As an owner of a unit, apartment or townhouse it’s important to budget for fees that cover the everyday management and upkeep of the building.
No one likes to pay out extra fees unnecessarily, so here are five top recommendations on how you can reduce your body corporate fees, devised by our in-house body corporate experts.
At Ace Body Corporate Management, we know first-hand that the cost of electricity, gas and other household fuels has risen in recent years. Therefore, it’s a great idea for apartment buildings to investigate cutting body corporate fees by being more energy efficient across the board.
There are many initiatives available on the market that can help apartment buildings by:
Reducing water usage
Improving waste management
Increasing energy efficiency
Specialist energy and utility companies can evaluate your buildings energy and water consumption, the building size and complexity and the capacity of body corporate schemes to implement upgrades. It’s always worth asking your utility company what they can do to help, as it may be something they’ve helped accommodate in the past. NABERS for Apartment buildings has recently been launched throughout Australia and enables large strata schemes to benchmark their total property energy use against other similarly sized schemes. While NABERS is currently only practical for large body corporate schemes, it is expected that the tracking of energy efficiency in all strata schemes will become more widely adopted across the industry in the coming years. This will potentially lead to a greater reduction in body corporate fees.
Every year the strata committee and manager budget what they’re going to spend in the coming year and estimate the total cost of outgoings. This is the budget which forms the basis of strata levies (or fees in some states). Most existing body corporate schemes will have a framework to ensure their scheme is properly maintained, including property cleaning, gardening and preventative structural maintenance. As body corporate experts, we can’t emphasise enough how important and necessary it is to budget for routine maintenance that plays a role in property upkeep, and protects the appearance and durability of the building. You don’t want to get caught out over costs you haven’t factored in, as this can be crippling if it spirals out of control. Overall, it could greatly increase your body corporate fees too. Do what you can to mitigate risk and pre-empt any potential problems later. For example, if the common property of a building has a pool and the pool filter isn’t regularly serviced then chances are that it’s going to break down eventually. Regular maintenance will prevent costly emergency repairs which, coupled with last-minute emergency callout fees, can be unnecessarily expensive.
Building insurance for apartment buildings can be one of the most expensive items on any budget line. Insurance covers things like rebuild costs, machinery breakdown, public liability insurance etc. Whilst we would never recommend skimping on your insurance, it’s a good idea to review and compare premiums every year to ensure that they are competitive with the market. Remember, good body corporate management is not about automatically providing premium insurance, but rather fulfilling your duties and being conscientious - while also being efficient, which will lower your body corporate fees long-term. So, it’s worth shopping around or enquiring for the best rates. Regular property maintenance will ensure that building insurance claims are kept to unexpected and rare events, which will determine that the insurance premium is kept at an acceptable level. A body corporate scheme with regular insurance claims will result in sizable premium increases at the next renewal and may place unexpected pressure on the budget. The majority of strata insurance claims emanate from water damage, so it is prudent for a body corporate scheme to adequately service and maintain property pipes, membranes, roofs and other areas of water ingress to prevent strata bill hikes. Lot owners of any kind should be aware of the risk and possible expenses through failing to plan ahead.
4.Regular Onsite Services
This refers to onsite contracted services like lawn maintenance, cleaning, lift servicing, fire and safety testing as well as pool maintenance. Reviewing contracts yearly is a good way to ensure that these service providers remain competitive according to the market. If body corporate owners are unhappy with the service quality of tradespeople on the property, then prior to the next AGM is an opportune time to inform your body corporate manager, so they can potentially organise a suitably qualified replacement, by obtaining quotes prior to the AGM. Remember, reliable tradespeople will typically complete a higher quality or more thorough standard of work. This, in turn, lowers the chances of things going wrong on the property.
5.Sinking fund (or Maintenance Fund)
The money in this fund can be spent on multiple items relating to the property. This can be spent on anticipated capital expenditure, or non-recurring items. In a large strata scheme, this often includes one-off items, such as painting the building or major structural repairs to common property. The sinking fund is often accompanied by a maintenance plan, which dictates where the fund should best be spent and aims to limit major expenditure on repairs that should have been better maintained. In other words, the accompanying plan will help keep your body corporate fees in check and will avoid the inflating expenses often suffered by lot owners who have failed to prepare.
Are you accepting body corporate spending or fee hikes without understanding their basis?
Ace Body Corporate Management has 23+ years’ experience in the Strata industry and is more than happy to provide you with professional advice, in a timely and professional manner. Your dedicated team is always a face-to-face conversation or phone call away, and can also be reached quickly via text or direct email address. The Ace team is formed from a diverse range of professionals with many years experience in senior management roles, who have all chosen to practice in strata title / body corporate management with a keen eye for client services. All Ace managers are actively involved in regular professional development to ensure that they understand the latest regulation changes, codes of conduct, and the most cost-effective methods of operating bodies corporate. We believe the key strengths of Ace managers are their commitment to providing customers with a professional and personal service, and their experience in conflict resolution that achieves a win/win solutions in those difficult situations that arise when people live close to each other. Ace endeavours to maintain industry leadership and is constantly evolving its offering.
Talk to the Experts
Don’t delay, get in touch with the professional team at Ace Body Corporate Management. With over 118 locations right across Australia, a local manager is never far away. As part of our unwavering commitment to our clients, Ace has a local and dedicated manager in every state and territory of Australia who will be glad to assist. Please complete our form to receive a free no obligation quote for the professional management of your strata scheme as we would love to hear from you. Alternatively, get in touch on 1300 792 509 or via the email address email@example.com and we will get back to you.
Disclaimer:This is not advice and should only be referred to for general information purposes. Strata management contracts often vary, so we recommend you contact your local Ace manager for more information, or seek expert legal advice. This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice. Ace Body Corporate Management offers this article to clients to assist in updating them on company and industry news. The content within this newsletter is of a generic nature and may not be applicable to all owners corporations. Ace Body Corporate Management attempts to provide the most up-to-date and accurate information for our clients, however we strongly recommend that individuals and committees seek further advice before acting on any information in this article..