Article: what is a ‘large strata scheme’?

Have you ever dreamed of living in a ‘New York’ style high-rise apartment looking over the alluring lights of  the city? I know I have, particularly after the first episode of Suits where they showed Harvey Specter’s apartment.

However, living in a high-rise residential building is not just about throwing fancy dinner parties to make your friends jealous,  despite your fear of heights. There are  “unsexy ” aspects  too, such as attempting to avoid small talk with your neighbours on your way to work and paying  those “steep” strata fees. So, unless you are committed to living  the extravagant life of Chuck Bass, you might care about how your levies are being spent.

Luckily, there are provisions  in the Strata Schemes Management Act (“Act”) that impose stricter management rules and requirements on large residential buildings that have 100 lots or more (as known as  “large strata schemes”  under the Act).

One of the mandatory requirements is stipulated in section 80B of the Act and clause 14 of the Regulation. The effects of these provisions are that if a large strata scheme proposes an item of expenditure, such as engaging the services of a building manager, the law requires that scheme to obtain at least 2 quotations if the proposed expenditure will exceed $30,000. Note that this does not apply to the seeking of legal advice, legal services or legal action  – we’re dealt with separately by section 80D and Regulation 15.

However, every rule has an exception. In this case, if the expenditure includes the remedy of any of the following, then the rule has no effect:-

  • Burst or blocked water or sewerage pipes;
  • Serious damage caused by fire or storm or any other natural disaster;
  • Unexpected electrical or security system failure;  or
  • Glass breakages that affect the security of any building in the strata scheme or could result in damage to the inside of any building.

This is just one example of how the law treats large strata schemes differently. Another is found in section 80A of the Act, which provides that an executive committee of a large strata scheme must not spend, on any item or matter, an amount greater than that budgeted for by the General Meeting, plus 10 per cent.

So, the next time you dream about living in a beautiful and chic high-rise apartment,  or when you are swirling your glass of red on the balcony of your large building complex, you can smile to yourself knowing that the law does care about how residents in large strata schemes spend their money.

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