A Community is determined as a group of living things sharing an environment, normally with shared interests and sometimes, shared beliefs and needs.
The current legislation provides the Strata Company to manage and control the Common Property (Community) areas for the good of all proprietors. For this management to be fulfilled the Strata Company raises funds via levies to meet all of the outgoing costs for the Strata Company, and then raises additional Reserve or Sinking Fund levies to pay for the costs of the longer term capital expenses such as painting, lift replacements, major plumbing or electrical compliance requirement, etc.
The new reform will provide the Strata Company the authority to carry out reporting to better forecast their upcoming expenditure for both the short and long term. The new reform will require Strata Companies, consisting of more than 10 lots, or where their insurance replacement costs are very high (to be determined), to put the following into place:
- have a reserve fund. (The Act will not specify how much money needs to be held in a reserve fund).
- prepare a 10 year maintenance plan setting out:
- the maintenance, repairs and renewal or replacement of common property in the scheme and the personal property of the strata company likely to be needed over the next ten years, and
- the estimated cost for the maintenance, repairs and renewal or replacement.
The 10 year plan must be revised at least every 5 years, and when revised must cover the next 10 years.