body corporate fees Archives | Apartment Specialists

Tag: body corporate fees

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 andrew@apartmentspecialists.co.nz or call +6421 424 892 and I’ll be happy to help you with your queries.

Cheers. Thank you!

Summary:

Pros: In upmarket buildings where the facilities are large enough to cater for many people to use at a time – this then makes the difference and is worthwhile.

Cons: not often are the facilities good enough to cater for the number of people living in the building and the maintenance can become costly

Pools, gyms and tennis courts add to the amount of your Body Corporate fees annually and are facilities not often used and often need maintenance.

However, there are exceptions to the rule where there are high end buildings in Auckland that have superior facilities.

The major factor to consider is if the facilities are large enough to cater for the number of people in the building and would you use them. If this is the case, then it is worth your while paying the extra Body Corporate fees and may increase the value of your apartment.

TRANSCRIPTION:

Andrew Murray from Apartment Specialists. Is an apartment complex with swimming pools, gyms and tennis courts, do they add value or just increase your body corporate fees?

Now if I was going to give a generalised answer across the board, I would be saying they’re a complete waste of money. There’s always something going wrong with them. You never actually use them. I own several apartments and I live in an apartment complex, I never use it and the whole time I think of using it, there’s someone else using it. So if I had a blank board again at the end, I’d say they’re a complete waste of money.

Now there’s always an exception to this rule and that’s if these facilities are outstanding. For example, The Pullman, you’ve got a pool you can actually do laps in and you can actually sunbathe around the side. They usually take away the roof. Or in Metropolis, you’ve got a gym where you’ve got multiple machines.

The good way of looking at it is does the gym or the pool free, or would someone actually pay to use that as a stand alone. If they could, then that a small gym in itself, or a small pool in itself? And in that case, yes it definitely adds value, but otherwise it’s just a complete waste of money.

Some examples of this is you’ll see these apartments or these complexes that have these pools that are probably a couple of meters wide. Some are eight meters long and they’re basically washing machines. I see a lot of them with these off the plan apartments, I’ll give you an example is the Queen Residences. I saw the photos of how they’re selling the apartment. I looked at the pool, and I said, “That would be great at my house, but not for 280 plus apartments.”

Anyway, I hope that helps. You decide when you’re looking at that apartment complex, does that pool or gym actually achieving or increasing the value or is it just going to cause you problems?

Cheers, bye!

Do you have any questions so you can get the best deals when buying an apartment in Auckland? Download our Buyers Guide to get much sought after insights. You can also email andrew@apartmentspecialists.co.nz or call +6421 424 892 and we will happily answer any questions you might have.

Summary:

Your Body Corporate is worked out by the unit of entitlement on your apartment.

Your unit of entitlement is basically the value of your apartment – for example the pent house or larger apartments in the complex will be different to a smaller, lower to the ground property.

This is worked out by how many units your apartment is worth and then divided by how many units make up the whole building.

And then the budget for the year is divided between how many units there are and then that gives your annual Body Corporate fee.

TRANSCRIPTION:

Good day, Andrew Murray here from the Apartment Specialists, and today we’ll be talking about body corporate fees, unit entitlements and how it’s all worked out.

If you are an apartment owner, then you pay a portion of the budget, which is called your body corporate fee. This was worked out by your unit entitlement, which is basically the value of your apartment. A penthouse has a higher unit entitlement than a studio on the bottom floor.

These unit entitlements are provided when the apartment is first built. They are actually set out in the title. Generally, on a pages further down, four or five, something like that. In there, there will be a schedule of unit entitlement of every single unit.

I have got this in front of me right here. As you can see this off the title here, a schedule of unit entitlements. In the entitlement, you will see the number of unit and the floor area. You also got your unit entitlement and the heights, and so on.

Here, this is all car parks, and you can see that this figure of the unit entitlement for each unit. Now there are 49 units in this complex. If you add all these together, including the carparks, that will come to 10,000. It is a share of 10,000 and you can see a total unit entitlement equals 10,000.

You then go, “Okay, how do we work out the body corporate fee for a particular unit?”

Obviously, your nominated real estate agent gives it to you or a body corporate gives it to you. This is how you can work it out. You go to, say, unit 4D. That is my particular unit. It has a unit entitlement of 265. 265 divided by 10,000 – which is the unit entitlement – gives you .0265%. That means my body corporate fee is 2% or 2.65% of the overall budget. It is my share. If we then go to the budget which is $205, 030.

Okay, let us work out the budget. I’ll go, okay, so we will go 205,030 (sorry about my writing) times .0265, which is unit entitlement percentage of the overall budget. If I do that on my calculator now, on my phone as you do. Okay, $205,030, as you can see times .0265. I’m not too sure if you can see that equals my unit, my body corporate fee of $5,433.00. Which is spot on and that helps you figure out your unit entitlement or your body Corporate’s fee from the overall budget.

Okay? So that was 5,433. I love this. My handwriting, it is shocking. $5,433 from my unit entitlement.

Anyway, I hope that helps. Bit of a different way of doing it. And yeah, cool. If you have any questions about unit entitlements, figuring it out. If you are struggling to do it, give me a ring or flick me an email to andrew@apartmentspecialist.co.nz.

Talk soon.

Cheers. Bye!