Get ready to elevate your knowledge with Strata Life podcast, the place where you should go to learn and get inspired on all matters strata. Welcome to Strata Life by Rochelle Castro. And today I will be talking about what is the purpose of the Strata community's budget. The, there are three components to a Strata community budget, which is raised at the annual general meeting.

And it's important that you as lot owners attend the annual general meeting so that we could have a say on the budget that's going to be passed in the next 12 months or within the financial year period. So the three components of a strata community budget are the following you've got the administration budget.

You've got the maintenance or sometimes they call sinking fund. Others call it capital works fund budget, and you've got the special levy. So the administration budget is for the daily operations of the strata community. A big chunk of that is the strata insurance, where the premium that would provide for replacement or reinstatement of the building and also the public liability.

The other parts of the administration budget would include the strata manager's fees. It would also include any charges that would have to be paid for the government expenses for repair and maintenance that is, uh, It comes based on circumstances. So once off works, for example, it would also include components such as disbursements or expenses that would be part and parcel of the administration budget.

So that's one part of the strata community budget. The second one is it's got three different terms, depending on which state you are in. Other states call it maintenance fund. Others call it Sinking Fund, the others call it Capital Works Fund. So usually these are for long term maintenance plans. An example of it would be lift replacement works where it's a, uh, requires a large budget and it would take years for the strata community to save money up and to spend for that particular plan.

So really the maintenance a sinking or capital works fund is acting like a bank account or savings account, whether it's part of that bank account. When I mean that, don't misunderstand me. It, it means that it is put as a separate funding that would be spent based on what is planned for long term repair and maintenance.

The third one is a once off levy, which is a special levy, and these are for special projects. It doesn't necessarily have to be relating to repair and maintenance. It could also be for experts expenses. So when there are incidences such as unfortunate building defects or where there is an ex, a special project such as upgrading the common property and, uh, it needs to be raised as, as soon as possible as a once off levy, that would be called a special levy.

Remember what I said, it's important that you attend the annual general meeting to determine and have a voice. In the budget that's raised for the financial year and also the special general meetings that are held. This is the time when those types of meetings are when the special levies are also usually determined.

If you enjoy these sessions, please like, share with family members and friends so that they could also learn and enjoy living in a Strata community. My name is Rochelle Castro here in Strata Life Podcast. See you next time.