Body Corp fees too high ?

We have a 2 bed 2 bath unit Brisbane and every time I quote our body corp/ strata fees, people gasp in horror which isn't great !. Are they really that much higher than other places ? Its a boutique complex of 12, 10 years old with no lifts, pool, gyms and gardens. Our Admin fees are $820/qtr and sink fund fees $375/qtr, - looking at the statements 45% of this goes to onsite caretaker agreement and about 8% to body corporate management fees but no other big items stick out. The sinking funds is sitting over $70k in the black. Does this all sound reasonable ? Are we being ripped off ?

 

That is one large sinking fund, check to see what improvement works or large maintenance bills that the owner's corp are building up for in the meeting minutes.

The onsite caretaker is what is likely costing you is it a holiday rental place?

Are you being ripped off? Well if you are there are currently 12 others (as your vendor is one) who have all agreed to pay those fees.

Maybe they have a huge party once a month and planning on a mega Christmas party

 

Sinking fund sounds good to me, we have a unit in a complex of 12 in Sydney, our sinking fund is 60k, the rule of thumb is 1% of the buildings value... Our fee's are around 800 per Q all up (2 bed unit), but there is no onsite caretaker, just a standard residential building 1970's 3 story walk up. Any time I see a 10-20k sinking fund I get worried, even a basic plumbing fix can be 2-3k for a leaking or blocked pipe in Sydney........

 

Why is there a need for a onsite manager with only 12 units? Is it a holiday rental?

 

No it's 15km from city- actually my bad - don't think he is onsite

 

Well that's what we thought - a healthy sink fund is surely s good thing right ? Worried it might scare off investor buyers if we want to sell

 

The sinking fund balance would attract me.

However I do not like owners corp as I don't have 100% control but it is extremely rare a owners corp is going to be able to rip off owners as the owner can vote to change it. Like all things there is no such thing as a free lunch and you usually get what you pay for. E.g. an owners corp that charges more will generally do more.

 

So that is $1195 per quarter. No offence but it's doesn't look good.

An apartment in melbourne with full gym, heated pool, lifts, daily cleaning of shared surroundings, lift, live in building manager, Security (from 5pm-7am 7 days a week),CCTVs, monthly gardeners, security car park, storage lock up unit, and building insurance cost less than $1195 for a 2 bed 2 bath. Less than 10 years with sinking fund of nearly 250K in the green.

 

Wow, yes, that does sound better. But thats in Melbourne although not sure it would make a difference. Anyone have a similar body corp in Brisbane ?

 

Exactly ! I'm wondering if I should contact the other owners to see how they view it all ! Maybe they know something I don't !

 

technically brisbane should be cheaper. Cost of services and goods are more exp in melbourne

 

If there is 45% of that going to something (you mentioned "onsite caretaker agreement"?) you need to explore further exactly what that is.

 

Can't disagree with that ? Do you know off hand what % the care taking constitutes ? I'm just trying to work out the why here. Can't see any major building works planned

 

That is $4,780 per Unit and multiply by 12, total of $57.3k levy from all Owners, assuming everyone paying equal share.

Using your formula of 45%, the "Manager" gets paid $25.8k. How many hours work per week for the Manager?

Granted smaller complex dont get the economies of scale. But do take an interest in the financials and ask questions. I am sure improvements/savings can be made somewhere.

 

Yeah, when we called up the body corp manager and asked the questions, we just got told it wasn't determined by them and its what the owners agreed to .... not particularly helpful. Ideally should go to a meeting but am in Sydney

 

See if they can tele-conference you in to the meeting.

That's very expensive with no gardens, lifts, pools etc. How much is the insurance? That should be the biggest expense.

Might be time to get some other quotes and chat to the other owners to see their thoughts too.

 

Ask the BC Manager for a copy of the contract? Since I assume the building manager has one with the BC Committee, to provide x services.

 

When did you buy the Unit? You would have some title search documents including body corp records at that time. Sounds like you also need to look at the BCM agreement on top of the Caretaking Agmt.
Anyhow, based on your understanding of the Complex, you would have some basic ideas as to what the basic duties might be??

 

In

Insurance is $6k and electricity $5k. I am def going to see if I can track down the other owners to see their thoughts. Just wanted to see if my concerns are valid