Are My Strata Levies Increasing Too Fast?


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Are My Strata Levies Increasing Too Fast?

It’s easy to freak out about levy raises within your strata, however there may be a number of good reasons behind them. It all depends on the type of building you own in and the circumstances of the strata. Here’s what to consider if you’re facing a big levy price hike, and how you can go about appealing it if you feel it isn’t fair.

Are My Strata Levies Increasing Too Fast

Consider the services of your building

If your strata is providing or adding facilities, this of course will increase the property’s budget. For example, swimming pools, gym amenities, gardeners, cleaners, security and building managers all come at a cost to your administrative fund, and if these services are added by your body corporate in Sydney then a levy rise is to be expected.

How’s the Capital Works Fund looking?

Your Capital Works Fund (previously known as the ‘sinking fund’) is your strata’s allowance for building works down the track. If it’s an older building, repairs will likely be more regular and potentially more costly, and this can increase levy fees. If the Capital Works Fund is low and urgent repairs to the building’s roof or structure are needed, you may face a special levy in addition to your usual levies.

Is your strata budget being managed correctly?

Sometimes a rise in strata levies can be due to inefficiencies in management. Your levies could be covering costs to pay for previous errors in administration or uncompetitive service contracts. If your Capital Works Fund is consistently low and reliant on special levies, or if you feel you’re not getting full value from your service contracts, this could be due to poor management and your owners corporation may want to consider changing strata managers.

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How much is reasonable?

It’s almost impossible to compare one strata property to another to identify a fair levy rate, as the services, repairs and condition of every strata will be different. However, a rule of thumb tends to be somewhere between 0.3 and 0.7 percent of a property’s value for apartments with few facilities, and up to 1.2 percent for those with facilities. Remember this is a guideline only, and depends on many factors including location and market conditions.

What to do if you do believe your levies are rising too fast

You do have options of contesting a levy rise. First, within the meeting of the owners corporation, you may wish to vote against the motion to increase or to propose a different levy rate, however as always the majority decision will be put in place. Your body corporate in Sydney may also vote to increase the levies in incremental periods to make the adjustment easier.

If you’re concerned about your levy payment, your body corporate can vote on individual payment plans to pay levies off over a set period of time. Finally, if you have made every effort within your owners corporation meetings and still feel that you are paying wildly unfair levies, you might consider lodging an application for mediation with Fair Trading.

Do you have further questions, or are you looking into changing strata managers? Contact or call the Jamesons team on 02 8969 3300 today to discuss your situation with experienced strata management professionals.

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