Body Corporate levies too high

Help, my Body Corporate Fees have surprisingly jumped

It is quite common for owners to get a surprise when they open an instalment letter and discover that their Body Corporate fees have risen.  The possible reasons are described below.

Recent Body Corporate General Meeting

Body Corporate instalments can only be set at general meetings of the Body Corporate.  Check your recent correspondence and look for motions that identify new instalments.  The amount of regular instalments (eg. quarterly) will usually be decided at an Annual General Meeting (AGM).  A special instalment may have been decided at an AGM or possibly an Extraordinary General Meeting (EGM).  The reason for substantial increases are usually noted in the documentation.

Reasons for Special Instalments

The most common reasons for Special Instalments are –

  • To make a correction to deficits in the funds of the Body Corporate
  • To undertake a signficant capital project of the Body Corporate
Reasons for substantial increases in Regular Instalments

This is usually caused by a substantial increase over the previous year in one or more of the significant Body Corporate expenses.  Look for –

  • Substantial increase in Body Corporate Manager fees
  • Substantial increase in Body Corporate insurance
  • Substantial increase in Body Corporate utility charges (gas, electricity, water etc)
Body Corporate Manager Fees

The fees that the Body Corporate Manager charges to administer your Body Corporate are set at your Annual General Meeting.  In Queensland, there must be an administration contract agreed by the Body Corporate.  Usually for small Bodies Corporate (less than 6 lots) this must be agreed yearly.  For more than six lots, the contract can be for up to three years.  Review the contract and seek similar quotations from alternate Body Corporate Managers.

Insurance

Insurance premiums can jump substantially.  This can be in response to global events such as a world finacial crisis.  It could be a more local reaction as a response to increased disasters in your area such as flooding or perhaps the insurance policy coverage has been changed.  Your Body Corporate Manager should be able to give guidance.

Utility Charges

Some Bodies Corporate incur utility charges.  Utility charges have been increasing substantially in recent years.  However, another possibility is excessive usage or leakage.  Talk to the Committee or Body Corporate Manager about the recent history of usage and look for any anomaly.  If there is an anomaly, further onsite investigation will be required.

Talk to a lot owner who attended the meeting

Your general meeting minutes will show who attended the meeting that agreed the instalments could be increased.  The meeting must have been attended by a quorum of lot owners otherwise the meeting is invalid.  Check with a lot owner who attended the meeting as sometimes they have greater knowledge of the background of the increase.

Next steps

If enough lot owners share your concern, you could consider holding an Extraordinary General Meeting to address the issue.  If there is no support for your concern, but you remain convinced that there is an injustice, then you could consider lodging an issue with your state’s dispute resolution service.

Tracsafe can help

Tracasfe can help reduce fees where Bodies Corporate are interested in ‘self managing’ or ‘partially managing’ their own affairs.  Alternatively, consider switching to Tracasfe as your full service Body Corporate Manager.  Read our case study of how the Tracsafe approach endeavours to keep fees low.
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