As an owner of a unit, apartment or townhouse you must budget for fees that cover the everyday management and upkeep of the building.

No one likes to pay out extra fees unnecessarily, so we thought it would be a great idea to put together five recommendations on how you can reduce your strata fees.

1.Increase energy-efficiency

The cost of electricity, gas and other household fuels has risen in recent years and it’s a great idea for apartment buildings to investigate cutting costs by being energy efficient.

There are many initiatives available on the market that can help apartment buildings by:

Reducing water usage

Improving waste management

Increasing energy efficiency

Specialist energy and utility companies can evaluate your buildings energy and water consumption, the buildings size and complexity and the capacity of strata schemes to implement upgrades.

NABERS for Apartment buildings has recently been launched throughout Australia and enables large strata schemes to benchmark their total common property energy use against other similarly sized schemes.

While NABERS is currently only practical for large strata schemes, it is expected that the tracking of energy efficiency in all strata schemes, will become more widely adopted across the industry in the coming years.

2. Maintenance

Every year the strata committee and manager, budget what they’re going to spend in the coming year and estimate the total cost of outgoings. This is the budget which forms the basis of strata levies (or fees in some states).

Most existing strata schemes will have a framework to ensure their scheme is properly maintained including common property cleaning, gardening and preventative structural maintenance.

It’s important and necessary to factor into the budget routine maintenance that plays a role in property upkeep and protects the appearance and durability of the building.

E.g. If the common property of a building has a pool and the pool filter isn’t regularly serviced then chances are that it’s going to breakdown. Regular maintenance will prevent costly emergency repairs.

3.Insurance Premium

Insurance premiums for apartment buildings can be one of the most expensive items on any budget line. Insurance covers things like rebuild costs, machinery breakdown, public liability insurance etc. Whilst we don’t recommend skimping on your insurance, it’s a good idea to review and compare premiums every year to ensure that they are competitive with the market.

Regular common property maintenance, will ensure that insurance claims are kept to unexpected and sudden events, which will determine that the insurance premium is kept at an acceptable level. A strata scheme with regular insurance claims, will result in sizeable premium increases at the next renewal and may place unexpected pressure on the budget.

The majority of strata insurance claims emanate from water damage, so it is prudent for a strata scheme to adequately service and maintain common property pipes, membranes, roofs and other areas of water ingress to prevent strata bill hikes.

4.Regular Onsite Services

This refers to onsite contracted services like lawn maintenance, cleaning, lift servicing, fire and safety testing as well as pool maintenance. Reviewing contracts yearly is a good way to ensure that these service providers remain competitive according to the market.

If strata owners are unhappy with the service quality of tradespeople on common property, then prior to the next AGM is an opportune time to inform your strata manager, so they can potentially organise a suitably qualified replacement, by obtaining quotes prior to the AGM.

5.Sinking fund (or Maintenance Fund)

The money in a sinking fund can be spent on multiple items relating to the common property. The sinking fund can be spent on anticipated capital expenditure, or non-recurrent items. In a large strata scheme, this often includes one-off items, such as painting the building or major structural repairs to common property.

The sinking fund or maintenance fund is often accompanied by a maintenance plan, which dictates where the sinking fund should best be spent and aims to limit major expenditure on repairs that should have been better maintained.

Are you accepting strata spending or fee hikes without understanding their basis?

Ace Body Corporate Management has 23+ years’ experience in the Strata industry and is more than happy to provide you with professional advice, in a timely manner.

Get in touch 1300 792 509 or email headoffice@acebodycorp.com.au

If you would like to receive a free- no obligation quote for the professional management of your strata scheme, please fill out the form at this link https://acebodycorp.com.au/request-management-quote/.

Ace has a local and dedicated manager in every state and territory of Australia that can assist