When it comes to strata schemes, there are various types to choose from; those consisting of just a few lots to large strata schemes with hundreds of lots. Residential strata schemes can include units, townhouses, multi-storey low, or high-rise buildings as well as villas and duplexes.
In NSW, the NSW strata scheme legislation refers to a ‘large scheme’ as one with over 100 lots, not including parking or utility lots. ‘Other schemes’ are those with less than 100 lots.
At the other end of the scale, two-lot schemes also exist and they have their own challenges and provisions that must be met.
If you run either a two-lot scheme or a large strata scheme, it’s important that you’re aware of the special provisions that must be adhered to. We provide further detail below to help break this down.
Two-lot strata schemes
The special provisions that owners of a two-lot strata scheme must adhere to are as follows:
- The two owners automatically make up the strata committee, so no election is required to vote for committee members.
- Accounts and financial statements for two-lot strata schemes do not need to be audited, unless the annual budget exceeds $250,000, although these can be audited if the owners wish.
- Building insurance is not compulsory - only if the two buildings in the strata scheme are physically detached from one another and there are no other buildings on common property. For this to happen, both owners must decide to forgo insurance cover by unanimous resolution at a meeting. Each owner will then need to obtain their own building insurance.
- No Capital Works Fund – only applies to a two-lot strata scheme where the two buildings are physically detached and there are no additional buildings on common property. This must be decided at a meeting by unanimous resolution.
You can read more about the requirements of a two-lot strata scheme here.
Large strata schemes (over 100 lots)
When it comes to managing larger strata schemes, challenges may arise such as disputes or disagreements due to many more people giving their own opinions. This is where having a professional strata manager responsible for your scheme comes in handy.
There are also special provisions in place for large strata schemes of 101 lots or more. This includes the following:
- The strata committee must be made up of at least three members.
- After a request is made to convene a meeting, it must be held no later than 28 days after the request is made.
- Accounts and financial statements must be audited every year before being presented to the owners at a general meeting.
- Within the annual budget, large schemes must identify the amounts forecast to be spent on specific items in the year ahead before the next AGM for the benefit of members. It should also include any differences between the estimates and the 10-year plan along with the reasons for those differences.
- A minimum of two quotations must be obtained for any expenditure expected to exceed $30,000. This does not include emergencies.
- The Owners Corporation must not exceed the estimated expenditure for any budgeted amount or item by more than 10 per cent, unless authorised to do so by a resolution of owners at a general meeting.
- The Secretary of the strata committee is responsible for giving notice of all strata committee meetings to each lot owner and each strata committee member, at least three days before the meeting. The notice must also be displayed on the communal noticeboard if there is one.
- The minutes of all meetings must be given to any lot owners requesting them within 14 days of the request. For strata committee meetings, the minutes must be given to any lot owners requesting them within 7 days of the request.
- Proxy votes for an Owners Corporation meeting must be provided to the Secretary a minimum of 24 hours before the meeting.
Get in touch
To find out more about the differences between small and large strata schemes, and what you need to be aware of for your specific strata scheme, contact the friendly team at The Strata Collective today.