High Body Corporate Fees

Discussion in 'Property Management' started by wheels, 3rd Jun, 2011.

  1. wheels

    wheels Member

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    Would be interested to know if anyone is struggling with rapidly increasing Body Corporate Fees. Bought a unit in Brisbane in Sep 2008, Body Corp was $600/quarter. Nearly 3 years later it has increased to $1200/quarter. Can owners band together to overthrow a B.C. company or do I just need to suffer in silence?
    :(
     
  2. travelbug

    travelbug Member

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    The owners decide on the BC fees, not the BC company. Did you vote? attend the meetings? put in a proxy? You are an owner.

    Why have the fees gone up? Is it the admin that's gone up or the sinking fund? Maybe there are some high cost expenditures coming up?

    Read the minutes of the meetings if you didn't attend then you'll know why the OWNERS voted to increase the fees.
     
  3. Piston Broke

    Piston Broke Banned

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    There much info in the BC meeting notes, and i believe everybody buying units in large buildings should read all of them going back at least 12 mths.

    Expenses need to be paid and BC fees go up.
    The BC company has the task of making sure that the funds are there for maintenance & repairs.
    Those initially setting up the BC gain by keeping them lower than necessary.
    Sometimes it may take up to 20 for it to catch up.
     
  4. beachgurl

    beachgurl Member

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    Ours were less than $700pq in 2006 and now are over $1300. The AGMs were mainly attended by landlords who wanted cheap strata. Then a few semi retirees moved in and wanted to improve the place and found that both the admin and sinking funds were insufficient.
     
  5. Sez

    Sez Member

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    I've come across this a lot as a PM who is often responsible for paying the owners BC fees from the rent. In a way it has turned out to be a good thing for my landlords because a lot of the maintenance which should be covered by BC previously put off due to a lack of funds are now being done.

    I'm not sure of the procedure in QLD but here in VIC when owners have felt that they are not getting the action from the BC to reflect the fees they are paying Owners have all gotten together and arraneged for a new BC. Doesn't always result in a fee drop, however it can result in you seeing what your money is going to.

    If you're concerned contact your BC and ask about the maintenance which is happening and what your money is going toward. Once they have been able to account for the fee hike you may feel a little better :).
     
  6. damacc

    damacc Member

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    Like the others said have a look at the AGM minutes which has the Admin Fund and Sinking Fund statements set out. You can see what the Income is and what is being spent. Also, see what the cost is for the current Body Corporate Manager.

    Usually in QLD a body corporate term when the units in the complex settle initially is three years. After that some renew for one year, some for two years, some for three years. It's up to the owners at an AGM to change body corporate managers.

    I had a bad body corporate manager for one QLD property. I got onto the committee and then realised that the body corporate manager didn't have a current agreement in place (they were that slack). So prior to the AGM (about 4 months) I contacted several body corporate managers and asked them for management quotes and the AGM wording so I could submit them as motions for the AGM. We were successful and got a new body corporate manager, a much better complex, better tenants (and better rent) and a good committee (I am still on it). Overall, a much better result for everyone.
     
  7. Jamie M

    Jamie M Mortgage Broker - Oz Wide

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    I feel your pain.

    Our first property was $300 per quarter in 2008 and it managed to sneak up to over $600 per quarter in the last invoice. I must admit though, I've never attended an AGM or voted for anything.....in fact, we came home one day to a new colourbond gate which was a nice little surprise....perhaps that's where the extra cash is going.

    Cheers

    Jamie
     
  8. gottabespotless

    gottabespotless Member

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    I couldn't agree more with the OP. It's the reason we will never consider buying another IP in a complex again. Back in the late 90's we made the mistake of choosing to buy an apartment as an IP in inner-city Brisbane that featured a swimming pool, gym, underground parking with security, etc in a brand new complex. At the time, the BC fees weren't too bad but three years later, and with new $5000 couches, $1000 ornamental pots with artificial plants for the foyer area and $2000 treadmills and other overpriced gym equipment that just HAD to be bought :rolleyes: the BC fees were over $1200 per qtr. We eventually sold the place seven years after buying it (for a small profit - should have bought the old Queenslander that needed a bit of work that was for sale at the same time for only $20 000 more - but that's another story...) and bought a house in a cheaper area.

    I should point out that the complex we invested in had quite an unusually high amount of owner-occupiers. As we were from out of town we rarely attended the meetings, but although we still voted, ofcourse, it never seemed to make a difference. I could understand the fees rising rapidly if the place was old and needed maintenance but this complex was new! The decisions and purchases made used to make our blood boil :mad:. - just ridiculous!

    Good luck with the fees. Personally, I'd sell it and buy a house!
     
  9. buzzlightyear

    buzzlightyear Member

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    Wheels there is not enough information or background to make an assessment.

    In broad terms, fees are made up of the management costs of the body corporate managers plus building outgoings and any special levies/sinking fund contributions. The doubling if the fees will come from one of these. I

    You may find increasing costs in BC fees are actually responsible if they are maintaining the buildings in good order and planning for future maintenance or refurbishment.
     
  10. zapoix.

    zapoix. Member

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    BC keep them low to get buyers

    I wonder if the agents keep the BC low to get buyers to buy in not realising that the BC will jump up so much.
    I nearly bought in on a app in south yarra (near station)
    later found out the BC jumped from $1200pa to 3k pa due to having to hire a private guard for residents to be able to axcess the car park at night & the car stacker was faulty all the time. I am thanking mu luckey stars I failed to make the jump into that one
     
  11. buzzlightyear

    buzzlightyear Member

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    Won't be the agents. Initial BC fees will always be lower. Your example is a good one. After warranty period for things lifts, swimming pool heaters, electric gates etc, the maintenance for these items then become incorporated into future budgets. This is far more prevalent in newer complexes with greater level of amenities
     
  12. rosehill

    rosehill Member

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    The high body corporate fee is the only reason I haven't bought a high-rise apartment yet. Does anyone know if there are any apartments in Melbourne CBD not having swimming pools, gym or caretakers but just lifts?
     
  13. nww

    nww Member

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    I viewed a number of units on the weekend in a new area and questioned
    the high strata which the agent couldn't really explain.

    I asked about the hot water service as I could not find any and was told
    the cost for hot water was included in the strata. (Hot water only)
    Hot water located in basement.

    Would be great for a tenant not to have to pay for hot water but not
    the best for an investor.

    Has anyone heard of this before.
     
  14. marg4000

    marg4000 Member

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    Every unit owner gets a copy of the annual financial report from the BC. Read it. If you feel the money is not being spent wisely, get yourself on the committee, attend meetings and vote on issues.

    Body corp fees tend to go up in spurts. Everything hums along, reserves are gradually spent, increases in levies are voted down till it all gets to the point where levies HAVE to rise by a considerable percentage.

    BC fees quoted in OFP projects should be taken with a grain of salt, and at least doubled when considering an investment. In the fine print it will say the amount given is an estimate only, and naturally everything is costed to the minimum to make the proposition appear attractive. Within a few years the levies will find their true level to reflect costs.

    On site managers, pools, gyms and lifts are all expensive and have to be paid for.
    Marg
     
  15. buzzlightyear

    buzzlightyear Member

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    Not quite CBD, but close. 504 Punt Road South Yarra. A friend used to own there. There will be others however
     
  16. gottabespotless

    gottabespotless Member

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    ...and should make any investor who doesn't have a bottomless pit of money run a mile! ;)
     
  17. cadence

    cadence Member

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    my aptmt ip comes with outdoor pool. I've never seen anyone use it and i dont like paying for its maintenance. This is probably a long shot but Has anyone successfully lobbied the strata managers to fill in a pool? Whats the process? The sauna can go too now i think of it. Only want the indoor squash court which should be cheap to maintain.
     
  18. Sez

    Sez Member

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    I think you would have quite some trouble pushing this through as owner occupiers would likely want these things to stay and it may effect the rental amounts for the leased apartments. I've never seen it done but I wish you all the best!
     
  19. Deltaberry

    Deltaberry Member

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    Must be one of those new developments...
     
  20. cadence

    cadence Member

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    built in the 1970s. It has five low rise blocks (three storey walkups with garages on ground floor) each with about 3-6 two br units and a high rise behind them on a hill (six storeys with lift). I think it was originally built as to be 'resort style' holiday aptmts due to being on the water. Over the decades, gradually converted to mostly residential. i did some research the other day and found there are about ten owners who are still renting them as holiday aptmts. So yes they'll no doubt want the pool to be there. I wont bother then. Strata for the high rise is $1200 which i think is too high but for my low rise its about $800 which i can live with for now.