UPDATE: 13/4/2015 – see the end of the article.
As with many things body corporate water rates are complicated. Whether your water bill comes from the Council or the body corporate will be determined by whether or not a water meter is installed.
By contrast, your rates bill will definitely come from your local Council, but, it’s calculated in a slightly different way than other properties.
Rates
One question I see regularly is “Do I need to pay both rates and body corporate levies?” It’s an excellent question.
The answer is yes, yes you do pay both council rates and body corporate fees.
Body corporate fees are the costs of running your particular body corporate. Levies are paid to the body corporate who then use those funds to on pay the costs.
Rates are local government taxes. All dwellings and blocks of land are taxed individually.
Calculating Rates
In Queensland council rates for properties are calculated by multiplying the council designated rate times the value of the lot. The rate payable varies depending on the rate category the property falls into.
So, for instance Logan City Council base rate charge by cents in the dollar was 0.3262 (0.003262) for the “residential and other land / owner occupiers” category.
On a valuation of $215,512 the calculation would be:
$215,512 x 0.003262 = $703.00 per annum or $351.50 per half year
So, where does the valuation come from?
The valuations used for rate calculations are the annual land valuations issued by the Department of Natural Resources & Mines (DNRM).
Which is where we hit a snag for body corporates because community title schemes are issued only one land valuation and that is for the body corporate as a whole, yet each lot owner receives a rate bill.
Calculating Rates for Lots in a Community Title Scheme
The body corporate itself does not get charged rates, notwithstanding the fact the body corporate receives the only land valuation for the scheme.
The amount of rates payable by the body corporate as a whole is calculated exactly as set out above. It is not charged to the body corporate though.
Instead the Council calculate the percentage of the cost each lot owner needs to pay.
To allocate proportions of the scheme’s taxable rate Interest Schedule Lot Entitlements of the body corporate are used.
Lot Entitlements as a Way To Calculate Cost Allocations
Queensland body corporates are registered with Contribution Schedule Lot Entitlements (CSLE) and Interest Schedule Lot Entitlements (ISLE).
CSLE are used to calculate the amount each lot must contribute to the upkeep of the scheme. CSLE are required to be as close to equal as is possible without being unequitable.
By contrast ISLE can be as varied as the different lots themselves.
ISLE are used to indicate the value of the lot. If the building were to be destroyed completely, the value of any payout would be split amongst lot owners using the ISLE.
Consequently the rateable amount each lot must pay is calculated using the value of each lot as a proportion of the whole.
Body Corporates and Water Rates
If you buy a lot in a body corporate you may or may not receive a water bill.
Whether or not you receive a water bill will depend on whether or not your lot has an individual water meter.
Water meters may not be installed during construction.
For the developer a water meter is an added cost that eats into profit margins which they really like to avoid. Consequently many body corporates are registered without individual water meters.
If There Are No Individual Water Meters Installed
Ironically if there are no water meters installed then you will receive a water bill from the local Council and they will be responsible for ensuring you pay. The meter is on the body corporate common property and is read like any other meter.
The Council then splits the water usage cost amongst the lots within the body corporate and bills each separately.
To work out how much each lot owner individually needs to pay the Council uses the Contribution Lot Entitlements of the body corporate.
What that means is regardless of how much water you use, or don’t use for that matter, you will be charged a percentage of everyone’s water usage, including the common property.
With the common property usage, it doesn’t matter. You’d pay the same percentage of those costs anyway, through the body corporate levies.
But you’ll be paying a percentage of everyone else’s use. It’s great if you use a lot of water, not so much if you don’t.
Can Water Meters Be Installed?
It is certainly possible for the body corporate to install their own meters at their own cost, and many do.
The installation cost is covered by the body corporate if the scheme is a building format plan, or the lot owner if a standard format plan.
The cost can be quite prohibitive.
When Individual Meters Are Installed
Installation is only the first step. Then the meters need to be read.
Unfortunately this is where the local Council bows out. They will only read the one water meter for the building as a whole, which they continue to do, but now they bill the body corporate directly.
It is up to the body corporate to read the individual water meters.
It’s also up to the body corporate to pay the water bill to Council, raise invoices to the individual lot owners for their usage and percentage of costs and then chase those lot owners for payment.
Again this regularly recurring cost can be prohibitive.
Conclusion
Finding out your body corporate water arrangements is pretty simple: ask the body corporate manager, or if self-managed the Secretary.
I’m not altogether sure how it will help you as a lot owner, but it’s nice to understand how these things work.
UPDATE 13th April 2015
If your body corporate was registered prior to 1st January 2008 then on the Gold Coast you will be able to enter into a sub-metering agreement with the Gold Coast City Council.
Essentially the body corporate enters into an agreement to have the individual water meters read and billed by the Council. There are a number of conditions that need to be complied with, including the need for an Automatic Reading System and the replacement of the meters every eight years.
It does eliminates the need to arrange separate water meter reading and billing which may be of benefit to some schemes.
If you’re not located on the Gold Coast it’s well worth approaching your own Council. This is a touchy subject and they may have formulated their own systems for dealing with body corporate water rates.
Body corporates registered after 1st January 2008 will include individual water meters.
photo credit: Thomas Hawk via photopin cc
Unless stated otherwise all the information on this website relates to Queensland legislation.
Isn’t it handy when Council, developers and all financial parties have reaped the maximum from pushing for and building a huge block of units and can then walk away from same and throw the huge cost and problem of water usage over to the unsuspecting owners? Some of these owners rent out and have a lot of people unknown to the owner occupiers merrily using up water that will be subsidised by single or two person/owners occupying and hoping to live frugally in their unit. Some of the latter people actually do all the work for the absent owners who also have big tax concessions for their “investment”. Why should the small minority have to pay for the profits of the developers and have to chase and fight for fair payment of water bills??
It’s certainly very frustrating. Particularly as buyers seldom find these things out before hand and it all comes as a nasty surprise
I am thinking about buying a unit in a block of 5. There are no individual water meters. At some time in the past, it was decided that as my potential unit is larger than the others, it should have 2 entitlements as far as body corporate levies are concerned. I know I will have one lot of council rates, but I am concerned that I may be responsible for double water rates. Am I worrying for nothing?
Hi Janice
No you’re quite correct. With 2 lot entitlements to 1 for other lots you would pay double what everyone else pays for water… Assuming water is allocated per lot entitlements.
Check with the manager or owner
I hope it’s not too late for this reply. If the other lots are mostly occuplied by tenants, and they cram 2-3 people per room and one in the living room and 1 in the laundry, your water bill will be exorbitant by the end of the quarter. I am experiencing the burn right now, paying close to $400 every quarter when there’s not even a running tap in there (under renovation)
Hi Sel
I would think that this is going to come down to the body corporate taking action to address the overcrowding. If you’re paying that much then the other lots are too and hopefully the combined lot owners will take some action.
Perhaps contact your body corporate manager and discuss with them to see what if anything is being done.
Hi Lisa,
I’m new at being part of a Body Corp and have been reading the various considerations in regard to water meters and billing. I will be attending a Committee Meeting in about a week and want to submit an item for disucssion on the daily fee charged by the Service company on behalf of the Body Corp to read the meters and process the Water Bill. We have individual meters and there is a master meter for the development. The daily fee (Administrative Fee) charged is close to 29 cents, which adds substantially to the Water Bill. I would appreciate any suggestions on how to best approach this.
Hi Lynne
I would suggest that you bring up the issue of the cost and suggest some alternatives. That could mean another company to read the bills, at a different cost or another solution altogether. I gather GCCC and BCC now offer some different solutions for schemes with individual water meters where they can be read and billed by the council. It will depend on your infrastructure of course but that might be a place to start. Find out a little more about that.
Hi Lisa,
So much appreciate your feedback.
Thank you!
I was wondering if anyone could give me advice, as a landlord in a body corporate with only one water meter for the complex and as you say the water usage is split regardless of usage. Am I able to charge my tenant the water usage in whole or percentage or not at all at the units are not individually metered?
Hi Craig
Oooh … good question. I don’t know the answer I’m afraid. Maybe someone else does?
My property manager tells me that on-charging water costs depends on the water saving devices on the property. If its not water saving you can’t charge. I wonder how that would change with a body corporate. Does that mean the whole scheme needs to be water safe? If there are any property managers out there I’d love to know.
our body corporate is involved in a rare situation, where the original block has been divided into three house blocks, plus a common. average block size is in excess of 1000mtrs. currently all three units are supplied by one meter, which is read and divided equally. the water utilities are willing to install a individual meter for me and deduct this from the main meter and the balance being shared between the others.
question being :- can this be done without installing meters on all units at the same time?
Hi Larry
There’s a lot of variables around this question. If you’re planning on putting a sub meter on your own property that’s your own business and its not anything to do with the body corporate. Its your property after all. Reading of the sub meter is a problem but if, as you say, the utility company is willing to read and deduct, then that’s great. It’s unusual they would without all three being done.
As to the actual physicality of installing only one; you’ll need to speak with a plumber.
Even if you can install I would still discuss with the other owners. There might be other factors you don’t know about or they might be interested in taking up the offer as well.
I note know one has mentioned the issue of GST.
If the body corporate is registered for GST and is on-charging the waters rates to owners based on units of entitlement say, then the character of the transaction has changed and the body corporate must remit 10% of the fee to the ATO.
Therefore, the body corporate should bill to owners with an additional charge for GST.
Hi Garry
It makes sense I guess. I thought water was an exempt category.
You’re right. Water is GST-free, regardless of whether the individual owner buys it from the water supplier, or from the body corporate. When the body corporate “buys” water from the water supplier (by paying for the entire building’s water-usage bill), that water is GST-free. And when the body corporate “on-sells” that same water to each owner, the sale is still GST-free. Therefore, the portion of the strata levy that’s for water usage must be exempt from the 10% GST.
Hi Strata Man, Thank you for your comment. How can I prove that water “onsold” by body corp
is GST free? because this particular body corp is charging GST with their invoices after they read the meter.
Please help . Thanks
Alex
Hi Garry,
I understand that paying the water sage is, in our complex’s case having 34 units, 1/34th of the meter but why do we all pay the water service charge. There is only one service coming into the property and we all pay the full service charge so the council gets 34 times the rate for the property. Am I missing something here or are we being ripped off?
Thanks in advance for your assistance.
I need advice Please. My Unitywater bill $471 for a Villa(townhouse) i have just bought. The townhouse had no water usages(tenants) in this period of time. (Awaiting renovations). Unitywater explained that the share is 2.2% between units. This seems to be an extreme amount. Is this correct? This amount is much higher than my energy bill!
Hi Sutton
It sounds like your scheme does not have individual water meters so the usage for the scheme is shared between the individual lot owners in accordance with their contribution lot entitlements. That is the subject of the article you’ve commented on.
What can you do about it? In the short term, nothing. You could ask for relief from your scheme but since everyone is in the same boat don’t hold your breath.
Long term, you could spearhead a movement in your scheme to install water meters so usage can be calculated.
In dual key apartments (separate entrances, different unit numbers ie units 15 & 16)
The rates / water is for both.
Will I need to pay double body corp?
In the dual key properties that I have viewed, One agent advised that it will be one body corp, yet in another dual key apartment the agent advised there will be 2 body corp fees?
Is this correct?
Note – one property was in qld, the other in nsw (not sure if this makes a difference??
Thanks
Hi Jane
Rates will always be issued per lot by the local Council. The difference will be whether the dual key is one lot or two lots, which varies from building to building. You can have two ‘apartments’ that are actually one lot, or equally, two lots that can be joined to make one apartment. Its all subjective.
Water and electricity will depend on the usage meters installed. Water may be billed from Council or the body corporate and electricity may be billed from an electricity provider or via the body corporate. Again its subjective to how the buildings are set up. I’m sure there’s even setups I’ve never seen as people do like to be creative in their solutions.
Depending on how you’re planning on using the dual key apartments presumably it will be handy to have individual meters for each part of the whole, so you can on-charge each portion as required.
can you please advise that if the lot has 4 units and the body corporate split the bill 4 ways and charges the 4 groups. Can one owner pass this cost onto their tenants if the property is rented. Under the RTA is states that the tenant cant be charged water usage if not separately metre.
Hi Val
This is not a body corporate issue, its a tenancy issue. I would believe the RTA on the matter.
I’m wanting wanting to submit an owners motion to have individual meter reading at our standard format 47 unit townhouse complex. Currenty it is lot entitlement. We already have individual meters but some may not be compliant.
Ive checked with QUU and they are happy to read meters as long as accessible and compliant. What level of costing detail do I have to include in the proposal? Im told Im restricted to 300 words. Is that true?
What happens if the proposal is defeated because someone is being advantaged and doesn’t support the change. Is there an ability to appeal?
Hi Jude
This is going to be a complicated sell if the scheme is a standard format plan. That’s because the meters are usually located on the individual lots. The body corporate has no authority to make resolutions relating to a lot.
That doesn’t mean the works can’t be done, it means that things are more complex. The body corporate would need to enter into individual agreements with each lot owner in order to move the process forward. This is a challenging thing to do and is best handled by committee and strata manager, though there is no reason an owner can’t do it.
If the building is a BFP under a standard module, rather than standard format plan, the meters will be on common property. To proceed you’d need to get quotes for inspection and rectification of meters, a challenge to know how many would need to be repaired until after the inspection. You need to further get advice from QUU regarding accessibility, to ensue its possible.
The restriction on 300 words relates to the explanatory note. There is no limitation on the number of words in a motion.
If you put up any motion and its defeated, and you believe the resistance to the motion is unreasonable, you may seek an Adjudicators Order that the motion be deemed passed as the objection was unreasonable.
May I know how the strata’s electricity fcontract for the common areas mainly staircase and entrance door lights? For a strata of 12 to 16 units, is the electricity supplier charges a lump sum regardless of numbers of light fixtures or is it metered based on consumption like normal household meters with daily charges and supply charges?
Hi Kim
Yes its based on consumption like any other household.
Hi there I am in a block of 5 units we have 3 -2 bedroom and 1 – 1 bedroom and 1-3 bedroom
How is the water bill calculated out please ? How is the percentage worked out ?
Thanks
Barrett
Hi Bharat
You’d need to find out if individual water meters are installed for your body corporate. If there are NO meters then water bills are calculated per contribution lot entitlement of the body corporate. You can find the list of contribution and interest lot entitlements in your Community Management Statement.
If individual water meters are installed, billing is done via each lots usage.
Hi. There are 6 units and one water meter in our BUP. Lots 1,2 and 5 each have a lot entitlement if 3 and lots 3, 4 and 6 have a lot entitlement if 2 totalling an aggregate of 15. Unity water tells me that my property share is 20%. So 3 units are paying a total of 60%. I find it a strange calculation that the remaining 3 units have a split of 40% to make up the 100%. Do you have any comment on this? Thank you Gail.
Hi Gail
When individual water meters are not installed the water supply company needs to use contributions lot entitlements for allocation of water. You’re not just paying 20% of water costs but 20% of all body corporate costs.
Whats the difference between the two groups of units? If there is no difference maybe look into installing individual water meters or challenging the contribution lot entitlements.
I’m sorry but I’m not understanding the part about… I’m paying 20% of all body corp costs as well as my water bill which states 20%. Obviously the lot entitlements are not equal because some are 2 bedroom units , I get that. My question is that I find it difficult to believe that the remaining 40% is split between those three units. How accurate is the splitting figure eg. 40% divided by 3 is 0.1333etc. Obviously I can’t look at anyone else’s bill but will try to and Id bet it would show a surprising disparity. Thanks Gail.
Back to you Lisa. I get it about the three units paying 60% of water bill. I don’t need to get individual water meters nor do I have to challenge lot entitlements, clearly 3 units have 3 bedrooms and 3 units have 2 bedrooms. I just wonder about percentage splitting of the remaining 40% that the other 3 units pay. How can I find that out? Would Unity water tell me this? Do you know the answer?
Hi Gail
Refer to the contribution lot entitlements of your scheme. That is how the water utility will be allocating costs. So 3/15 or 20% each for the larger units and 2/15 or 13.33% each for the smaller units adding up to 60% and 40%.