What you need to know about Owners Corporation Fees – Victoria

What you need to know about Owners Corporation Fees – Victoria

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. 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.”   So, what do the Owners Corporation Fees contribute to? Your Owners Corporation can set both annual and special fees. OC - what you need to know about OC fees graphics

Annual Fees 

Annual fees cover general administration, maintenance, insurance and other ongoing costs. Lot owners pay their share of annual fees according to their lot liability. To determine the fees for the financial year, your Owners Corporation is required to prepare an annual budget. This requires the Committee to estimate the cost of administration, maintenance, insurance and contributions to the maintenance plan before the annual general meeting each year. A maintenance plan assists the Owners Corporation to budget for necessary works. Your maintenance plan will contain details about your maintenance fund.    An owner’s corporation’s maintenance fund is effectively a deposit which exists to allow an owners corporation to pay for repairs and maintenance of a building, in accordance with the scheme’s maintenance plan.  The money in a maintenance fund can be spent on several different things. Firstly, it can be spent on anticipated capital expenditure, or non-recurrent items.  In a large strata scheme, this often includes large or one-off items, such as painting the building or major structural repairs to common property.  The maintenance fund can also be used to replace major capital items in a scheme.  This might include items such as common property fences, or carpets in a lobby. Maintenance funds can then also be spent on any other reasonable expenses which should be reasonably met from capital, such as pool furniture. 

Special fees  

Special fees cover extraordinary or unexpected expenditure (such as urgent repairs). If the amount of the proposed special fee is more than double the amount of the owners corporation’s annual fees, it must be approved by special resolution. For the special resolution to be passed, it required support from at least 75 per cent of all lot owners.   If you have any further questions regarding Owners Corporation Fees, your maintenance 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.

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