Question: As a new Body Corp Committee member, I am trying to save money for the complex and I feel our levies are too high. Is there any way to compare Body Corporate schemes to get an idea of average levies?
I’m a new lot owner and have joined the Body Corp Committee. I am trying to save money for the complex and I feel we are paying too much towards the administrative fund.
We pay over $33,000 annually for 17 townhouses. We also pay $11,300 annually into the sinking fund. We have an outdoor swimming pool, otherwise, all other costs are general maintenance fees.
Are these reasonable body corp fees for a body corporate of our size? Is there any way to compare Body Corporate schemes to get an idea of average levies? Are we able to compare Body Corporate Management Companies?
Answer: Comparing costs between body corporate schemes can be very difficult as the structure of the buildings, the history of investment and the people running them can be very different.
Comparing costs between body corporate schemes can be very difficult as the structure of the buildings, the history of investment and the people running them can be very different. As an example, I once managed two neighbouring schemes that were of approximately the same age and design. One had a history of mostly being cared for by owners down the years with ongoing investment into the building while the other was somewhat neglected. Owners in the well cared for building had paid higher levies, but the building was in good condition with money in the account and no major issues. Owners at the other site had paid lower levies over time, but the building was shabby with no money in the bank and some major costs around the corner. Owners in the past may have enjoyed lower costs but the owners today were left facing major bills.
This is just a long winded way of saying that while it is quite easy to say that costs are too high, judgement needs to be made judiciously.
To understand your costs better you need to look at all expenses for your site over the past couple of years as well as current and past budgets. Get an understanding of what your expenses are and whether they are necessary or not. Your body corporate manager should be able to provide you with full financial information for your plan and it may be worth having a meeting with them to discuss and review expenses. On an ongoing basis, all invoices should be reviewed and approved by the treasurer and other committee members as required. At Tower, our customers can approve all invoices online and this helps offer them an understanding of ongoing payments as well as their ability to take control as required.
Who sets the body corporate fees?
You’ve also asked if there is a way to compare body corporate companies? The answer here is in two parts. If you are looking at the annual cost of engaging a body corporate manager, then yes. If you are unhappy with your current agency, other companies will provide quotes for you so you can compare the costs of their service. However, if you are talking about the budget as a whole it is important to know that this is not determined by the body corporate company but by the owners.
Typically, the body corporate company will provide the committee with a draft budget that will cover your ongoing expenses and allow for savings so major expenses can be met as they arise. This is a proposal only though and the final budget is determined by the Committee and voted on by owners at the annual general meeting. As such, you are in control and if other owners agree, it should be possible to adjust costs accordingly.
This post appears in the June 2021 edition of The QLD Strata Magazine.
William Marquand Tower Body Corporate E: willmarquand@towerbodycorporate.com.au P: 07 5609 4924