Whether you’re weighing up buying an apartment in Sydney or are looking at your dream townhouse, you’ll probably be considering the value of strata fees somewhere in the equation. So are strata fees, known as strata levies, actually worth it? Let’s look a little closer at the value they can provide and what to consider when making your decision.
What do strata fees include?
When you look at what strata levies include, they can actually present excellent value in a well-managed strata scheme. These regular payments are designed to pay for the management, maintenance and mandatory strata insurance cover for all common property within your strata scheme. Depending on your strata property this might include things like swimming pools, gyms, elevators, corridors, gardens, rooftop areas and lobbies. These amenities could be incredibly expensive to maintain if you had to pay for them all yourself! So in this sense, strata levies can provide access to fantastic amenities in your building at a mere fraction of the price.
Should you be worried by high strata fees?
Strata fees should be appropriate to the property and its condition. High strata fees can reflect a property with high quality amenities or they could reflect the higher maintenance needs of an older strata property. They can also be a sign of poor strata management, where major works haven’t been properly anticipated or planned for. On the other side of the coin, strata fees that seem unusually low could also reflect a strata management company that isn’t proactively planning for future needs. The strata fees for a property should ultimately feel like a balance between good value and forward thinking.
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What should you look for to find fair strata fees?
Before you purchase a property it’s certainly worth requesting to see the Section 184 Certificate for the specific strata lot you’re considering. This certification should cover how the strata scheme is being managed so you can make an accurate assessment of what your strata fees would involve. Day-to-day costs are covered by the administrative fund, while the capital works fund is designed to plan ahead for major works such as a new roof or external painting. Special levies may be raised for emergency or unexpected costs.
When reviewing the Section 184 Certificate it’s worth asking questions such as:
- Does current expenditure seem appropriate for the amenities and condition of the property?
- Is there a 10 year capital works plan, and are fees likely to increase due to this?
- How much are the strata management fees, and is the strata scheme benefitting from this service? A strata scheme can obtain quotes from several providers to gain an idea of strata management fees averages.
If you’re seeing good value in the strata fees and you feel the scheme is well managed, then the strata property could be the right move for you. Remember – effective strata management minimises fees through proactive body corporate services and planning, so if you are looking to change strata managers you can always contact Jamesons Strata Management.