What are body corporate fees?
Buying an apartment or unit? You’ll probably be expected to pay body corporate fees. Body corporate fees (or levies) are payable to the body corporate or strata company managing the property, and generally come about each quarter.
They enable the body corporate to take pay for things such as insurance and maintenance of common areas.
What types of body corporate fees exist?
There are two main types of body corporate fees:
- Regular levies, that cover administration, insurance, maintenance, and ongoing costs of communal areas.
- Special levies, that are generally unplanned and can cover unexpected costs, such as major repairs or legal costs.
The exact rules around body corporate fees can vary slightly across different states and territories.
What costs do body corporate fees cover?
Body corporate fees and levies typically fund the following:
- Regular maintenance and upkeep of common areas
- Repairs, as required
- Insurance for buildings and common areas
- Shared utilities (in some cases)
A portion of regular fees are normally contributed to a ‘sinking fund’, which is a pool of money the body corporate can use in the event a large or unforeseen bill pops up.
What costs are not covered by body corporate fees?
Keep in mind body corporate fees are used for the maintenance of shared areas. This means they typically do not cover:
- Contents insurance for your belongings
- Council rates
- Maintenance, repairs, and improvements to your private-use property
- Utilities such as water, gas and electricity
How much do body corporate fees cost?
Body corporate fees can vary widely between properties, so it’s generally a good idea to find out how much your fees are likely to be before committing to purchasing a property. You can ask the seller for details of the fees to give you a rough idea, but remember fees can change significantly from year to year.
You may be able to access the minutes of previous meetings to see how the body corporate has spent its budget in the past, or if any major projects are on the horizon.
How are body corporate fees calculated?
Body corporate fees are calculated by taking into account a number of factors, including:
- The cost of managing and maintaining the property
- The kind of repairs the property might require in the relatively near future
- Administration fees that the strata company or body corporate charges for its services.
The body corporate will present these costs and the proposed budget at the Annual General Meeting (AGM). If a majority of lot owners agree with these figures, the fees payable by each individual owner will then be calculated for the financial year in question.
