Excessive Body Corporate Fees

Hello,

I am concerned that our body corporate management is ripping us off with their admin fees. The townhouse I own is in Brisbane and is a set of 4 with the only real common area being the driveway and a small garden. The lawn is on the footpath and would take approximately 10-20 minutes to mow. They are charging us $6832 ($1708 each) per year in admin fees (inc. insurance). Sinking fund is $5980 but I am not concerned about this. Unfortunately we are 1 ½ years into a 3 year contract?


Numbers I am particular suspicious of include:

Fees & Permits 88.00 Not sure what this could be for?
Insurance - Work Cover 364.80 We do not engage workers and I rang Workcover to confirm this.
Printing Post. & Stationery 469.48!!??
Rep & Maint-Gardens & Grounds 1,468.50
Statutory Return Fees 302.50 - Has anyone every heard of this?


I found out that our Workers Comp policy costs $200. Body Corp Managers charged us $364.80? Does the extra $164.8 just go into BCM pockets? The gardener charges $1320 per year ($110 per month). Body Corp Managers charged us $1,468.50. Is this another $148.50 going to them?
Are they allowed to add on these extra costs on top of their other significant admin fees?

Does $3203 each per year ($1708 in admin) seem outrageous to anyone else?

What are our options here?


Thanks for your assistance in advance

 

How much is your building insurance policy in total?

You'll find this where the bulk of the money is going. Management do take a kick back but they have to disclose how much.

Welcome to the world of strata management. You can start ripping your hair out when ready.

 

Insurance costs us 2,235.10 (not including the unnecessary Workers Comp)

This covers
Building $1,459,710.00
Common Contents $15,192.00
Public Liability $20,000,000.00
Loss of Rent $218,957.00
Catastrophe $437,913.00
Fidelity Guarantee $100,000.00
Voluntary Workers $200,000.00
Office Bearers $1,000,000.00

 

Your insurance bill seems cheap.

Statutory Return Fees $302.50- these are probably tax returns.

All the body corp managers I have dealt with have these "add ons". It seems to be an industry norm.

Looking at your figures I wouldn't be too alarmed. I don't think you are getting ripped off any more than the average lot owner.

If you do the gardening yourself you'll save $1468.50.

You got a small block. Think about running the strata yourself after the contract expires.

If you give the current manager the flick now they probably slug you the fees till end of contract. Have a read of the contract.

 

Not really a direct comparison but I have a townhouse in Canberra - it's in a low maintenance complex and they slug me slightly more than you're paying :-(

Cheers

Jamie

 

Your strata doesn't employ anyone - is your lawn mowing guy a Pty Ltd?, who takes care of your bins? Cleans gutters? Handyman for CP maintenance? These may typically covered by workers compensation insurance.

 

Drive around to some similar blocks and see who manages those. Then obtain a proposal of costs for them manage your block.

You'll soon work out whether if what you are paying is on market or not.

If you end up wanting to change you need most other owners in favour and a legal out to safely exit early or some other arrangement.

Many body corporate managers run rorts on their owners and prey on not being able to be sacked in a hurry and contracts that auto roll over at higher than CPI rates. Just my humble opinion from experience.

At least with land tax there is a level playing field with all other similar properties.

 

Thanks for your feedback everyone.

I don't understand how for example, if workers comp costs $200, they can charge the body corp $364.8?

 

That may be a question you have to put to the strata manager.

At least you have fidelity cover in your policy.

 

I see they've got you covered

Other add-ons over the basic cost of the workers comp might be brokerage, stamp duty and commission.

 

I had a lengthy discussion with WorkCover Qld about this.

They walked me through the ATO questionnaire to determine whether we as a body corporate engage any “employees”.Calculators and tools_Host


It was determined that any gardener or maintenance person we engage would not be considered an employee, and as such we do not require Workers Compensation as we do not pay wages/ have employees.

 

It may also cover voluntary workers eg a resident sweeping paths or tidying the grounds.

 

That should be covered by the Voluntary Workers Insurance $200,000.00

 

Is $25/qtr going to send you bust?

 

If you would be happy to send me $100 every year, then I will send you through my details.

The Workers Comp is just 1 issue I have of many with the Body Corp Manager.

 

Can you hold out for a year and a half then go self-managed?

I live in a self-managed group of four and it works well.

Wouldn't want to do it with more than that though....

 

Yes, I haven't heard any suggestions of possible recourse so this will probably be the way to go thank you.

 

Jon, what do the other owners in the strata plan feel about the performance of the current strata manager?

 

I know that the bloke next to me is quite unhappy about it, but at the same time he is fairly unmotivated to do much about it...