Frequently asked questions

Frequently Asked Questions

Being part of a Strata Community can be very rewarding, you are part of a safe environment where you get to know who is part of your community. However, Strata can be a confusing world. From the changes in legislation to the terminology that is involved.

At StarBMS we have done the hard work for you and comprised some of our most frequently asked and least understood questions below:

What is a sinking fund?

A Body Corporate’s sinking fund is effectively a deposit which exists to allow a Body Corporate to pay for repairs and maintenance of a building.

The money in a sinking fund can be spent on several different things.  Firstly, it can be spent on anticipated capital expenditure, or non-recurrent items. In a large strata scheme, this often includes large or one-off items, such as painting the building or major structural repairs to common property.  The sinking fund can also be used to replace major capital items in a scheme.  This might include items such as common property fences, or carpets in a lobby.  Sinking funds can then also be spent on any other reasonable expenses which should be reasonably met from capital, such as pool furniture.

The sinking fund is raised through three main avenues:

  • Owners’ contributions to the sinking fund
  • Interest received from the fund’s investments
  • And money from insurance pay outs (for major or capital items which have been destroyed or damaged)
  • The sinking fund levy (owner’s contribution), is often kept and administered by a Community Management company such as SSKB, on behalf of a Body Corporate.

What is a maintenance plan?

A maintenance plan is a report prepared by a professional quantity surveyor to best forecast the maintenance needs for a property over the next ten to fifteen years. It will include information as to the expected lifespan of all equipment and materials and the expected cost of repairs or replacement. The plan should also take into consideration inflation over the coming years.

Once the maintenance plan has projected the amount an owners corporation needs to spend each year over the next ten to fifteen years, the quantity surveyor will then also assess how much income will be required to cover those costs. This will then dictate the levies that your owners corporation needs to raise for its maintenance fund.

What is the role of a facilities manager?

One of the primary roles of the Facilities Manager is to be involved in both strategic planning and day-to-day operations, particularly in relation to buildings and premises. The manager is to ensure a building is compliant and up to date with regulatory standards.

What is a BMS?

The main purpose of a BMS is to identify areas of which the volumetric lots have shared use and provide a tool to manage the reasonable apportionment of costs between all owners.

With decades of experience shaping our established protocols, we understand that each BMS is a unique agreement requiring specialist management from inception through to exceptional financial management and dispute resolution. We ensure that both the person managing the BMS and the representatives of the BMS understand the key elements and budget requirements nominated to avoid potential conflict.

It should be in the interest of any building management or body corporate to maximise income while apportioning correct costs thorough a fair and transparent system that minimises and manages conflict.

We’ve just had a Workplace Health and Safety Report. Are we legally obliged to have the items mentioned in it rectified?

Yes. This has to be attended to so that your community complies with Workplace Health and Safety Regulations and carries out its responsibility of maintaining common property. The WH&S Act requires the committee and body corporate to ensure that the common property is a safe environment. There can be penalties for non-compliance in the case of injuries registered with the Regulator.

It is important to understand the funds and compliance that is involved with living in a strata community to improve the value of your investment. Our many years in the industry has showed us that buildings which are not cared for properly, through a combination of a lack of planning and poor maintenance standards, will loose value. Failure to invest in a maintenance plan can lead to large amounts of money being spent on emergency repairs, as well as the risk of unsupervised contractors carrying out substandard work. This can lead to a rapid decline in the condition and cleanliness of a property, and rectification of these issues is often costly for the body corporate.

Our qualified staff can inspect your premises and consult with you to provide a wide range of advice that is essential for bodies corporate. Click here to improve the value of your investment. If you have any questions regarding your building, give us a call today.

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