Tips & Tricks for First Strata AGM

Thenarrator on 05/03/2018 - 21:35
Last edited 06/03/2018 - 10:26 by 1 other user

I'm the owner of a new apartment for investment purposes and the first AGM is about to start in a couple of weeks. Asking if you guys have tips, tricks, things to be aware of, things to bring up, things to clarify while I'm there? I'm not sure how it all works.

Some questions I have are:
1) Strata manager sent budget for capital fund ($12k/yr), admin fund ($130k/yr) + special levy fund ($63k/yr). My understanding of special levy fund is that they are like alarm bells that signal somethings not right with building and theres no money in capital fund. Given this is new building and first agm, should owners pay the $63k?
2) Are levy funds refundable?
3) What is difference between strata manager, owners corporation, executive committee & chairman? Whats the purpose of each? Benefit of becomming one if any?
4) Who can chair the AGM?
5) What criteria is required for someone to chair?
6) How is secretary determined?
7) Is secretary service an additional cost? is it a voluntary role?
8) how much is your strata levy per quarter?
9) is AGM our chance to amend bylaws ? if so any bylaws we should have/delete?

Financial

Comments

    • Thenarrator on 05/03/2018 - 22:57

      Thanks, what are your thoughts on becomming a committee? pros and cons?

      • blitz on 06/03/2018 - 00:11

        what are your thoughts on becomming a committee? pros and cons?

        Yep, that's pretty much it.

  • djkelly69 on 05/03/2018 - 22:07
    +3

    Special levy being raised at the first AGM is pretty concerning. Does it state what the purpose is?

    • Thenarrator on 05/03/2018 - 22:23

      No not specifically. It only says "to increase working capital to the administrative fund". I guess a task would be to ask why and the owners can vote against it during first agm?

      • djkelly69 on 05/03/2018 - 22:36

        I would be asking for an explanation of that either before or at the AGM. Sounds like crap to me.

        • Thenarrator on 05/03/2018 - 22:58

          ok i will but what is their motive? if the money just sits in a special levy account and not used, i assume it can be sent back to the owners correct? Why would they suggest special levy fund. What are they trying to pull?

  • loropy9 on 05/03/2018 - 22:33

    You need to read the Strata Management Act if you want to get serious knowledge.

  • monkeybusiness on 05/03/2018 - 22:44

    The special levy is especially silly for a first AGM of a new building. This is usually a big red flag. Instead of asking for 63k special levy why don't they ask for the admin fund to be increased to say maybe 150k and let the balance build up over time?

    Its only a motion anyway so you can discuss in meeting. If enough owners vote against it then it simply won't get passed.

    • Thenarrator on 05/03/2018 - 23:00

      Yes the reasoning is "special levy be imposed in accordance with section 81(4) of strata schemes management act 2015 to increase working capital to the admin fund". Very vague. Does strata benefit from any of this?

      • monkeybusiness on 06/03/2018 - 00:04

        t does. It gives strata more of a cash buffer in case anything goes south in future. Typically what I see get done is that rather than raise a one off large special levies, they raise the normal levies a bit to slowly build that buffer over time instead

      • djkelly69 on 06/03/2018 - 10:09

        If the owners corporation is subsequently faced with other expenses it cannot at once meet from either fund, it must levy on each owner of a lot in the strata scheme a contribution to the administrative fund or capital works fund, determined at a general meeting of the owners corporation, in order to meet the expenses.

        That is s.81(4).

        Sounds like they want extra cash in the admin fund (ie. to pay the normal bills of owners corp) in case bills come in over and above the admin fund levies they have collected at that stage. I would have thought that part of budgeting for the admin fund includes ascertaining when bills will be due and ensuring sufficient admin fund levies have been raised to pay them (front-loading the levies or similar).

        Also the wording of the legislation sounds like such a levy can only be raised when that event actually happens, not preemptively.

    • Meho2026 on 06/03/2018 - 03:39

      I'm pretty sure that a special levy is not able to be counted as a tax deduction like regular admin and capital works (sinking fund) levies. I think a special levy in tax accounting gets added to your cost base so you can only offset it when you sell.
      Much better to vote for increased quarterly levies instead.
      New apartment block developers have a reputation for deliberately setting low levies that can never cover the annual upkeep so they can make the apartments look more appealing and financially viable for investors.

      • Meho2026 on 06/03/2018 - 03:43

        Make sure you get a depreciation schedule to help with your cashflow

  • [Deactivated] on 06/03/2018 - 01:26

    ask for 3 quotes for any building insurance or anything over a set amount so the strata manager or real estate agent hopefully doesn't get any commission.

  • elgrande on 07/03/2018 - 03:03

    You need to officially appoint a "Barry".

    A Barry can be defined as the annoying person in the complex who bullies other residents in the pursuit of stata rule enforcement…

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