Planning on buying an apartment soon as a first home, does anyone know if body corporate fee ever decrease or does it either stay the same or increases over time?
What's included in your OC fees? This is usually comprised of: Common Area/Building maintenance Common area water/power/lighting/cleaning Share of water consumption (where not separately metered) Grounds maintenance Scheduled/adhoc maintenance Essential services testing & certification Insurance Strata Management fees Which elements do you want to reduce?
...and where included: Lift repairs and maintenance Fire prevention systems Gym Equipment (this is a biggie) Swimming pool heating, cleaning and maintenance Tennis Court maintenance and booking management The Y-man
Presume when you said "BC Fee" you meant "BC Levy", not BC Management fees charged by Strata Companies? Yes, BC Levies can go up and down anytime, even the frequency can change from twice a year, to three of four times a year. I have lots of experience in reviewing BC Budgets and had many times had their Levies dropped. The Owners were very happy, not that they send any whisky my way. For newer properties, the tendencies is for Levy to increase, partly because it was set very low at the start to attract buyers, or because they didnt know what to expect....
Depends on size of the complex and how much of a role you have on the OC. I currently live in a complex of 4 (PPOR). All owners are hands on and don’t spend unnecessary money. We have lowered our fees as our sinking fund is very healthy, we have switched management (cheaper) and we don’t have big ticket maintenance items (lifts, pool, gym). Also, if something happens, there will be no dramas raising a special levy.
Developer also has the benefit of some initial maintenance contracts being included in the construction contract eg lift, gardens, fire protection so they will increase in the subsequent years.
As per @Scott No Mates Lifts are usually maintained for the first year, so the developer doesn't factor in the ongoing cost (to keep the strata fee's low and make the complex seem more financially appealing like @Pumpkin said) The other one to watch out for is building manager costs The developer appoints a strata manager and somehow a building manager is engaged (this isn't a bad thing for 40+ lots) to sort out any early issue's between the builder and the OC, they generally do a heap of running around early on to ensure access for the nbn guy and liase for builder repairs. The big issue is that if you don't set a specific limit at the First AGM of 6 months it rolls on and on costing $20-50k per annum !!! Then when you try to get rid of them no one wants to, the Strata manager doesn't want them gone because they don't actually manage your building, they just flick everything to the building manager, the committee want the building manager to stay because "It's EASIER" and they don't have to do anything either ! The building manager doesn't want to go because they don't even do 2hrs a week now for their $25,000+ a year !!!
Factors to consider: 1. Insurance premiums almost never go down, they always go up. The Strata insurance policy premium is usually in the top 3 of expense items for a Body Corporate 2. The strata manager/caretaker's remuneration will never go down, but will increase through various mechanisms, so take that into account. 3. The cost of items in the sinking fund forecast taking into account the cost of labour and materials and expertise for items increases as time goes on (inflation if for nothing else), so there is that too. 4. It could safely be said that developers will often set the initial levies lower than they should be but still within tolerance to make it easier for them to sell off the lots off the plan as they look cheaper and more attractive, but in practice, you get to years 3-4-5-6-7 and the BC/OC realizes the error and has to recalculate and amend it all, then all owners get a bit of shock at their new levy rates.
The only time I saw strata levies go down was when, at the AGM, the OC felt threatened by some of the lot owners. The following year special levies had to be raised to cover the shortfall in Admin expenditure.
