New Body Corporate Management

Strata fees are contributions to the running, administration, and upkeep of the owners corporation. At the AGM, the owners corporation will set the annual administration and maintenance budget. Each lot within the strata or owners corporation is levied their share of fees based on their lot liability.

Strata levies or fees contribute to the OC budget which typically includes the building insurance. The building insurance or strata insurance policy covers the building replacement, public liability for common property, fidelity cover, machinery breakdown, officer bearers liability, etc.

Strata property is a property title or ownership in strata titled buildings i.e. an apartment building, townhouse complex, or an office building where there are multiple owners. Strata title means shared assets or amenities (i.e. shared driveway, gardens, lifts, basement car park, swimming pools, etc.) and gives rise to the creation of an owners corporation.

Strata property or more accurately strata titled property differs from Torrens titled property where you are the sole owner of the building and the land (with the only shared assets property being the neighbouring fence).

An owners corporation will be required by the ATO to lodge an annual tax return if the owners corporation generates taxable income – that is collected beyond funding the running and administration of the building.

Strata management is also known as body corporate management and owners corporations management. These terms can more or less be used interchangeably (depending on which state in Australia you’re in).

Strata management (or owners corporation management in Victoria) is the management of the legal entity that owners the common property of a building (i.e. the body corporate / strata scheme/owners corporation).

Strata management entails the convening and running of the Annual General Meeting, the setting of budgets, the collection of levies, the preparation of accounts and records, and the responsibility for the upkeep of the building.

If you wish to learn more about the defining factors surrounding body corporate management. Find out here today. 

Strata managers in Victoria charge $300 to $500 per lot on average (total of all above charges). Owners Corporation Management Fees differ between different strata management companies however typically the following factors will be determinants of the pricing:

• Size of the building and the number of Occupiable Lots
• The facilities, amenities, and common property of the building
• The location of the building and building usage (i.e. apartments, townhouses, commercial, industrial, or mixed-use)
• On-site staff presence i.e. part-time or full-time building manager, facilities manager, concierge, security, etc.
• The service expectations and other requirements of the owners corporations.

It’s also important to note that Owners Corporation Management Companies derive       their income/revenue from:

• Professional management fee (for the service of providing strata/owners corporation management.
• Disbursement fees (for costs that they incur in relation to things like printing, paper, envelopes, postages etc.)
• Insurance commission – typically 10-20% of the base insurance premium as the OC managers are often authorised representatives of an insurance broker or insurer. This is a sometimes contentious issue and one we will often discuss with Committees as to how best to mitigate any potential conflicts of issues
• OC certificate fees – paid by the lot owner to the OC management company when they require an OC certificate for Section 32 when selling their lot in the owners corporation.

If you are concerned about the fees charged by your incumbent management company or any other cost aspects of your building’s operating expenses, most welcome to email us at office@strataconsultants.com.au and undertake a review.

Body corporate and strata are often used to refer to the same thing – i.e. the legal entity that owns the common property in strata titled building. In Victoria, the term ‘body corporate’ was replaced with Owners Corporation when the Owners Corporations Act 2006 came into effect on 1 January 2007.

Yes, you can run your own body corporate (now known as owners corporation). If your owner corporation is a Tier 2, 3, 4 or 5 owners corporation. However, Tier 1 owner corporations must have an owners corporation management company. This is done by establishing an owner corporation and electing a chairperson and committee members to manage the body corporate services.

The chairperson and committee members will be responsible for setting the rules and regulations for the body corporate, managing finances and maintaining the common property. This can be quite a daunting task, which is why many owners choose to engage a manager to assist with the running of their new body corporate management company.