Did you know that in NSW, it is required that the review of allocation of cost schedules registered under the strata management statement must take place by a suitably qualified individual, such as a quantity surveyor, every 5 years?
“A review process to ensure that the allocation of those costs (under Strata Management Statements) remains fair with any such review taking place as soon as practicable after any change in the shared facilities or services (including any change in the use of those shared facilities or services), with at least one such review occurring every 5 years, even if no such change has occurred”
– NSW Strata Schemes Development Act 2015 No 51, Schedule 4 Strata Management Statements
Large buildings with multiple strata plans maintain their shared facilities via the Building Management Committee (BMC). The portion of funds allocated to each strata plan to maintain these facilities can come into dispute if they have been registered by means that do not consider certain variables, such as the practicality of use, and are therefore inaccurate and unfair, with many facilities being missed during initial allocations.
An Allocation of Cost Report reviews the fund allocation percentages registered under the strata management statement with a set of fresh eyes and a more scientific and methodical approach based on current use and merit. This then enables the stakeholders to come to an agreement as to who pays for what and how much. It also enables the addition and rearrangement of facilities to better reflect the actual building and its evolution of running costs.
There are countless reasons as to why regular review of strata management statements are needed:
- Ensure accuracy: Strata management statements contain important information about the management and financial operations of a strata scheme. Regular reviews can help ensure that the information contained in the statement is accurate, up-to-date and reflects the current state of the scheme.
- Identify potential issues: Regular reviews of the strata management statement can help identify potential issues or areas of concern, such as inconsistencies in financial records or outdated information, which can then be addressed before they become bigger problems.
- Compliance: Strata management statements are required to comply with relevant legislation and regulations. Regular reviews can ensure that the statement remains compliant with any changes to legislation or regulations.
- Transparency: Strata management statements provide transparency about the financial and administrative operations of the scheme. Regular reviews can help ensure that this transparency is maintained, which can help build trust and confidence among owners and stakeholders.
- Planning: Regular reviews of the strata management statement can help with planning for the future of the scheme, such as identifying areas where expenditure may need to be increased or decreased, or identifying areas where improvements can be made to the scheme’s management and operations.
The allocation of costs for maintenance, repairs, and insurance in Strata Allocation of Cost Reports can often lead to disputes and disagreements among the parties involved. It is a complex and sensitive issue that requires a deep understanding of both quantity surveying and architecture. At Archi-QS, our team of inhouse architects and quantity surveyors work together to combine these skills to provide a comprehensive and highly informed perspective on every review.
We take pride in our ability to offer a thorough and objective analysis, which helps to minimize conflicts and ensure fairness in cost allocation for all parties involved.
Click here to learn more about our Allocation of Cost Reports.