We recently sent out a survey to all owners in some of our buildings we support with their body corporate management. We received some interesting feedback around management fees and levies and what is the difference between them. We thought this would be a great opportunity to share with you how it works to clarify there is a huge difference.
Body Corporate Levies - Body Corporate levies are typically raised quarterly and collected on behalf of the Body Corporate which is YOU ( Owner of a Lot). The exact amount is usually agreed once a year during the Annual General Meeting. Levies consist of two components, the Administration and Sinking Fund. The funds raised are used for the day-to-day management and operation of your building. Typically, money is also put aside for ongoing maintenance & repairs of the building. It is in the interest of all owners to keep the building well-kept and well-maintained.
Body Corporate Management Fees – This is a small yearly fee that is divided among all owners and paid to your body corporate service provider from your administration fund. Your quarterly Body Corporate levies are not the same as your Body Corporate Management fee. Let me explain in an example below.
Comfort Palms – 15 Lots
Yearly levies you contribute to your body corporate building depending on what was agreed upon with your buildings budget at your AGM. For example, this building has the below levies set out for them for the financial year ahead.
Administration Fund $1,956.68 p.a per lot
Sinking Fund $916.66 p.a per lot
Your yearly Body Corporate Management Fee that you contribute to your service provider (e.g. TCM Strata) works out in this example at $210 per lot equals to approx. $4.00 per week to service your complex with a qualified Body Corporate manager.
What Is A Body Corporate Manager
Body corporate managers are specialist industry professionals who are appointed under a contract to undertake the functions of the executive committee. Their tasks will include:
- Issue and collection of levies
- Maintenance of body corporate records including financial records
- Call and minute body corporate meetings
- Advising on body corporate practices and legislation
- Implementation of motions and committee directives
The term body corporate manager refers to both a qualified industry professional and the company or firm that employs that manager.
A Body Corporate Manager is expected to have a solid grounding in legislation, industry practices and property management. In larger Body Corporate companies like us you will find that they will have a dedicated finance team to manage financial affairs of body corporates.
We find that owners get confused between the two and we are here to help by sharing knowledge and information with all unit owners to unpuzzle some of the misconceptions of this industry.
For any body corporate related questions, please do not hesitate to contact TCMStrata on (07) 4031 7877 or visit tcmstrata.com