Buying an apartment or townhouse? Ensure you understand the strata specific fees.

When you buy a strata property, you’ll be liable for annual levies (usually billed quarterly) so all owners are collectively contributing to maintaining the common areas of the property. This ensures that the following are covered:

• Building maintenance

• Common area maintenance

• Caretakers, cleaners and/or gardeners

• Shared water and electricity

• Building insurance

• Improvements and enhancements to building amenity

Types of strata levies (fees)

1. Administrative fund levies. These are regular operating expenses. This would cover most cleaning and gardening costs, any shared utility bills, body corporate insurance, and any general repairs or maintenance.

2. Sinking fund levies. These fees cover larger expenses over time. This may include renovations such as the replacement of roofing or the repainting of walls. Depending on state legislation, a long term (usually 10 year) sinking fund levy forecast may be required to ensure the building has a enough funds to cover expected maintenece as the building ages.

3. Special levies. If a task is required for the maintenance of common property and it falls into neither administrative or sinking, it becomes a special levy. Depending on state legislation the creation of a special levy may require an Annual General Meeting (AGM) or Executive General Meeting (EGM) giving all owners the opportunity to vote on the proposal.

Expected costs

Strata fees vary significantly depending on the complexity of the property. Expect to pay more for large buildings that come with greater maintenance overhead, especially if elevators and pools are involved. Depending on the property, you could see yourself paying between $500 and $3000 a quarter to cover administrative and sinking fund levies.