What you need to know about Owners Corporation Fees

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What you need to know about Owners Corporation Fees – New South Wales

What are Owners Corporation Fees? Paying Owners Corporation Fees is a fundamental part of living in a strata scheme. When sharing a building or common property with other owners, it is only fair that all contribute to the upkeep and running of the Owners Corporation.

NSW - what you need to know about OC fees graphics

So, what do the Owners Corporation Fees contribute to?

Owners contribute a fee that pays for maintenance and repairs for the scheme. The contributions are worked out in proportion to the unit entitlements of each lot. The funds are divided into separate funds:

Administration fund – for day-to-day expenses
Capital works fund – for major works, maintenance or repairs

You may be wondering what a capital works fund is. The money in a capital works fund can be spent on several different things such as:

major painting to common property;
basement car park marking;
repair concrete roadways and driveways;
replacement motor to basement;
replace stormwater pumps;
recarpeting common areas;
lift replacement;
and more.

Essentially, a capital works fund is a plan for the future. In New South Wales, the Owners Corporation is required to prepare a plan of expected major expenditure to be met from the capital works fund. The plan is for a 10-year period that commences on the first Annual General Meeting of the Owners Corporation. This is required to be reviewed at least every 5 years. Considering the involved process, it is not a surprise that Owners Corporation Committees prefer to invest in a qualified Quantity Surveyor to prepare 15-year Capital Expenditure forecasts to give committees the broadest possible overview of future expenses. Travis Henry, Senior Accountant for SSKB stated “Prompt payment of contributions by owners is essential to ensure the scheme can operate smoothly and efficiently. Adequate funding/cash flow allows services to be provided for the benefit and enjoyment of all owners. In turn a well maintained and presented scheme generally commands higher relative asset values compared to one that isn’t.” If you have any further questions regarding fees, your capital works fund or any other queries, please don’t hesitate to contact your Owners Corporation Manager. If you aren’t a client of SSKB, click here to see why you should choose SSKB.