What does my Body Corporate fees cover and what are the biggest expenses?

SUMMARY:

The Body Corporate takes care of running the finances for your apartment building. The 3 biggest costs are the insurance, building manager and the Body Corporate administration company.

The first cost is the biggest and that is insurance. Insurance covers the whole building. This includes fire, flooding, cover of accommodation if needed and so on.

The second biggest cost is the building manager. The building manager co-ordinates all the maintenance and all the day to day tasks including cleaners, looking after and maintaining common areas, security updates and so on.

The third main cost is the Body Corporate administration company, these are companies like BCA, Crocker’s or First Street. This is the company who is solely employed by the building and runs the administration and day to day running of the building. Like collecting levies, paying bills, financial reporting, organising.

TRANSCRIPTION:

Good day, Andrew Murray here from the Apartment Specialists talking about the expenses a body corporate has to pay each year. There are three main things that always stand out as being the most expensive. Obviously, you have one off things, like if a lift has to be replaced or there's the painting of the building that needs to be replaced. But continuously each year, there are always three main expenses that are always there and are the main ones.

The first one is insurance, and this covers if there's fire, there's flooding, or an earthquake. It means that if there are one of these things it'll basically pay to replace the whole building and give you income or a place to stay in the meantime while it's fixed. So that is number one, it's always the largest.

Number two is generally the building manager. So, this is the man or woman who coordinates all the maintenance, and everything that's happening in the complex from day to day. It can be from the cleaning, from the lift maintenance, from getting the code compliance from the council each year for the building, right through to carrying out the long-term maintenance planned activities on behalf of the body corporate committee and body corporate.

Now the next one is the body corporate administration company. And now this is what a lot of people think is the body corporate. It's not. You as an owner, and you need to understand that the owners are the body corporate; you employ a company to do all the administration. So, this is taking care of all the accounts, the balance sheets, collecting all the money, making sure it's coming in, making sure if people aren't paying.

Companies like Crockers, Body Corporate Admin, which is called BCA, or Strata or First Street. So these are charged and they're are generally charged per unit, and that's generally the third biggest expense. After this, you're talking about your miscellaneous. Your things like, obviously as I mentioned earlier, your long-term maintenance activities like doing up the garden, or the painting the building.

It could be things that just gone wrong during the year. Maybe the lift needed to be fixed, or maybe light bulbs needed to be replaced and just things like that. Anyway, I hope that helps. So yeah, just recapping, the three main expenses of every body corporate, which are the most expensive, that happen every year are:

• Insurance
• The building manager
• Employing of the body corporate administration company

If you have any questions, flick me an email at [email protected] or call +6421 424 892 and I’ll be happy to help you with your queries.

Cheers. Thank you!