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Topic # 242509 1-Nov-2018 07:21
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In my quest to find somewhere to live (as per the other thread) I've also been looking at apartments. However a few I've come across have Body Corporate fees. I know next to nothing about these fees, but what do they cover? Water? Rates? Rubbish collection? Repairs to the property?
Note that I would be purchasing an apartment so would like to know what they cover. Also how much are they (typically)? Are they paid per year? Monthly?
My Dad (a former real estate agent) told me to "stay away" from any place with these fees.
Any feedback/experiences appreciated, thanks :)

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  Reply # 2117656 1-Nov-2018 07:59
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There is a good guide to NZ BC fees https://www.apartmentspecialists.co.nz/much-body-corporate-fee/

 

Not just apartment buildings have BC fees, even a mall subset of houses that share communal area can have a BC. Fees are normally made clear when buying an apartment. They also range in price for what facilities your building has eg lap pool. 

 

Update - broken link.


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  Reply # 2117657 1-Nov-2018 08:00
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let me Google that for you :)

 

http://www.cab.org.nz/vat/hle/ho/Pages/BodyCorporate.aspx

 

John





Ex JohnR VodafoneNZ 17 years 4 days

 
 
 
 


cisconz
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  Reply # 2117660 1-Nov-2018 08:11
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I was speaking to a client and in their new building that just got built. BC fees for 2 Bed, 2 Bath, 2 Carpark was $3.5k pa + Rates and Utilities.

 

That included rent insurance.





Hmmmm


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  Reply # 2117661 1-Nov-2018 08:23
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My experience is from a few years ago, as an owner of a terrace house in a block of about 50 identical units.

 

Fees were set annually, voted as a resolution at the AGM of home owners, based on a recommendation from the body corp committee. The committee was about 5 people elected at the same body corp annual meeting. The fees rose every year, but not usually by a huge amount.

 

 

 

Fees included anything that needed to be shared across all the units, from memory it was things like:

 

- house insurance on all 50 units (this was always the largest item by a long way)

 

- maintenance on the gates into the complex

 

- gardening of the shared spaces

 

- maintenance on the internal complex roads

 

- admin fees for the company running the body corp (which I always thought were reasonable)

 

 

 

For us, the fees were about $3500 per year, payable in six monthly installments.

 

 

 

 


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  Reply # 2117666 1-Nov-2018 08:47
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On some buildings the BC fees do include water and rubbish. Have also come across a building that has hot water included in the BC fees. (central hot water system that supplies the whole building, running costs included in the BC fees)

Also check out the situation for each building in relation to UFB. And how electricity and water billing work. Sometimes you are locked into overpriced plans that you can only buy from the body corporate.





sxz

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  Reply # 2117676 1-Nov-2018 09:06
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Don't think they are a waste of money, but absolutely, check them out before you buy so you know what you are getting into.

 

The fess (usually) aren't just wasted - they are spent on maintenance of common property.  Driveways, roof, exterior walls, pools, gardens etc.  They also usually cover insurance.  Larger developments may have a manager who gets paid.

 

My grandparents have an apartment that pays nearly $20k per annum in BC fees.  But for that, their apartment complex is immaculate (even though its 50 years old).  It is repainted every 5-7 years, the roof has recently been rewaterproofed, the grounds and pool are immaculate, and its in much better condition than many of the neighbouring apartments that have cheaped out.  The BC has funds to maintain, repair and improve.

 

If the BC fees are too low - the BC will not have enough funds to properly maintain your asset.

 

Also - don't assume that buying your own property wont have maintenance costs :)


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  Reply # 2117681 1-Nov-2018 09:15
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If you are thinking of apartment living you can't stay away from those fees. If there is an apartment complex that doesn't have fees then I would stay away as who is paying for the maintenance of the common areas? An apartment complex that has no maintenance of common areas is not going to be viewed as one that people will want to buy into. There is also the law - the Unit Title Act 2010 - that requires long term maintenance plans amongst other thing s to be in place - which must be funded.

 

So body corporate fees are a fact of life if you live in an apartment with a unit title however the important thing to find out before buying is whether the body corporate is working effectively, what the fees are etc. Asking for copies of minutes of the BC meetings is a good check as a part of this.


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  Reply # 2117722 1-Nov-2018 10:12
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The unexpected costs can be the killer. I know people in Wellington facing extra costs for earthquake strengthening as engineers become more conservative or who've found that their building is a leaker.

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  Reply # 2117736 1-Nov-2018 10:47
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morrisk:

 

There is also the law - the Unit Title Act 2010 - that requires long term maintenance plans amongst other thing s to be in place - which must be funded.

 

 

My understanding of the Unit Titles Act is that it requires the body corporate to have a long term maintenance plan, but it is not required to be funded. This is why it's very important to review both the body corporate's long term maintenance plan and balance sheet before purchasing a unit titled property. It is also a good idea to take a look at minutes from recent body corporate meetings.

 

Prior to the change in government Nikki Kaye was doing some work with a view towards tightening up the Unit Titles Act, but I'm not sure where that got to.


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  Reply # 2117738 1-Nov-2018 10:51
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yeah nothing wrong with BC.

 

I lived in apartment for 12 years (paying from 2k to 2.6k in BC fees) in AKL CBD and had no issues as long as there're short/long term funds set-up properly. we were still required to pay special levy for roof resealing once but it was not that much (1k per unit as far as I remember).

 

Currently living in town house complex with BC (2.2k), and again, looking at the short/long maintenance plans, everything is under control. and 60% of fees is for insurance + 20% for complex work (gardens, road, etc).





helping others at evgenyk.nz


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  Reply # 2117749 1-Nov-2018 10:59
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Generally Real Estate agents will always promote single-dwelling freehold properties because this type of property ownership is the least complex and most buyers easily understand the issues around purchase.  Where you buy any property where there are shared resources involved, the Body Corporate is the legal entity involved in common-interest property maintenance and enhancement.

 

All the Body Corps I have been involved with operate on a basis of one unit one vote.  A unit can be one week (timeshare) or one apartment etc.  Unlike a single-dwelling freehold property, when buying into a property run by a Body Corp you are buying into a property where you you control only the inside.  For example access to your front door is over common ground and usually the Body Corp has control over exterior building maintenance such as walls, painting, windows etc.  The major downside to Body Corps is that decisions taken are by majority vote, so a small minority can have effective control when many votes are not cast (because they were not at the meeting and did not grant a proxy).

 

The key things to look for:  How many units make up the BC (fewer = better)?  How many committee members live on the property (preferably all, most = better, Chairperson = best)?  If you make an offer you will usually include a title-search-validation as a condition.  Ensure your legal professional understands what a Body Corp is and reports to you their assessment of Body Corp performance as part of their title-search-validation.





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OldGeek.


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  Reply # 2117839 1-Nov-2018 13:39
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Bung: The unexpected costs can be the killer. I know people in Wellington facing extra costs for earthquake strengthening as engineers become more conservative or who've found that their building is a leaker.

 

The risk of this increases with building age and in properties with fewer units.

 

WCS is an older apartment building with a small number of units, that needs substantial work.  If have friends in this situation in Welly and it's looking ruinous for them. 

 

BCS is a modern building with a large number of units.





Mike

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  Reply # 2117967 1-Nov-2018 16:01
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I don't regard BC as a bad thing.  Typically it includes external maintenance, and by having mandated payments ensures all of the units in a building/complex are kept to a decent (external) standard.

 

Having one building owner ignore maintenance can drag/down the look and feel of all other units.


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  Reply # 2117971 1-Nov-2018 16:11
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There is another risk in buying apartments (well, any dwelling), and that is hidden defects.

 

We were about to pull the trigger on an apartment in Napier, but doing due diligence we discovered there was a high court case going for leaky building and other defects, and that the possible downside quickly could amount to the same as we were going to pay for the apartment.

 

Another apartment building in Napier with the same problem, where the real estate agent was fined for not disclosing everything about the apartment.

 

A measly $5000 fine for not disclosing defects that could run in the hundreds of thousands doesn't seem like a big deterrent for the agent, to be honest.





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  Reply # 2117973 1-Nov-2018 16:16
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Bung: The unexpected costs can be the killer. I know people in Wellington facing extra costs for earthquake strengthening as engineers become more conservative or who've found that their building is a leaker.


And leaky building syndrome.




Swype on iOS is detrimental to accurate typing. Apologies in advance.


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