Commonly Used Strata Terms You Probably Should Know
What is the difference between an Admin Fund and a Sinking Fund?
The Administrative Fund is used to pay for day-to-day running expenses of a Strata Scheme. The funds are controlled by the Owners’ Corporation and is used for such things as, cleaning costs, gardening, insurance premiums and excesses, utility bills (including water, electricity, gas etc), minor repairs (such as replacing showerheads, broken tiles etc), running expenses of the Owners’ Corp, strata management fees, auditing and tax return fees, and bank charges.
The Sinking Fund is a large capital expenditure fund that is used for unexpected replacement, repairs and maintenance issues. It is a fund also controlled by the Owners’ Corp. Effectively, it is used for bigger ticket items such as, structural damage to the property, water damage to carpet, and roofing issues etc. Because these issues are unpredictable, it is advisable to have funds in the Sinking Fund lest an unexpected issue were to occur.
By-laws are a set of rules that govern such things as the behaviour of residents and the use of common property. The by-laws apply to all owners and residents of a strata scheme. The by-laws can vary significantly from scheme to scheme and it is important to understand which by-laws apply to your scheme. A copy of your scheme’s by-laws is kept on the strata roll and is available from either the secretary of the owners corporation or from your managing agent (if your scheme has one).
A commonly used acronym for the NSW Civil & Administrative Tribunal. NCAT’s Consumer and Commercial Division can hear and determine disputes about strata and community schemes under the Strata Schemes Management Act 1996 and Community Land Management Act 1989. See also Tribunal and CTTT.
Body Corporate Vs. Owners Corp
These days a body corporate is called an owners corporation. These are formed by the owners of a piece of land that is subdivided into flats, units or apartments to manage, and maintain the common areas everyone uses like the stairwell, car park, or pool.