works 3. Spread the cost of repairs out over a longer timeframe. Find out today how much you could potentially borrow with our strata improvement loan repayment calculator.
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Strata Scheme Interest Bearing Deposits (IBD’s
NOTE: ESM banks with Macquarie Bank Ltd. We’ve negotiated reduced banking fees based on the volume of Strata Companies we represent. ESM Strata’s financial advice is limited to suggesting ways to fund the budget, and plan for future expenditure. ESM recommends Strata Companies always keep a healthy working capital. This can vary depending on the Strata Companies funding, but generally speaking, a minimum should be between 25%-35% of the total budget. However, there are times where it is worthwhile that the Strata Company considers investing excess funds. Most commonly this would be done with money allocated to their Reserve fund. Strata Company bank accounts, whilst mainly free of transaction fees, do not pay interest. Therefore, some Strata Companies may select to transfer surplus funds into an Interest Bearing Account. Before a Strata Company considers investing these funds there are a few things to consider. If the Strata Company is considering investing in an interest-bearing account, it is generally not worthwhile unless they are investing over $10,000 (due to the interest earned being so low). If the Strata Company wants to invest excess funds, any interest or income will need to be declared to the ATO. A Strata Manager is not licensed to prepare BAS or tax documents, so the task is outsourced to a licensed tax agent. The cost of the preparation may exceed the interest earned on the balance, effectively meaning that there is no net gain to the strata company. The Strata Company also needs to consider when they may require ready access to that money. Therefore, they need to really consider whether they will need to access those funds and invest accordingly to avoid fees (that may be higher than any interest earned). There are few options for Investment that ESM can offer through Macquarie Bank: • At Call investment (where they money be drawn out at any time – lowest interest rate). • Fixed Term Deposit (Where the deposit is locked in and fixed for either 1, 3, 6, or 12 months). Obviously, the longer a term is locked in, the better interest rate and return on investment. Fees will be charged if the scheme needs to draw that money out of the Fixed Term Investment account prior to the date of renewal. Strata Companies may elect to invest excess funds in other banks, bonds, shares etc. However, the Council will need to manage this investment themselves, or pay for a third party to assist them with this process – other than ESM. If a Strata Company chooses this option, they will need to provide us ongoing statements and information for us to record the details in the Strata Company financial records. It is best practice to provide formal notification of the intention to invest by the Strata Company at a general meeting (Annual or Extraordinary) – however the council has the power to do so at a Council meeting. For transparency, we recommend a general meeting. The Council of the Strata Company completes an Authority to Transfer Funds and Open New Accounts form and provides this to the Strata Manager, which is accompanied by a copy of the Authorisation.
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structural alterations
As per the Strata Titles Act: A structural alteration of a lot, means: (a) the erection of a structure within the lot; or (b) an alteration of a structural kind to, or extension of, a structure within the lot. A structure includes anything classified as a structure by the regulations. For the definition of structure; the things classified as a structure are any dwelling, shop, factory, commercial premises, garage, carport, shed or other building or improvement (whether free standing or annexed to or incorporated with any existing building on the lot) — (a) the construction or erection of which is required to be approved by the local government or any other authority; or (b) the area of which is to be taken into account for the purposes of determining the plot ratio restrictions or open space requirements for the lot.
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tenant in common
A tenant in common within in a property owns all the land jointly with all the other lot owners, but they own a proportional share of the land (i.e. they don't own a section).
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unit entitlement
Each lot is allocated units of entitlement which determine an owner’s portion of ownership of common property, their voting rights, and the proportion of levied contributions that are payable in accordance with the levies raised at general meetings.