What strata does in the lead-up to settlement: Behind the scenes
The building contractors aren’t the only ones breaking a sweat to get a development up and running. Behind the scenes, the strata manager works just as hard. You won’t be able to see what they’re up to by peeking over the fence, though. Here’s your behind-the-scenes look at what goes on.
This has been roughly mapped to the ‘stages of construction’ article that takes you through the life stages of a development.
This is the planning stage, when the developer obtains the necessary approvals and meets with the contractors to plan the build. Strata management meets with the developer so that they know what type of complex to budget for.
Site preparation and excavation
While the builders are breaking ground, your strata manager is developing the budget. They prepare a draft two-year budget estimate based on the proposed maintenance schedule, upkeep requirements, overheads and other fees. This takes into account the size of the complex, how many units there are, whether it is residential-only or mixed-use and what lifestyle amenities are on site.
As the build progresses, developers may make changes. These include adding or subtracting units, changing floor plans or adding amenities like a gym or extra parking. All of these changes affect the draft budget. The strata management company stays in close contact with the developer and adjusts the budget as necessary.
The Certificate of Occupancy is issued and certifies that the building is complete and to standard. Visitors may now go on site with permission from the developer.
The strata management company arranges a site meeting between the builder, strata manager and building manager. This is so that they can get familiar with the development, including essential services like garbage disposal.
They will also draft the inaugural minutes so that they’re ready for the first AGM.
Final inspection and paperwork
At the Unit Plan Registration, each property (unit) within the development is given a legal title. Depending on your contract, settlement will take place either ten business days or two full weeks after the Unit Plan Registration.
Individual strata levies are due after settlement and are based on all or some of the following:
- The unit entitlements (usually bigger units will pay a larger proportion)
- Any subsidiaries (if you have a storage cage, balcony or car park, this adds to your entitlement)
- The sale price of your unit
Thus, when the Unit Plan Registration is finalised, the strata management company can finalise the levies payable by each owner.
8 working days before settlement
Within 48 hours of the units plan being registered, your strata manager will:
- Finalise the inaugural minutes
- Arrange for immediate insurance cover and a Certificate of Currency for Insurance to be issued
- Order the Common Seal
- Issue Section 119 Certificates. These detail the strata levies payable, a copy of the body corporate’s insurance certificates and the minutes
- Open a bank account in the name of the owners corporation
1 week before settlement
Within a week of the Units Plan being registered, your strata manager:
- Applies to ACTEW for the transfer of electricity and water accounts to strata management
- Applies to the phone supplier for transfer of lift and fire lines to the owners corporation
- Requests quotes for cleaning and gardening and puts in a temporary service
- Arranges for the ACT Government to install garbage hoppers and recycling bins
- Arranges lift, fire and pool maintenance
- Obtains TFN & ABN
- Obtains quotes for ongoing maintenance of building infrastructure items such as sump pumps & mechanical ventilation
- Obtains details of security/access control supplier and handles client requests for additional keys and swipe cards
Your solicitor liaises with your lender and the developer’s representatives to pay the balance of the sale funds and the title of the property is placed into your name. You can now pick up the keys and move yourself or your new tenant in.
After settlement, the strata manager will get in touch with you, the new owner. You will receive notice of the first AGM as well as the inaugural minutes. You also receive a new owner information pack which tells you the house rules, details of the insurance cover, contact details for your strata manager and facilities manager.
During this very busy period, your strata manager will also be:
- Ordering the initial bins
- Setting up contracts for maintenance and cleaning
- Determining what special privileges and rules need to be put into place, especially around mixed use developments
- Finalising parking arrangements for each owner
- Responding to individual queries
All of this preparation helps the owners corporation run smoothly from the beginning and gives you the best possible start to your strata experience.
The inaugural AGM happens shortly after everyone has settled. At the AGM the strata manager will present:
- The draft budget
- The minutes
- The house rules
- Contracts to appoint the strata manager and/or facilities manager
They will seek approval or amendments from the owners and answer any questions.
From there, strata launches into its general day-to-day activities. We’ve previously published a summary of what strata is and why its important. We’ve also talked about the benefits of being personally involved in your strata.
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