Question: In our small block of townhouses with limited amenities, our levies have doubled over the past three years. How do we bring the levies back to a reasonable amount?
Our block of 8 townhouses on the Sunshine Coast has no lifts, no pool and only a very small common area. When I purchased the townhouse 3 years ago, the body corporate levies were $3,200 per annum. Levies have now risen to $6,400 per year, which I think is outrageous. I feel that the committee didn’t do a very good job of forecasting expenses in the 10 year plan. How do we bringing the levies back to a reasonable amount?
Answer: Get involved with the body corporate process by joining the committee.
At the AGM, there are motions to approve the admin and sinking fund levies for the next twelve months. Owners can vote yes, no or abstain to those motions, so you are not obliged to accept what has been proposed. However, the budget has usually been established by the committee and the body corporate manager to reflect the needs of the body corporate.
So, if you are voting no, my question to owners is always what do they think would be a suitable budget that the body corporate could pass to ensure it meets all of its obligations. This isn’t an easy question to answer as the obligations are hard to ignore and must be accounted for.
As such, my suggestion to owners who think the levies are too high is to get involved with the body corporate process by joining the committee. From there, you can help review costs and if you find that they can be cut back, institute policies to do this. The review can be line item by line item – get a copy of the budget and expenditure for last year and ask whether the service attributed to each cost is required or optional. Could the service be done by owners instead of paying a professional? Are you paying for contracts that have risen above market value over time? Could these be renegotiated?
Most body corporates are able to make some cuts for items that haven’t been changed for a while simply because no one has asked the question. However, don’t be surprised if it is difficult to significantly reduce the total. You say your costs have risen substantially, but presumably, there must be a reason for this. Perhaps your insurance has increased or works are required around the property. If that’s the case, the higher fees may be needed and possibly mandatory. Talk to the current committee members and see what they say but if there is a rationale for why costs have increased, it may not be a bad thing.
William Marquand Tower Body Corporate E: willmarquand@towerbodycorporate.com.au P: 07 5609 4924