Body Corporate Fees
I've had a few buyers comment that they are put off by a property with high body corporate fees. I've thought about this and would suggest some consideration be given to the following points:
Body Corporate fees are made up of Administration and Sinking Fund levies.
The Administration Fund is there to take care of regular maintenance, insurance, on-site managers, body corporate managers, pool running costs etc.
The Sinking Fund is there to collect funds on a regular basis to cover future, foreseen costs like repainting, re-carpeting, lift servicing, pool equipment replacement, plus sometimes an amount for unforeseen costs.
It's important, when looking at these costs to also note the level of the current Sinking Fund, read together with the minutes of the Body Corporate Meetings to establish what is in the pipeline and what has been spent.
A well-run body corporate will generally have higher fees than one run on a shoestring. What is important to remember, is that the fees are not designed as a profit-centre for anyone. They are there to ensure your property retains its integrity and value, by attending to things in a timely manner, so as not to escalate due to insufficient funds being available. Costs will occur in any event, no matter how high or low the fees. If you don't have forward planning and contingencies in place there may be a need for a Special Levy at some point and then getting everyone to pay a large lump sum will not only be painful, but also can be difficult to collect when needed.
So, in conclusion, if the levies are high, don't dismiss the opportunity outright, and don't assume that if the levies are low, it's a good thing. Look at the facilities, the presentation and functionality of the scheme, as well as the history. There may be very good, short-term reasons for high levies. And what looks on the surface like a bargain, may not be what you think it is.
Written by:
Doug Disher