Where Does Your Money Go When You Pay Strata?
One big reason to decide on strata living when you’re investing in a new property is sharing the costs for maintenance and updates of the property with the other owners. Most strata schemes have quarterly fees, which equate to your share of the cost for maintenance and upkeep. Your total yearly payments should be roughly between 0.8% and 1.2% of the property’s value if your scheme offers additional facilities, and between 0.3% and 0.7% if it doesn’t. However, other factors also influence this calculation.
What types of fees will I have to pay?
There are three types of strata fees:
- Administrative fund fees: These cover daily running expenses like cleaning, gardening, electricity, annual insurance and general building, plumbing and electrical work. This ensures that your building is always up to date, well-maintained and safe.
- Capital Works Fund fees: These cover longer-term maintenance and repairs including things like painting, or unplanned major works like repairing concrete spalling or balconies. This can also be used for things like storm damage, or if new regulations demand certain additions like fencing around pool areas.
- Special fees: These can cover planned upgrades or, emergencies or unexpected expenses. Special fees are required from time to time to fund either planned or unplanned major works if there is not sufficient money in the capital works fund to cover the costs. Ideally, a well-managed strata is rarely in the position where it needs special fee, but it does happen.These fees will be agreed upon at the Annual General Meeting (AGM), which is a big incentive to be an active part in your strata scheme and participate in AGMs. Another thing that will be decided at AGMs is whether or not your strata scheme wants to hire a strata manager. While hiring one will incur additional fees, an experienced strata manager can also save a development thousands of dollars per year by effectively managing the strata.
What factors influence my strata fees?
When the owners corporation sets the fees at the AGM, they will have to make many different considerations. One part is the building or complex itself: how big it is, how old it is, and what condition it is in all influence how much should be budgeted for both expected and unexpected maintenance costs. Then, the features of the property have to be considered. A pool, elevators, security doors, videophones, and other amenities all have to be maintained, updated and, if needed, repaired. For your personal fees, part of the calculation will also be what percentage of the total property you own.
Other factors may include where the building is located, as certain areas have higher costs for certain services, and how effectively the scheme is managed. If you have an experienced strata manager on board, they can work as a financial advisor and budgeter for your owners corporation to help plan to avoid unnecessary expenditures are to ensure that your fees are invested wisely. At Jamesons, we also pride ourselves in being able to get top contractors on site for repairs and maintenance work, saving our clients both money and time.
Learn more about how Jamesons can effectively manage your strata and ensure that you never pay unnecessary fees today.