Where exactly do your Body Corporate fees go? - SSKB

Where exactly do your Body Corporate fees go?


Where Exactly Do Your Body Corporate Fees Go

At times new Owners may not understand where their Body Corporate levies go and may assume that their levies are paying only for the Body Corporate Manager. However, your levies cover the costs for everything that it takes to maintain your Body Corporate scheme annually and into the future. 

Your Body Corporate Committee set your levies based on the infrastructure and facilities within the scheme, maintenance requirements, age of the property and the future direction of asset management. These annual levies can be classified into the administrative fund and the sinking fund.

Administrative Fund

This is primarily to cover the annual day to day running costs of the Body Corporate such as cleaning, grounds maintenance, pool chlorine, electricity for the common area and insurance.

Sinking Fund

This is to pay for non-recurring capital expenditure items of the Body Corporate such as painting, re-roofing the building(s), intercom replacement, resealing the driveway etc. The sinking fund is used to maintain a reserve of funds for these future capital expenses. The projected reserves and required contribution amounts are determined generally by experienced consultants within a Sinking Fund Forecast report.

Budgets

An annual budget is established for the administrative fund and the sinking fund each year. Each of these budgets considers the projected expenditure of the Body Corporate and the projected reserves. At the annual general meeting all Owners consider, then accept or reject the budgets for the ensuing year. The income for this budget is to be contributed to by all the Owners on a pre-determined basis, known as a lot entitlement. Lot entitlements (contribution and interest) for each lot are contained within the Community Management Statement (CMS) registered upon formation of the Body Corporate.

Every Owner pays Body Corporate levies, and they are based on these budgets.

An important aspect of Body Corporate Management is to collect money from Owners to ensure the Body Corporate can pay its bills. At SSKB we have a detailed arrears process to assist your Body Corporate’s cashflow. We provide Owners with reminders if they miss the due date, and if the levies are still unpaid, we follow a system to bring the money in as quickly as possible to ensure the Body Corporate has the cashflow it needs to meet its commitments.

Levy Notices

Levy notices are prepared by the Body Corporate Manager  and sent to each Owner, often on a quarterly basis, although each scheme may differ. It is imperative to ensure prompt payment is made so that the cash flow of the Body Corporate remains consistent to meet its expenditure requirements. For this reason, some Bodies Corporate offer a discount to ensure the prompt payment of levy contributions.

Community Management Fee

SSKB is engaged by your Committee for an agreed fee to attend to the secretarial and financial functions on behalf of the Body Corporate and this is detailed in the  SSKB Adminisration Agreement.

This involves preparing meeting documentation, attending the required meetings and ensuring the actions from those meetings are attended to and recorded. The minutes of all meetings and decisions of the Body Corporate are also maintained to ensure a full and accurate record of the history of the Body Corporate and made available to all Owners via the SSKB online portal.

Services may include matters such as the preparation of proposed budgets, convening, sending notices for and attending the annual general meeting, in addition to forwarding minutes to all Owners. SSKB also provide these same services for Committee meetings held by your Body Corporate.

In addition, SSKB attends to routine correspondence and assists your Body Corporate in ensuring that they are compliant with legislative issues.

The Financial Team at SSKB looks after financial matters including opening and operating the strata community’s bank account, attending to payment of accounts, issuing contribution notices to lot Owners and receipting those payments. We also carry out reconciliation of the accounts and preparation of financial statements at the end of each financial year, as well as obtaining quotations for the renewal of the Body Corporate’s insurance.

If you have any concerns regarding your personal circumstances, your Community Manager will be able to assist you.

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Recent Comments

4 Comments

D. Bramwell On October 9, 2019 | Reply

Dear Sir /Madam, We are 5 townhouses and will have a large expenditue of around $25,000 each unit as our common area cladding has badly deteriorated with holes in some parts. Three of us can fund our share ourselves but two won’t say if they can fund or not. Our Management has said we all have to go with a Brokers loan of 8.65% for 10 years, three of us prefer to pay from our own funds and don’t want this 10 year loan at our age as we too old one over 80 years. What alternative do we have. Can a levy of one year be struck and we pay our share. With thanks D Bramwell

Marlene On November 22, 2019 | Reply

What info do u require for quoting on our complex. 12 units. 3 permanently rented. 3 not rented. 6 holiday.

Paulette McCormack On January 13, 2020 | Reply

In your levies can you be charged for something that you are not connected to, never likely to use, have not the infrastructure to use but because 83 of 88 lots have to use the service you also get billed (83 houses in gated complex and 5 on outside of gated complex)

Also can you request a detailed breakdown in your levies notice if you suspect discrepancies?

    Emma Smith On February 24, 2020 | Reply

    Good afternoon Paulette,

    We write in response to your enquiry regarding use of infrastructure and levies.

    In short yes, you can be charged for something that you may not use.

    We have assumed that your house (outside of the gates) is not a separate Body Corporate but is a part of the same Body Corporate, connected to the Lots inside the gates. However your description does sound unusual and is worthy of verification against the plan of subdivision, which your Body Corporate Manager should be able to provide to you.

    A more detailed response:- The Body Corporate common property is defined on the plan of subdivision and each Lot which has rights of use of that common property will be identified within the plan of subdivision. Each of these lots must share in the maintenance of all common property in accordance with the Schedule of Contribution Lot Entitlements (this is found on page 2 of the Community Management Statement – CMS). While not impossible, it is generally unable to change the schedule of Lot Entitlements as this must be agreed to by other owners at a General Meeting. Common examples of common property which may not be utilised include a swimming pool, the lift (if you live on the ground floor), basement carpark (if you do not own a car) however no Lot is excluded from contributing to the maintenance of all common property infrastructure in their Body Corporate.

    The breakdown of a Levy Notice is best illustrated in obtaining a copy of the annual Budgets. (the Administration Fund & the Sinking Fund budgets), these should have been distributed to all Owners with the meeting agenda for the most recent Annual General Meeting (AGM). Each owner pays their proportion of the total budgets on the basis of their Contribution Lot Entitlement.

    We identify that each of the above mentioned documents is available from your Body Corporate Manager. If you would like for us to interpret these documents and discuss this with you, we would be happy to assist and you should email us directly on sskb@sskb.com.au.

    Regards

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