So, your investment has strata fees? Read on….
Purchasing an apartment, unit or townhouse can bring the opportunity to live in a property with lower maintenance than a house with minimal to no requirements to maintain yards or other buildings. It can also provide lifestyle amenities such as pools, gyms, and other facilities, however, these also need to be maintained.
In many complexes, this is where strata are employed, for a fee to maintain common areas and ensure that any works that need to be carried out to the complex including the facilities, grounds and buildings are covered and these are communicated with the Owner’s Corporation.
Strata fees are charged by strata companies for the management of accounts relating to strata levies collected for the property as well as the arrangement of any repairs, maintenance and upkeep of the common areas and spaces of the buildings in the complex.
All owners will contribute to the strata levies which are charged out on a quarterly basis and collection is reported to the Body Corporate at regular meetings to ascertain the amount of funds that have been collected from levies. They will then decide on the allocation of these funds to work that needs to be carried out.
Strata fees
Typically, there are several types of strata fees that are charged out in a complex:
Capital work levies or a sinking fund which is collected to pay for the out-of-the-ordinary and more expensive repair items that may need to be carried out. This might include items like upgrading windows, repairs to balconies or updating items in common areas.
Admin levies cover the management of the building expenses that occur on a regular basis such as gardening and landscaping, insurance premiums, smoke alarm and fire testing, cleaning, and any utilities such as gas or electricity.
Special levies are additional levies that are charged if something unexpected needs to be repaired or is required at the property and cannot be covered by the funds in the capital works levies account.
Strata management fees
When employing a strata management company to administer and manage the property on behalf of the body corporate, they will also charge administration fees for their services including the daily management of the property and administration of financial records and reports.
These fees may include a base management fee on the collection of the levies and in some cases, they may also charge a ‘Schedule B’ fee for managing any disbursements that are related to the property and the Body Corporate decisions.
If your property is being used for investment purposes, these fees can also be tax deductible and should be discussed with your tax advisor.
Our Property Management team can also pay these accounts on your behalf from your rental funds as part of your management fee. It is a great idea to ask them how they can help to streamline this task for you.