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www.mystrata.com.au mystrata Pty Ltd . ACN 096 289 253 . Level 1, 671 Gympie Road . PO Box 322 . CHERMSIDE QLD 4032 . Tel. 1300 550 515 . Fax. +61 7 3036 6143 An Introduction to Body Corporate Levies Body corporate levies can just seem like an extra bill that you really don’t need when buying a property, especially if you’re a first home buyer! However it’s not as expensive as it may first look and is an important part of buying a unit or townhouse. What are body corporate fees? Each year unit owners need to pay for all sorts of things, just like a house owner. The only difference is the unit owner has the advantage of sharing the cost with their neighbours! For example, in one year a standard block of townhouses could expect to pay for: • Building insurance • Lawn mowing • Gardening services • Tree pruning • Pressure cleaning • Minor maintenance (damaged gutters or fence repairs etc) If I were to buy a house I wouldn’t need to pay as much! Owners of houses still need to pay for these items. Let’s see what the above items would cost someone who owned a house over a year: Building insurance $550.00 $300,000 replacement value Lawn mowing $480.00 $40 per month average Gardening services $0.00 Nothing! I’ll do it myself! Tree pruning $220.00 One tree over a driveway Pressure cleaning $250.00 External house clean Minor maintenance $300.00 Plumber to repair a gutter at $150 per hour Total $1,800.00 My body corporate fees are more than that... Every body corporate also has a savings account called a “Sinking Fund”. Each year part of your levy fees are paid in to the savings account to be used for a costly repair (such as structural building repairs) or an expensive upgrade (like painting the building). Like any savings account, it is important that everyone INNOVATION AND KNOWLEDGE FOR COMMUNITIES continue to put money in to the sinking fund so that if an expensive repair is required it can be carried out immediately without further expense to the owners. Unit owners have a big advantage over house owners in these circumstances as they get to share the cost between all the owners in the complex and they have access to years worth of savings! Why do some unit complexes have very low body corporate fees? The amount of money charged to each owner each year is determined by a group of owners in the building called a “committee”. If a committee decides not to raise much money for the year then the body corporate fees will be low. However, be aware that if a body corporate does not charge enough to cover its costs it will need to dip in to its savings. It is never good to dip in to savings, especially in a body corporate! If a major repair is required and there is not enough money to cover it the owners will have to pay for it in a lump sum. Also units in buildings with plenty of money in their sinking fund are often valued higher than an equivalent unit with less money. When it comes to body corporate levies less is not more! How do I find out more about a building I intend to buy in? Your real estate agent should be able to provide you with a “disclosure statement”, however that only has basic information on how much you will be required to pay each year. In order to find out some more detail such as insurance, budget and bank balances you will need to do a “body corporate search” though a search agency such as “Purchasers Strata Inspections”. See their website for more info www.strata.com.au Where can I find out more general information about bodies corporate? The Mystrata website has lots of information on living in a strata (body corporate) building and an online forum that allows you to talk to body corporate managers, insurance companies, strata solicitors and other owners! Best of all, its free to use! Check it out at www.mystrata.com.au INNOVATION AND KNOWLEDGE FOR COMMUNITIES
"INNOVATION AND KNOWLEDGE FOR COMMUNITIES - Mystrata"