1800 808 991
Request a Quote



If you own a residential unit, you will undoubtedly be paying body corporate fees. People who are new to the experience of owning a strata unit are sometimes mystified as to why they are required to pay regular fee instalments to the body corporate.

It is similar to owning your own home. You are required to pay for the cost of maintaining a private house and all the other costs associated with living there. It is no different with a strata unit. While most people understand this, what sometimes confuses them is the way bodies corporate collect their funds, the names given to the funds and the classification of expenses within the funds.

In most states in Australia there is a legislative requirement for bodies corporate to maintain two  funds.

-        An administrative fund and,

-        A sinking fund (sometimes called a capital works fund, maintenance fund or reserve fund)

Both of these funds collect money in relation to the common property associated with the complex. The common property comprises all the areas and surfaces of the complex not forming part of a privately owned lot (for example, your residential apartment). Common property comprises the shared areas of the complex and generally includes internal stairs, passageways, plant rooms, car parking areas, lifts etc. Externally the common property frequently includes shared driveways, boundary fences, pathways and stairs, light fittings, swimming pools and tennis courts.

The administrative fund is used to collect money for administrative type expenses associated with the common property and these include:

-        Insurance costs

-        Body corporate management fees

-        Power and water expenses

-        Minor building repairs and maintenance

-        Testing of the swimming pool

-        Cleaning and gardening costs

-        Fire equipment testing

-        Pest inspections

The sinking fund is used to collect money for major maintenance, replacement and repair expenses associated with the common property, such as:

-        Painting the exterior façade and internal shared areas

-        Replacing the roof sheeting, gutters and downpipes

-        Repairing damaged retaining walls, paving, etc.

-        Replacing the boundary fences

-        Replacing the light fittings and fire protection equipment

-        Replacing the pool finish and equipment

-        Replacing the tennis court fencing and ground surfaces

-        Replacing lift components

In some Strata complexes, each lot pays the same amount. In other complexes there may be large differences paid between lots. This is because strata complexes are similar to local councils in the way contributions towards costs are levied. Councils work out how much money they need to raise at the end of each year, then they apportion those costs to each ratepayer based on the value of their property. Bodies corporate on the other hand, use what is known as a lot entitlement schedule. This forms part of the title documentation for the scheme. Each lot is assigned a certain number of entitlements, the total for all lots equalling 100%. Those entitlements may be equal, they may all be different, or there may be a combination of some being equal and others being higher or lower. It is the developer who sets the lot entitlement scheme, before the lots are sold.

For more information relating to lot entitlements in Queensland, please click here.

For information relating to sinking fund, capital works or maintenance forecasts click here