Body corporate fees
Body corporate levies are an inevitable part of strata living, and are a great way to ensure that all necessary maintenance and upkeep can be carried out on the property without the owners having to do any of the work themselves. If something goes wrong when you are living in a standalone house, you would naturally be responsible for either fixing it yourself or hiring someone else to do so. Body corporate fees allow for a professional to be hired to repair, maintain, replace or perform upkeep duties on the property, so that the owners can enjoy the benefits of maintenance-free living. Body corporate levies create a common pool of funds that can be used to pay for all necessary short-term and long-term building expenses.
Body corporate fees cover expenses such as:
- Maintaining common property and assets (for example, garden maintenance, pool cleaning)
- Expenses which recur regularly (for example, bank fees, pest control, cost of hiring body corporate manager)
- Insurance premiums
- Long-term or major building costs (for example, replacing the roof, repainting the building)
They are a great way to ensure the building stays in great shape, is always well maintained and meets safety regulations.
What influences the cost of body corporate levies?
There is no standard fee for body corporate levies – you can expect to pay a different fee for each different body corporate building. The body corporate fees are set by each body corporate and are calculated based upon the costs of running the building, which, understandably, differ widely from one building to another. Body corporate levies will vary depending on factors such as:
- The size and location of the building
- The design and construction of the building
- The age and condition of the building
- The facilities included in the building
- The services provided by paid professionals
- The size of your individual lot
Do body corporate fees increase over time?
The short answer – yes, they do. And they should.
It may seem as if body corporate fees take a lot of your spare cash, but at least you know what you’re paying year to year, right?. In fact, body corporate fees will usually increase a little every year, so you’ll need to factor these regular increases into your budget.
But why should they increase when it doesn’t seem like you are getting anything more for your money? Well, there are very good reasons for this.
Like anything else, a body corporate is affected by the increase of consumer prices that regularly occurs. The cost of goods and services inevitably increases over time, meaning that body corporate fees will need to increase accordingly to ensure that the body corporate can meet its commitments.
Where this most frequently occurs in strata living is in the cost of professional fees. Bodies corporate hire a large number of professionals to carry out management and maintenance work (such as gardeners or body corporate managers), and these contractors automatically increase their fees from year to year. This increase in fees (even if they are providing the same level of service) means that body corporate levies will also have to increase. Insurance premiums also generally increase from year to year too, also leading to an increase in the cost of levies. However, keep in mind that wages usually increase as well, so the effect may not be as marked as you might fear.
What it comes down to though, is that body corporate fees are in the best interests of every lot owner, both financially and in terms of the building. Yes, the fees will increase over time, but they provide a great range of benefits for owners, and are a great investment in the quality and longevity of your building.