How much are body corp fees?

Body corporate fees vary a lot from property to property but they average around $4,000 to $6,000 annually. Generally expensive properties and buildings with more shared facilities tend to charge more - sometimes over $10,000 per year. 

Before you buy make sure you know what the body corp fees for the building are, and how they’re charged - the real estate agent or vendor should be able to tell you. 

Body corporate fees for townhouses, apartments and other unit title properties are charged to all residents to cover the regular costs of maintaining and managing the common areas of the property. This might include:

• Insurance. 

• Shared utility costs (i.e. the cost of electricity to light the lobby of a building). 

• Building repairs and maintenance, including a long term maintenance plan. 

• Cleaning of windows and common areas.

• Maintenance of building wide HVAC systems and fire systems. 

• Maintenance of shared amenities like swimming pools, gardens and lifts. 

• The cost to employ a building manager if necessary. 

• Any other costs incurred to manage the shared areas of the building. 

If you owned a house you’d usually have to pay for these things yourself. But because you’re sharing a building with other people, your body corporate packages these costs up to be paid separately by all the residents. 

A body corporate is a group of residents who convene at least once a year at an ‘annual general meeting’ (AGM) to develop a long term maintenance plan, organise repairs, manage building finance and deal with any issues the building or residents may be having. When you buy into a building with a body corporate you automatically become a member. 

The body corporate fees are set by the body corp manager with help from whoever is managing the building. The fees are set in a yearly budget then approved at the AGM:

When setting fees your body corp manager will consider:

• All expenses the building will incur, like insurance and maintenance.

• Adjustments for inflation.

• Any one-off costs such as major repairs or building improvements. 

Setting the budget and fees is an important exercise. If the budget is set too low, the body corporate may run out of money and extra fees may have to be charged or parts of the building may not be maintained. 

Body corporate fees are usually charged either once or twice a year. If body corp fees are charged twice a year each payment is usually the same amount - but sometimes the payments may be unequal, if more of the body corps costs fall in the beginning or end of the year.

Several factors can influence the amount of body corporate fees, including:

• The type and number of amenities i.e. swimming pools can be expensive to maintain. 

• The number of units. 

• The age of the building (older buildings generally require more maintenance). 

• The overall maintenance requirements. 

• Any services offered to residents, such as the security of a concierge. 

Generally older, more expensive apartments, townhouses and units tend to have higher body corporate fees. That’s because they may have shared facilities and amenities that might cost more to maintain. 

Whenever you buy a property with a body corporate it’s important to check that the organisation is functioning well and in good financial health. The Home Owners and Buyers Association of New Zealand recommends you get hold of and review the following:

• Financial statements for the last three years including audit reports. 

• Minutes for all body corporate meetings for the last three years. 

• Current interim financial statements and approved budgets for the current year. 

• The long term maintenance plan. 

• A current insurance certificate for the building and all policy documents. 

• A history of insurance claims for the building. 

• Details of any repairs that have been carried out. 

• Information on any claim or proceedings related to leaks. 

• Details of body corporate levies.

• Details of body corporate rules. 

A good lawyer can help review all of the above documents to make sure that the body corporate is functioning well and that they have enough money to carry out their duties. This will help you avoid extra costs, stress and nasty surprises down the track.