Average Australian Mortgage Size in 2023
29 Nov 2023
A body corporate is generally a legal entity that is created when land is subdivided and registered, including apartments, townhouses, duplexes and any other multi-resident lots. As an owner of an apartment, townhouse or duplex, you automatically become a member of the body corporate for that particular complex. This allows you to have a say on any issues that arise in it. Within the body corporate structure, the members usually elect a treasurer, secretary and chairperson, any owner can fill these positions.
Unfortunately, there is no one answer to this question. Body corporate fees largely vary depending on the complex you’re in. It is common for these fees to range anywhere from $1,500 to upwards of $20,000 per year.
In some property complexes, each of the properties are the same size and have the same entitlements to amenities, therefore all owners have an equal responsibility to pay the fees. In this case, the total amount required to manage and maintain the building for each year is calculated by the managing body and is then divided up evenly between the owners.
The total amount that is required to maintain the complex for each year is budgeted and divided up among the owners, as this can change year to year the fees are presented at the annual general meeting. This gives owners the opportunity to agree or disagree with the figure.
If you’re looking to buy an apartment or townhouse, it’s best to check the complex’s ‘strata report’ for the previous years body corporate fees. This will give you an indication of how much you will have to pay in addition to your home loan or mortgage repayments and council rates. It’s important to note that body corporate fees are usually paid monthly or quarterly, when factoring it into your budget.
While you’re there, it would also be wise to glance your eyes over the previous year’s body corporate minutes. You’ll be able to check if there are any upcoming works that look expensive, like replacing a hot water system, or elevator repairs.
There are many factors that can either increase your body corporate fees or decrease them, you can get an indication of which one it might be by having a look at the features of your complex. It might be at the lower end of the scale if its brick and low-set and doesn’t have a pool or a gym.
You may be looking at fees on the other end of the spectrum if you’ve purchased a modern apartment, containing a pool, undercover garage and a gym, then you can most likely expect to pay more.
Other factors that will determine whether you will pay more in body corporate fees include:
When you’re handing over a significant sum of money every week, it’s understandable to want to know exactly where that money is going. Body corporate fees usually go towards several different things.
In the event of structural damage from a natural event as well as public liability insurance. This insurance doesn’t include cover on your personal belongings inside your own property.
For example if a remote-controlled door into a garage needs fixing, a pool pump needs servicing or a light fixture in a common area like the stairway or lobby needs replacing.
Hiring a contract gardener to maintain the exterior of the building and or a cleaner to maintain the cleanliness of the inside common areas and elevators.
In some cases utilities also need to be maintained. If the property is running off only one water meter rather than individual meters for each unit or apartment, the one larger bill might be paid through the body corporate.
A portion of these fees also go towards a ‘sinking fund’, this is a pool of money that is set aside as a safety net. In the event of an unforeseen, large event resulting in major or urgent building repairs, the body corporate can use the money allocated to the sinking fund if it is a larger amount than what’s available in the ‘repairs’ fund.
The legislation regarding additional fees and sinking funds varies depending on the state, so it’s always important to check with your relevant Consumer Affairs or Fair Trading body in your state. Any fees or charges that are required to cover unexpected expenditure like emergency repairs, must generally be approved by a set percentage of lot owners. If this is approved however, you will be required to pay them.
If you are late to pay your body corporate fees, some committees may charge a penalty rate and a lot owner may even lose their right to vote.
There may also be added fees in the following instances:
If you’re looking to buy an apartment or townhouse and wondering which loan is right for you, check out our competitive home loans or chat to one of our lending specialists to help you get into the property market.
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