How much are body corporate fees?

How much do body corporate or strata fees typically cost?

Body corporate or strata fees vary by property, and can cost $2,000 a year or more.

The cost will depend on the type of building. Buildings with elevators and large facilities, for example, will cost more to maintain than a small complex of townhouses with nothing more than a communal car park.

The cost of your body corporate fees are presented in the budget at your owners corporations annual general meeting. Lot owners must vote on the budget, after which the fees are calculated for each strata title.

Fees vary quite a lot between buildings, and are usually charged on a quarterly or per annum basis.

Prior to purchasing, you can request a copy of the previous strata report to see the previous year's body corporate fees. Fees for future years may be higher, but it's a useful benchmark.

What do body corporate fees cover?

Body corporate fees cover all upcoming expenses for the financial year.

Administrative funds: The owners corporation must prepare a budget that estimates expenses like

• Day-to-day administration
• Maintenance
• Repairs
• Strata insurance

Sinking fund: Common expenses like major repair works. The sinking fund grows over time. It isn't necessarily spent every year because most strata properties don't require constant large scale repair works.

Special purpose fund: An extra fee to cover any unexpected large spend, such as an urgent building repair or legal action.

What affects strata fee costs?

There are many factors that impact strata fee costs. The cost of body corporate or strata fees varies depending on a number of factors such as:

• The number of facilities on site that require ongoing maintenance such as a gym, pool or gardens.
• The consideration of the cost of repairs, for example a remote control gate or security swipe entrance can be costly to fix and may result in higher body corporate fees.
• The size and scale of the building, as well as the size of your property.
• The fees charged by the body corporate for their management of the building.

To calculate body corporate fees, the owners corporation estimates future costs and divides this cost over time by the number of units in the strata complex.

According to NSW Fair Trading, an owners corporation could determine that it needs $100,000 over 5 years to cover projected capital works costs, such as maintenance and structural repairs should accidental damage occur. This works out to $20,000 a year over 5 years. If the strata property has 8 units on the title, then this cost would be divided by 8, resulting in a levy of $2,500 per unit per year.

Frequently asked questions about body corporate fees

• Do renters pay body corporate fees?

  No. Renters do not pay body corporate fees. Body corporate fees must be paid for by the owner of the strata title. This means that owner occupiers and property investors who own strata properties have to pay body corporate fees.
  A landlord may factor some of these costs into the monthly rent charged on the property.

• Can the owners of strata properties change their strata management company?

  It is possible. As an individual owner, you cannot change your strata management company. You would need to propose switching to the owners corporation committee to consider changing companies.
  You need to carefully check any existing strata management agreements prior to getting approval from the owners corporation committee. Typically a prospective company submits a tender or proposal, to which the owners corporation committee must review and vote on it prior to onboarding a new strata management company.

• How often are body corporate fees paid?

  Body corporate fees are usually paid quarterly or annually.

Written by

Richard Whitten

Senior Money Editor

Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University. See full bio

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