These article concerning water meters for apartments and water rates has been provided by Kelly Borell, Tower Body Corporate Administration and Lisa Rutland, mybodycorporate.com.au.
Individual Water Meters for Apartments
We have received an increasing number of enquiries from Gold Coast bodies corporate recently, regarding the possibility of installing individual water meters to their schemes.
Currently, most body corporate schemes built prior to 1st January 2008 have one water meter for the entire complex, which is read by the Council. Council will then issue individual water rates notices to each Lot owner based on the contribution lot entitlements within the scheme.
This means that the owners will pay the same portion of the total bill, regardless of how many people reside in the unit or how much water is consumed.*
Bodies corporate now have the option of installing individual water meters (sub-meters) for each lot and entering into an agreement with Council to have the individual water meters for apartments read and each Lot owner within the scheme billed for their usage. The agreement with Council is based on the following requirements:
- All lots within the scheme must have a sub-meter.
- The sub-meters are installed in compliance with Council’s technical specifications and guidelines.
- The sub-meters are accessible to read.
- The Body Corporate retains ownership and maintenance responsibilities of the sub-meters.
- The Body Corporate accepts liability for water consumption supplied to the common property defined as common property water consumption.
- The Body Corporate accepts the responsibility to either replace the sub-meters every 8 years or to have each sub-meter “verified” in accordance with the Australian Standard.
- The Body Corporate agrees that should the requirements under the agreement not be met, the Council will then revert to the previous system of reading the main meter for the complex and billing the Lot owners based on contribution lot entitlements.
Installing sub-meters in a complex is an advantage to both the owner occupier and owner-investor because:
- As an owner occupier, you are assured that you are only being billed for the water usage that you are actually using.
- As an owner-investor, the water usage component of your council rates notice can be on-charged to the tenant if:
- The rental property is individually metered (or water is delivered by vehicle); and
- The rental property is ‘water efficient’ (see below); and
- The tenancy agreement states the tenant must pay for water consumption.
A property is considered to be water efficient if:
- The internal cold water taps and single mixer taps (excluding bathtub taps and taps for appliances) must have a maximum flow rate of 9 litres per minute.
- All showerheads must have a maximum flow rate of 9 litres per minute.
- All toilets’ dual flush function must not exceed 6.5 litres on full flush and 3.5 litres on half flush, and a maximum average flush volume of 4 litres.
* Please note that as at 1st January 2008, individual meters (sub-metering) was made compulsory for all new schemes.
If you are interested in finding out more about individual water meters for apartments, please send me an email or give me a call to discuss.
Tower Body Corporate Administration
P: 07 5609 4924
This article was first published to the Tower Body Corporate website.
Body Corporate Water and Rates
As with many things, body corporate water rates and water meters for apartments are complicated. Whether your water bill comes from the Council or the body corporate will be determined by whether or not water meters for apartments are installed.
By contrast, your rates bill will definitely come from your local Council, but, it’s calculated in a slightly different way than other properties.
One question I see regularly is “Do I need to pay both rates and body corporate levies?” It’s an excellent question.
The answer is yes, yes you do pay both council rates and body corporate fees.
Body corporate fees are the costs of running your particular body corporate. Levies are paid to the body corporate who then use those funds to on pay the costs.
Rates are local government taxes. All dwellings and blocks of land are taxed individually.
In Queensland council rates for properties are calculated by multiplying the council designated rate times the value of the lot. The rate payable varies depending on the rate category the property falls into.
So, for instance Logan City Council base rate charge by cents in the dollar was 0.3262 (0.003262) for the “residential and other land / owner occupiers” category.
On a valuation of $215,512 the calculation would be:
$215,512 x 0.003262 = $703.00 per annum or $351.50 per half year
So, where does the valuation come from?
The valuations used for rate calculations are the annual land valuations issued by the Department of Natural Resources & Mines (DNRM).
Which is where we hit a snag for body corporates because community title schemes are issued only one land valuation and that is for the body corporate as a whole, yet each lot owner receives a rate bill.
Calculating Rates for Lots in a Community Title Scheme
The body corporate itself does not get charged rates, notwithstanding the fact the body corporate receives the only land valuation for the scheme.
The amount of rates payable by the body corporate as a whole is calculated exactly as set out above. It is not charged to the body corporate though.
Instead, the Council calculate the percentage of the cost each lot owner needs to pay.
To allocate proportions of the scheme’s taxable rate Interest Schedule Lot Entitlements of the body corporate are used.
Lot Entitlements as a Way To Calculate Cost Allocations
Queensland body corporates are registered with Contribution Schedule Lot Entitlements (CSLE) and Interest Schedule Lot Entitlements (ISLE).
CSLE are used to calculate the amount each lot must contribute to the upkeep of the scheme. CSLE are required to be as close to equal as is possible without being inequitable.
By contrast, ISLE can be as varied as the different lots themselves.
ISLE are used to indicate the value of the lot. If the building were to be destroyed completely, the value of any payout would be split amongst lot owners using the ISLE.
Consequently, the rateable amount each lot must pay is calculated using the value of each lot as a proportion of the whole.
Body Corporate Water Rates and Water Meters for Apartments
If you buy a lot in a body corporate you may or may not receive a water bill.
Whether or not you receive a water bill will depend on whether or not your lot has an individual water meter.
Water meters may not be installed during construction.
For the developer, a water meter is an added cost that eats into profit margins which they really like to avoid. Consequently, many body corporates are registered without individual water meters for apartments.
If There Are No Individual Water Meters Installed
Ironically if there are no water meters installed then you will receive a water bill from the local Council and they will be responsible for ensuring you pay. The meter is on the body corporate common property and is read like any other meter.
The Council then splits the water usage cost amongst the lots within the body corporate and bills each separately.
To work out how much each lot owner individually needs to pay the Council uses the Contribution Lot Entitlements of the body corporate.
What that means is regardless of how much water you use, or don’t use for that matter, you will be charged a percentage of everyone’s water usage, including the common property.
With the common property usage, it doesn’t matter. You’d pay the same percentage of those costs anyway, through the body corporate levies.
But you’ll be paying a percentage of everyone else’s use. It’s great if you use a lot of water, not so much if you don’t.
Can Water Meters for Apartemnts Be Installed?
It is certainly possible for the body corporate to install their own meters at their own cost, and many do.
The installation cost is covered by the body corporate if the scheme is a building format plan, or the lot owner if a standard format plan.
The cost can be quite prohibitive.
When Individual Meters Are Installed
Installation is only the first step. Then the meters need to be read.
Unfortunately, this is where the local Council bows out. They will only read the one water meter for the building as a whole, which they continue to do, but now they bill the body corporate directly.
It is up to the body corporate to read the individual water meters for apartments.
It’s also up to the body corporate to pay the water bill to Council, raise invoices to the individual lot owners for their usage and percentage of costs and then chase those lot owners for payment.
Again this regularly recurring cost can be prohibitive.
Finding out your body corporate water rates arrangements is pretty simple: ask the body corporate manager or if self-managed, the Secretary.
I’m not altogether sure how it will help you as a lot owner, but it’s nice to understand how these things work.
This article was first published to the mybodycorpreport.com.au website.
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