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Not long ago I read your article in the SMH about how to determine what a correct levy would be, based on the value of the property. (e.g., 5% of a 700,000 unit) I can’t find it searching on your Flatchat forum, and wondered if you could somehow guide me to it please?
Thanks for your help.
Pat Pamphlett
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Not answering the question exactly… I doubt that the value of the unit is likely to be a very good guide. Some OCs will have lots of common property requiring expensive maintenance, others will have little common property or it might be set up to be low maintenance. Insurance is linked to value but also to risk which could vary. Management services might be relatively cheap with an active executive committee but more expensive with almost everything handed over to a managing agent. Some will need to be building up a large sinking fund to cover expensive maintenance responsibilities well into the future, others will have a comfortable reserve and no looming expenses.
As PeterC said, it depends a lot on the facilities that a building has plus the number of units that share them. For instance, apartment blocks converted from hotels often have fewer units per lift that purpose built flats – and sharing the considerable expense of additional lift maintenance will push levies up.
But judging by a discussion we had on this website a while ago, in apartment blocks with facilities, annual levies should range between 0.7 and 1.2 percent of the value of the apartment. Townhouses and apartments with no shared facilities would be about 0.4 to 0.6 percent. That’s not to say that these are hard and fast rules but if your levies are a lot higher or a lot lower than this, you should ask why that is – too low can be just as bad as too high because it often means that not enough is being spent on the building so the value of your property is being damaged in the long term.
Peter is right that you can’t really fix the levies to the values of the property but if your levies are in the middle of the very broad ranges quoted – and remember it’s referring to annual levies – the figures should not be a cause for alarm in themselves.
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