The most common question buyers ask is What is the body corporate sinking fund balance? What does that really tell you though? A big figure is good, a small one bad? It’s too simple a measure without some context. A clearer question is how much do we have and how much do we need? This article is about how […]
How A Body Corporate Budget is Set and Changed
I recently received the following excellent question from Frank: I’ve just bought a unit and am confused about the budget-setting that you mentioned. Who sets the proposed budget for the AGM? The committee? he treasurer? The body corporate manager? And what if the meeting wanted to increase the proposed budget by, say, 15% because of some […]
What Are Pre Issue Body Corporate Levies
Pre-issue body corporate levies, or interim levies as they’re sometimes called, are a response to the peculiarities of the end of financial year process for strata schemes. Body corporate end of financial year systems are different from the majority of the rest of Australia. The end of financial year can be any month in the […]
What Happens When Body Corporate Budgets Are Not Adopted
The biggest complaint about strata schemes is that the levies are too high! Particularly since levies have a tendency to increase, usually by a small amount year in year out. When they vote at general meetings most owners (if they vote) will vote yes to the legislative motions which include things like confirming the financials and insurance […]
Body Corporate Levies: Why Are They So Expensive?
One of the first questions people ask when they’re buying a unit is “how much are the levies?” It’s a smart question because it does no one any favours to buy a property they can’t afford to hold. The body corporate levies are a large part of those holding costs. Savvy buyers take the current […]
Unexpected Body Corporate Fees
A key consideration when you buy any property is going to be whether or not you can afford the holding costs. And for units that means body corporate fees. It’s such an important issue, for both owners and body corporates, that legislation requires the current levies payable be disclosed to lot owners at time of […]
What Is A Body Corporate Sinking Fund Forecast?
Whenever I prepare a strata report one of the few documents I always include is a copy of the Sinking Fund Forecast. I do that for a very specific reason; they’ve a valuable source of a lot of information about the strata scheme, the Sinking Fund and management. What Is A Sinking Fund Forecast? A […]
Body Corporate Levies and Prompt Payment Discounts
Body corporate levies are different from other sorts of accounts; they attach to the lot rather than the lot owner. This is because a body corporate isn’t offering a service like a Strata Manager, or selling a product like Telstra. A body corporate is managing the affairs of a building for, and by, a group […]
A Quick Guide To Levies In Arrears
In any group of people required to contribute financially on a regular basis there is inevitably going to be someone who defaults. In body corporate lexicon a levy issue that has been defaulted on, ie an invoice that has not been paid by the due date, is considered “Levies in Arrears”. It’s a good idea […]
Substantial Levies In Arrears
Levies in arrears are always an issue for body corporates, but especially so when those arrears become substantial. I have defined substantial levies in arrears as over 20 – 25% of total funds held – calculated by dividing levies in arrears by current total funds held. This is the point where liquidity will start to […]
How To Calculate Body Corporate Levies
Mention the word body corporate and most people immediately think of levies. I’m convinced it’s the one thing that everyone knows about body corporate’s that’s actually correct. Every body corporate does issue levies. What amount those levies are is vastly different from building to building. I’ve seen levies per lot as low as $55 per year and […]
Body Corporate Levies & Expired Current Levy Year Issued
Body corporate levies are set on a year to year basis, three months after the start of the new financial year. For reporting this creates issues. Sometimes a disclosure statement or records search will quote levies for a period that has expired. For instance, say the levies are quoted to 31/7/2012 and yet the date of […]
Body Corporate Levies
One of the most common misconceptions about body corporates is that they are overcharging for levies or somehow making money off the lot owners. I’m never really sure what nefarious purpose people think is going on, but it’s not at all what’s happening. Body corporates are heavily regulated in almost every aspect and levies more […]