How Much Do You Pay for Strata?

• 

  EightImmortals on 30/12/2018 - 10:19

  +9

  Dude that's over 3K a year? srsly?
  Some of the best real-estate advice I ever got was to not go annoyware near a property that has a body corp and strata-title.

  • 

    pantsparty on 30/12/2018 - 10:27

    +4

    Good advice if you can afford to buy a house - unattainable for many people in the expensive cities

    • 

      dcep on 30/12/2018 - 16:22

      Agreed.

      Only works in regional / Perth.

      Sydney, Melbourne, or even Brisbane , you would've to get a big loan, or buy 60kms away, or bikies neighborhood

  • 

    magikz on 30/12/2018 - 10:40

    Yea man seriously. What do you think my options are? Vote the body corporate out? Have them audited?

    • 

      Baghern on 30/12/2018 - 12:38

      +1

      How do you know the body corporate fked up?

      You've given us hardly any information.

      The most important part the split between general and sinking… why the need for 30% increase.

      If the building has issues that need to be fixed, thats not their fault

      My friend has fked up body corporate, they're paying $250 per quarter, but the entire place is falling apart, there is zero dollars in the sinking fund. They probably all need to pay around $15k each to repair the building due to the lack o maintenance

      • 

        magikz on 30/12/2018 - 14:56

        Yea I didn't say they (profanity) up, just that I find their rates expensive

        • 

          dcep on 30/12/2018 - 16:19

          @magikz: if large portion goes to sinking fund and you're planning to live there for long tern then still ok.

          else, that's $$ goes down the drain.

        • 

          SirFlibbled on 04/01/2019 - 15:50

          @magikz: You should receive the budget as part of the AGM paper work. It would outline why it's gone up.

• 

  [Deactivated] on 30/12/2018 - 10:23

  Do you have council rates as well?

  I've never lived in strata hence possible dumb question.

  • 

    magikz on 30/12/2018 - 10:39

    +4

    Yep I pay Council rates separately. I pay $283 per quarter there. The only dumb questions are the ones left unasked :)

• 

  Ocker on 30/12/2018 - 10:35

  Given there is no lift or pool then I feel the amount charged in total, viz. $41.280 for 12 units is totally OTT.

  That's a lot of money for general maintenance such as painting and gardening, and insurance.

  • 

    KMeister on 30/12/2018 - 10:38

    and to pay the manager's salary

  • 

    magikz on 30/12/2018 - 10:44

    Thanks, I've always suspected I've been overpaying but when you have nothing to compare to it's difficult to really know.

  • 

    SnoozeAndLose on 30/12/2018 - 10:50

    +1

    Agents should pay around $500-$1000+ schedule B per month for the small complex like your.

    I suggest get into the committee to get to know the spending or you could inspect the record and see what cost the most.

  • 

    CheapSticks on 30/12/2018 - 17:19

    Don't forget the $8xx that OP quoted also includes sinking fund. I suppose about $300 of $8xx is going into that. Looking from that perspective it is probably not too expensive.

    • 

      Ocker on 04/01/2019 - 19:32

      Where does the OP post state part of the quarterlies go into a sinking fund?

  • 

    SirFlibbled on 04/01/2019 - 15:54

    Not really. I pay about $780 a quarter and have none of those things in a 17 unit complex.

    The reason for it is that we are new (4th year) and still building our sinking fund (which we already had to dip into) but at the same time, trying to properly maintain the complex. This includes gardeners replacing dead plants, cleaning spiderwebs from various places, having the underground carpark cleaned annually, gutter clearing etc. It all adds up.

    Every line item is considered and budgeted for. We meetings which can go for 5 hours trying to set the budget. I don't enjoy it but it needs to be done properly.

• 

  MrHyde on 30/12/2018 - 10:40

  How old is the apartment.

  I've been told that once building warranty expires, the strata fees go up as things that could be fixed through warranty now need to be paid for by the owners…. Hence new buildings normally have low strata fees… Some are even subsidised by the builder to keep the building attractive.

  PS: I pay 1100 a quarter for a 25 year old apartment with 180 units, swimming pool, sauna, tennis court, spa, common Barbie area, etc.

  • 

    magikz on 30/12/2018 - 10:43

    I'm not sure how old, but if I was to guess it would probably be over 25 years old. $1100 for those kind of facilities is not bad I guess. For me I would just like to get value out of what we're paying for.

    • 

      EightImmortals on 30/12/2018 - 11:11

      Well that have to have a record of expenditure, ask them for it and if there are things there that seem OTT then round up some of the other tenants and make a case.

• 

  saimone on 30/12/2018 - 11:41

  +1

  2 bedroom in Ashfield Sydney $500. Used to be $750 many years ago.

  • 

    skid on 30/12/2018 - 12:25

    Do you know how it was reduced? Was it via the AGM and voted? Was there a reason for the rise/fall?

    Mine jumped 10% this year; no reason given.

• 

  Cheeper on 30/12/2018 - 12:34

  Being over 25 yrs old there may be major work needed and in past years the levy has been too low to build up a fund to cover it? Just a guess.
  Unit owners normally get statements every 3 mths AFAIK. If you don't have them then you have a right to see them. Anything odd in there should be questioned… excessive payments to preferred tradesmen or grounds maintenance is not unusual as some strata managers like their kick back benefit $$$.
  Are the issues that they have cited capable of being covered by what is in the sinking fund now?
  Small blocks of units, say 4 or less, are far better off being managed by someone appointed from the residents. Renumeration to that person would be warranted of course. What is involved is nothing difficult unless there are obstructive or unco-operative owners.

• 

  Baghern on 30/12/2018 - 12:36

  useless to ask everyone as location makes a significant difference.

  $800 sounds like a lot for your situation

  But then you havent told us the split between the admin and sinking part. We dont know the land size to understand insurance/maintenance cost

  99% of the response here will be useless to you.

  You said your block need repairs, you can't compare that with someone who doesnt need repair

• 

  luffyex2010 on 30/12/2018 - 13:21

  If your finance changes for the better….
  Land is best.

• 

  c0balt on 30/12/2018 - 14:08

  1bdr in Melbourne paying $850/quarter but we do have lifts, underground car park, indoor swimming pool, gym, uncapped gas hot water inside apartments, bit of heating/cooling and concierge at the front desk during business hours.

• 

  [Deactivated] on 30/12/2018 - 14:32

  It sounds like there is an issue that needs to fixed. I lived a complex of 16 units that needed the exterior painting, the quote in 2004 was $140k, ($40k was for scaffold as they were 2 storey). There was no sinking ever setup for this and they just put rates up and saved up the money to do it, I actually sold 4 years ago and the painting was still not done. I drove past a few months and the painting was being done.

  • 

    garetz on 30/12/2018 - 15:59

    That was a scam 100%.

• 

  RotundPolarBear on 30/12/2018 - 15:34

  I pay $4000 a year. It feels like a rip, but there is a gym and pool at least.

• 

  bobbified on 30/12/2018 - 23:23

  I pay $1000/quarter for a one bedroom apartment. Building has pool and lifts.

  Be happy that they haven't needed to do a one-off fix where they can ask individual apartment owners to contribute a large amount as a one-off. I've heard of owners having to take loans to pay that kind of thing.

• 

  exceladdict on 31/12/2018 - 09:15

  +1

  It sounds like you care about your property and about your hip pocket, so:
  1. Don't just look at the headline number, read the AGM documentation and financial statements to see what makes up the higher number. It will either answer your question or raise more questions as to why money is being allocated to things that don't need attention, and
  2. Join the council of owners. You can then help develop the proposed budget and further push your cost cutting agenda.

  As other people have said, the absolute amounts are kind of irrelevant. What's relevant is what the money is being spent on. For example your property may have been under insured or skimped out on maintenance for years, and now need to raise funds for a major repair. Or, they may be trying to save for a rainy day. Either way you need to dig into the financials to find out.

• 

  LoisLane101 on 31/12/2018 - 10:46

  I pay $600 a quarter for 9 units in a complex that is nearly 40 yrs old so lots of ongoing repairs and maintenance. Plus council rates of course. We just had to put through a special levy of $4000 each unit to do the roof, gutters and down pipes. Hurts but the work needs to be done as 50% of us had leaks last winter. As an owner you can request the cash management reports of expenses from the strata manager. And always a good idea to have a decent amount in the reserve funds too.

• 

  huggzz2u on 31/12/2018 - 20:33

  I’m in parramatta 2bedroom, no lift, no pool, no gym, small block 6 units $860. As far as I’m aware as the building ages strata fees go up to manage repairs and maintenance.

• 

  jhmtaylor on 01/01/2019 - 18:56

  +1

  Be careful what you wish for.

  A well-maintained property sells for a lot more, attracts better tenants and higher rents , easily lettable. 2 years ago I sold my mother's unit (deceased estate) where the building was 50 years old. It was maintained to a very high standard with good landscaping and sold for approximately 15% more than similar properties in the area. The body corp committee demonstrated a high level of skill in the way they ran it with maintenance and expenditure planned out 15 years in advance. Eg re-paint every 10 years, refurbish foyer every 15 years, replace balustrade every 20 years etc. They had a significant sinking fund and never needed to call for special levies.

  If I was you I would not focus on the total cost but the value for money.

• 

  Kyle5035 on 10/10/2019 - 20:12

  I recently became aware of the same issue with my strata fees. I have had my two bedroom apartment in Penrith for 10 years, and during that time the strata fees have nearly double (currently $780). My apartment building only has seven units and a simple level block, no lifts or pool.

  I decided to go over all the annual statements for the last six years - what I found was very concerning. Of the $780 quarterly levy, only $50 is being allocated to the capital works fund, the remaining money was being spent on administration costs.

  I discovered huge increases in adminstration costs from 2016 onwards - coincidently the same year my Strata Management company was sold to an unknown buyer. A breakdown of the increased costs are as follows:

  • $55 per batch of letters regarding notification of fire alarm inspections, excluding the cost of printing and postage. Prior to 2016, we were only charged for printing and paper, for these letters.
  • $55 per letter for any breach of a by-law, excluding printing and postage
  • Management fee was increasing 5.5% per yer. I have since discovered that competitors are only charging increases in line with the Consumer Price Index - atm that's < 2 %, and has been for approx 4 years.
  • $160 increase per year for the tax assessment.
  • Significant increases in printing, paper and postage costage costs (~ $250 per year)

  The total increase to the administration fees per year were:
  - $600 for typing the letters
  - $160 for tax assessment
  - $350 in printing costs

  Of the above costs, all of it went to the Strata Manager - not third parties. They were reaping all the profits!!

  Whilst these costs are not significant, it was incredibly difficult working with the Strata Management Company to reduce/remove these fees. However, I successfuly argued the removal of the $55 fee for typing the templete letters (e.g issuing reminder to have smoke alarms tested, e.t.c). I also argued that as our apartment building doesn't earn any money (raising levies doesn't constitute 'earning money' to the ATO), then our building doesn't need a tax assessment each year. Again, I had to fight the strata manager to remove this as they continued to mislead me that it was required.

  Also, I successfully reduced the inspection of fire alarms from bi-annually, to only annually. Again, the strata manager continued to fight me on this - lieing to all the owners that there was a legal repsonsibility to inspect them bi-annually! I also lobbied all the other owners to nominate to recieve all correspondece via electronic communication e.g email. Resulting in a significant reduction to the printing costs.

  The moral of the story is this - some strata management companies are incompetent crooks. I learn't the hard way to stop believing that they're acting in your best interests. They will lie and cheat you out of your money.

  Good luck to everyone out there, shop around, and do your own research regarding strata matters.

  P.S I'm still with the above strata management company, because the Owners Corporation signed up to a three contract (12 months before I took an interest in the strata management). I will be lobbying very hard to have them removed.