Body Corporate Fees

About Owners Corporation or Body Corporate Fees in Victoria

If you happen to be an individual apartment or townhouse owner, or a lot owner under any strata title scheme, or are planning to purchase property under a strata title, you will also become liable to pay certain fees towards your body corporate or owner’s corporation, for managing the shared areas of your property, including insurance and the upkeep of common areas. This is termed as owners corporation, or body corporate, fees or levies.

As we get many questions around this topic, we have decided to share all the key information that you might need to know about the typical body corporate fees in Melbourne and other areas of Victoria.  Please note that the rules around body corporate fees can vary from state to state, so you should confirm the local requirements with the appropriate government body.  The strata industry association, Strata Community Australia or SCA, is another good source of information and has state-specific information available from their website, https://www.strata.community/.  For Victoria, SCA (VIC) has some useful information for owners at https://www.vic.strata.community/vic-owners-information.

The information below relates specifically to Victoria and is provided to assist you in budgeting for owners corporation fees in advance.

The two main types of owners corporation fees

The Consumer Affairs Victoria website mentions two types of body corporate fees, in practice within Melbourne and other locations in Victoria:

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    • Annual Administration Fund Fees

    These are the regular annual charges that need to be paid to your owners corporation to allow it to carry out its function to manage and maintain the common property.  This includes shared utilities, maintenance and repair of shared areas, insurance and administration.  Fees are based on each lot’s units of liability, (i.e. their share of the common property usually determined by the size of their unit, or lot, in comparison to the size of all other units.

    Every year, the owners corporation manager will prepare a budget to cover all expected administration expenses, and the budget agreed to and adopted by owners at each Annual General Meeting.

    • Maintenance Fund Fees

    Often referred to as sinking fund levies, the funds generated from this fee are used for longer-term maintenance.  Collecting an annual maintenance levy allows the owners corporation to accumulate funds for major works to be done at a pre-determined time in the future.  An example is the replacement of the lifts in a building which, typically, have a lifespan of 20 to 25 years.  Replacement of the lifts in even a medium size tower will cost several hundred thousand dollars.  In larger buildings, the cost could add up to millions of dollars.

    • Special Fees

    Apart from the regular annual fees, there is also a provision to allow raising of special levies to take care of unplanned or emergency costs, like sudden repair work, legal costs and even for improvement work like upgrading of a security intercom system.  These may also be raised if there are insufficient funds remaining in the administration or maintenance fund to cover unexpected costs.

    As you will agree, these are necessary allocations to be able to maintain the property well.  Having a reputable and experienced owners corporation manager will ensure the best utilization of these funds.

    Having said this, it is also important to know that these fees are only used to cover costs related to shared areas and utilities, and cannot be used for any maintenance, repair or improvement of your private lot or personal property or belongings. Please also be aware that the strata insurance paid for as part of your owners corporation fees does not cover the public liability or contents insurance within your private lot.  It is best to check with your owners corporation about which costs are covered and not covered, before you make your property purchase.

    How are apartment body corporate fees calculated?

    There are a number of factors that are considered before calculating the average body corporate fees. These can include the condition, size and structure of the strata scheme.

    • Older properties might attract higher annual levies on account of an increased need for regular repairs. How much you pay will also depend on the facilities offered to owners by the owners corporation, such as lifts, pools, gymnasiums, BBQ areas, gardens and parking areas which require regular upkeep.
    • Apart from these, body corporate fees would also be based on the size of the individual property, as decided by the units of liability for each lot at the time of plot subdivision. So those with larger property holdings will usually pay higher annual fees.
    • The management charges by your owners corporation manager would also be a component of your fees. Also, if your body corporate is registered for GST, then this would also impact the body corporate fees, with additional GST charges.

    Consumer Affairs Victoria also urges owners to be aware of some extra fees in the event that they require copies of older records from the body corporate, or if you require an owners corporation certificate at the time of selling off your property.

    So in a nutshell, owners corporation fees can have a huge variance between different properties and can also change from year to year, and it makes sense to budget for these fees before committing to a purchase.

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