How Do You Prepare a Strata Budget Without a Manager?

A Detailed Guide for NSW Self-Managed Strata Schemes

Preparing a strata budget is one of the most important responsibilities of an Owners Corporation. Without a strata manager, the process can feel unfamiliar — but when you follow a clear structure, budgeting becomes straightforward, compliant, and predictable. A well-prepared budget keeps your scheme financially healthy, avoids special levies, and ensures you meet your obligations under NSW strata law.

1. Understand the Two Required Funds

Every NSW strata scheme must prepare a budget for two separate funds:

Administrative Fund

Used for everyday running costs of the building. These are recurring and predictable expenses, such as:

• insurance premiums
• electricity and water
• gardening and grounds maintenance
• cleaning
• minor repairs (locks, lighting, doors, plumbing)
• fire safety inspections (AFSS)
• Strata Hub annual reporting
• pest control
• general contractor services

These costs ensure your building remains operational and compliant year-round.

Capital Works Fund

Used for long-term and major expenses, including:

• roof repairs or replacement
• waterproofing (balconies, bathrooms, roof membranes)
• painting and façade upkeep
• window or sliding door replacement
• structural and concrete repairs
• driveway resurfacing

Your Capital Works Fund should reflect the building’s long-term needs and be supported by an up-to-date 10-year Capital Works Plan.

2. Start With Last Year’s Actual Spending

The most reliable starting point is your real financial data. Gather:

• last year’s approved budget
• paid invoices and receipts
• bank statements
• insurance renewal documents
• maintenance or contractor service reports
• any quotes for upcoming works

These documents show what the building actually cost to run — which is often different from the previous budget. This helps you avoid underestimating expenses.

3. List All Expected Expenses for the Year Ahead

Break down your expected expenses into the two required fund categories.

Administrative Fund (annual running costs)

Include everything needed to keep the building operating smoothly:

• insurance premium (usually the largest expense)
• fire compliance (AFSS inspections and coordination)
• electricity for common areas
• water for shared facilities
• cleaning and gardening
• minor repairs and maintenance
• pest control
• Strata Hub submission fee
• emergency repairs
• miscellaneous contractor fees

Capital Works Fund (major long-term projects)

Use your 10-year plan to forecast:

• painting
• membrane repairs
• roof work
• structural rectification
• window replacements
• fencing or retaining wall repairs
• resurfacing works
• lift maintenance (if applicable)

If your scheme does not have a valid Capital Works Plan, it must arrange one — this is a legal requirement in NSW.

4. Add a Contingency Buffer

All self-managed schemes should include a 10–15% contingency in the Administrative Fund.

This protects your scheme against:

• emergency repairs
• unexpected price increases
• storms, leaks, or sudden failures
• rising insurance premiums

Small buildings in particular benefit from this buffer due to limited economies of scale.

5. Calculate Levies Based on Unit Entitlements

Once you finalise both budgets:

1. Add the Admin Fund total
2. Add the Capital Works Fund total
3. Divide the combined amount by the total unit entitlements
4. Multiply by each lot’s unit entitlement

This determines how much each owner pays.

Levies are usually raised quarterly and must be approved at the AGM.

6. Draft the AGM Budget Package

Your final budget must be included in the AGM notice. Prepare:

• Administrative Fund budget
• Capital Works Fund budget
• levy contribution motion
• explanatory notes (e.g., insurance increase, upcoming major works)
• supporting documents (quotes, insurance certificates, maintenance reports)

This budget package forms the financial foundation of your AGM.

Common Mistakes to Avoid

Many self-managed schemes run into issues because they:

• underfund the Capital Works Fund
• forget fire compliance or Strata Hub
• don’t account for insurance increases
• underestimate repair costs
• fail to include a contingency
• rely on an outdated (or missing) Capital Works Plan

Avoiding these mistakes keeps your scheme financially stable.

Final Thoughts

Preparing a strata budget without a manager is absolutely achievable when you follow a structured, methodical approach. A thorough budget protects the building, prevents sudden special levies, and ensures you meet your legal obligations under NSW law. For many committees, the key challenge isn’t the process — it’s having the time and confidence to get it right.

Strata On Demand Can Help

Strata On Demand provides professional support for self-managed schemes across NSW, offering 30+ services designed to simplify your workload, reduce risk, and deliver professional documentation without the cost of a full-service strata manager.

No contracts. No full-service strata manager fees.

Pay only for the services you need, when you need them.

For strata budgeting and financial planning, the five most relevant services we offer are:

1. Budget Preparation

A clear, accurate, AGM-ready budget aligned with your building’s actual needs and upcoming projects.

2. Levy Notice & Arrears Summary Drafting

Professional levy notices once your budget is approved, plus arrears summaries for tracking unpaid contributions.

3. Capital Works Fund Plan Coordination

Coordination of your legally required 10-year Capital Works Plan, ensuring correct long-term forecasting.

4. AGM Agenda Drafting

Includes levy motions, budget motions, and all required legislative items to ensure a compliant AGM.

5. Compliance Health Check

Ensures your budget accurately covers mandatory costs such as AFSS, Strata Hub, insurance, and other statutory obligations.

If your scheme needs help preparing a strata budget or AGM documentation, contact Strata On Demand now.