How is Body corporate fees determined?

What is the factors on how Body corporate fees determined?
Is it location or amenities?

Matt

 

It's originally determined by the your lot's share of the scheme's estimated expenses. In QLD if there is an uneven split then you need to explain why when lodging the community management statement (CMS). It is the You will have a contribution entitlement and an interest entitlement.

 

Wouldn't it just be the costs of maintaining and running the strata property? Why would it be anything else?

EDIT: Oh, if you mean per lot?

 

If it costs 100k p.a. to maintain and keep enough money in a sinking fund and there are 100 units all equal then each unit would pay 1k p.a.

However since all 100 units wouldn't be equal someone might have more interest in the property as they own more space e.g. Penthouse over two floors and as such will pay more fees than the one bedroom unit.

Both amedities will effect the fees as someone needs to pay for the lift maintenance, security, landscaping, insurance, pool maintenance etc etc. The location will also play a part as the council rates will be higher for certain council but also if the complex is on 1 acre and the complex next door that is further away from the water is on 1/2 an acre and everything else is equal then the 1 acre rates will be higher. Plus location could also play a part for cost of trades coming to the property - some cities tradies cost more or if remote might cost even more.

 

There's a Budget done at the annual general meeting.

Annualised costs of
- maintain shared grounds, lawns, driveways
- maintain amenities like lighting, elevators, pools, stairwells, etc
- insurance policy - liability / indemnity for common prop plus building insurance for units
-utility costs - eg lighting or bbqs in common areas
- managing agent fees

Then all of this is the Admin Fund, broken up by unit entitlement (eg 1/6 for 6 identical units, but some groups have different entitlement numbers for say 1 vs 2 bed units) and then a quarter of that paid quarterly by each unit owner.

Most unit groups (compulsory in some states) will also have a Sinking Fund. This is to save up for capital expenditure. Eg $60k external paint job in 3 yrs time, divided by unit entitlement and put that amount in quarterly so that it can get done. Or save up for a rainy day... Say the balcony gantry falls down.

At the next Annual General Meeting (amongst other tasks), financial performance of previous year is reviewed and budget for next year is developed and agreed upon.

 

As an aside, I was handed the financials of a 14 unit group the other day and asked to review to see if my agency could do a better job.

It was appalling. The agency was charging for each quote they arranged, for each quote they proceeded with, passing on all their bank fees, stationery costs , etc. Getting a kickback from insurer and trades. They were going through lots of money.

But also other things like never being reachable by phone or email, never visited to group to see if it was being looked after or if trades had performed jobs, etc. Not sure how to put a dollar value on these things, should be a given IMO.

 

The allocation of the unit entitlement is one of the 'Dark Arts'. The Quantity Surveyors that set them up initially have some weird thoughts on equity sometimes.

 

In my experience, council rates are not part of the BC fees.

Rates Notices are sent direct to the unit owner for payment, not to the BC.

 

Depends on how it was setup, it does not really need to be based on much, I have seen olaces where all paid equally, or where it was on floor area etc, or where it was all over the shop.

A lot also is down to how it is managed and how and who is in control of spending and on what.