If you’re venturing into property ownership and are considering going forth with a unit, townhouse or apartment purchase, owners corporation fees are a determinant that you must consider. But why do you pay these fees, and what do they provide for you?
Essentially, owners corporation are typically responsible for overseeing and managing all common areas, infrastructure and shared amenities e.g. pools/spas, gyms, cinemas etc. As an owner, you become part of the owners corporation and are responsible for handling proposed changes, general disputes and the collection of funds to cover costs incurred - a.k.a. owners corporation fees.
Savvy buyers take into consideration the current owners corporation fees and factor in potential increases when deciding whether or not a property is affordable. Yearly fees shoot up if there are a number of facilities available or if unexpected fees arise e.g. repairs made in response to weather damage to the building.
Owners corporation fees differ vastly and are generally determined by several factors:
The collective cost of all expenses are divided between the property owners, whether or not this fee is divided equally is dependent on the group managing the fees. There is also a “sinking cost fund” containing money set aside to cover the costs of future capital expenditure such as repairs - again, this may influence your overall owners corporation fees.
It’s wise to be aware of what sort of costs your building will incur before moving in therefore do adequate research and look at the breakdown of all fees.