Body corporate fees are payable by every member of a body corporate. A body corporate is a legal entity or structure that is created when land is subdivided and registered. Upon this land, multiple dwellings are built, such as an apartment building, with the land collectively owned by all purchasers.
When you purchase an apartment that is held within a body corporate, while you own the apartment itself, you only hold a share in the common property and amenities. The body corporate fees, which are generally proportioned to the size of the apartment you own, are pooled with those of other residents and used for maintenance of the shared assets. You can expect that a property with multiple common areas and amenities such as pools, elevators, gardens, and gyms will have higher fees than one which does not. The location of the property itself also plays a role, as does the property age, size, and number of dwellings it has.
What Do Body Corporate Fees Pay For?
There are multiple services that your body corporate fees may encompass, including:
- Building manager fees – many body corporates will have a paid building manager who is responsible for liaising with owners and organising maintenance and other directives received from the body corporate committee. As well as wages, some body corporates offer their building manager onsite accommodation as part of their remuneration package too.
- Upkeep and cleaning of common areas such as the lobby, gardens, and swimming pools – the maintenance and cleaning of all common areas are covered, ensuring that they are always presented to a high standard and can be enjoyed by all.
- Insurance which covers the building and associated facilities – while you are responsible for the insurance of your apartment and belongings, the fees you pay will cover damage and repairs to the buildings and common areas and possible liability and employee coverage.
- Compliance with local regulations for building and infrastructure safety – safety inspections and reports, fire alarm testing, electrical certification and other testing requirements for the building and common areas are completed on your behalf. Any certifications from local authorities will also be obtained and kept valid.
- Future sinking fund for additional maintenance and renovations – as a building ages, there is a need to plan for the additional costs for repairs and updates that will be required. A sinking fund is often created with part of your fees being added to it.
- Security and caretaker fees – the body corporate will engage the services of professionals to assist them in meeting their requirements towards property maintenance. They may also employ people to provide services to residents, such as a concierge and security.
- Special levy – some body corporates require payment of a special levy which may be included within your fees or an additional cost. A special levy may be collected due to unexpected damage or required maintenance to a part of the property or to cover any legal costs.
It is important to realise that like almost everything, body corporate fees are almost certain to rise over time. You will also be required to follow the body corporate regulations and rules as to what you can and cannot do, and you should receive voting rights when it comes to major property decisions. As for living in the property or renting it out, with so many tasks being undertaken on your behalf, what will you do with all of your free time?