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Imagine you’ve interviewed for a job and the call comes: “you got the gig … we’re sending over a 25-year contract.” Twenty-five years? That’s half the length of a working life. However, believe it or not, there are strata contracts for that long in Australia today. First, let’s backtrack a little. Until the new …
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Jimmy, true it is that in Queensland 25 year caretakers agreements are standard for strata schemes. I see a lot of them.
If I can share this information.
The developers sell them. Buyers are willing to pay big money for a 25 year cash flow with CPI increases annually. Typically, the fee is $1,000 to $1,200 + GST per lot per annum. That’s $275 to $330 per quarter in terms of a component of strata levies. This is for residential strata schemes. It covers cleaning the common areas including the garbage bin areas, the gardening, and minor maintenance.
But the flipside is that the strata management agreements in Queensland are three year agreements for strata schemes. Strata management fees are modest. Typically the fee is $120 + GST per annum. That’s $33 per quarter. This is for issuing levy notices, collecting levies, holding AGMs and EGMs and preparing financial accounts.
In NSW, strata managers charge a lot more than strata managers in Queensland, and do more.. In contrast, caretakers are cheaper – they are usually engaged annually (or are on continuing contracts terminable by one year or less notice). Their fees are about $700 per annum per lot which is less than in Queensland.
My analysis leads me to conclude that the caretaker’s fees in Queensland are about 35% higher than they would be if the caretakers agreements were 3 years renewable instead of 25 years. That’s about $400 per annum.