The administrative fund is used to cover the regular, ongoing operational costs of a strata scheme. This includes expenses like maintenance of common areas, utilities, cleaning services, and strata management fees.
How is the administrative fund different to the capital works fund?
The Administrative Fund covers day-to-day expenses, while the Capital Works Fund (or Sinking Fund) is for long-term, larger capital expenditures like major repairs or renovations.
Who contributes to the Administrative Fund?
All lot owners in the strata scheme contribute to the fund, typically through regular strata levies.
How are levy amounts for the Administrative Fund determined?
Levies are usually based on the strata scheme’s annual budget for operational expenses, divided among lot owners according to their unit entitlements. This contribution from the owners are then split between the Administrative Fund and the Capital Works Fund.
Can the Administrative Fund be used for major repairs?
No, major repairs and capital improvements are covered by the Capital Works Fund, not the Administrative Fund.
What happens if the Administrative Fund is insufficient?
If the fund is insufficient to cover operational costs, the strata committee may need to levy additional fees or a special assessment to cover the shortfall. This is sometimes known as a special levy.
Is there a legal requirement for the Administrative Fund?
Yes, maintaining an Administrative Fund is a legal requirement for strata schemes under various state and territory legislations in Australia.
How often do I need to pay into the Administrative Fund?
Strata contributions are typically made quarterly in Australia.
Can I opt-out of paying into the Administrative Fund?
Contributions to the Administrative Fund are mandatory for all lot owners as part of their legal obligations under the strata scheme. The refusal to pay into your total strata fees may lead to legal action taken against you from the body corporate.
What happens to my contributions if I sell my property?
Contributions to the Administrative Fund are linked to the property, not the individual owner. When you sell your property, you cannot reclaim these contributions; they remain with the property.
