What is covered by strata fees?

When you buy a strata property, not only will you be living in an apartment or unit, you’ll also automatically become part of a body corporate or strata scheme. This means, among other things, that you’ll be required to pay strata fees. In return, the body corporate will handle the upkeep and management of the building on behalf of all the owners.

It seems quite simple, but it can be a little confusing trying to understand the amount and purpose of strata fees. Let’s unpack it a little.

What exactly are strata fees?

Strata fees are basically a share of the costs involved in running a building. Each body corporate sets a budget covering their projected costs for the year, and each lot owner is then charged a proportional share of that cost. These are strata fees. They cover the maintenance and repair of common property, as well as necessary short and long-term expenses for the building.

Strata fees are a positive factor in unit ownership

Naturally, the group of owners of a strata property are responsible for the management, repair or replacement of the common property in the scheme. The body corporate has no other way to raise money to cover building costs, meaning that strata fees are extremely important.

Proper upkeep of the building helps to protect each owner’s investment. Without proper upkeep, the building would quickly become unattractive and run-down, pose a health risk and lose appeal to potential buyers. Plus, it’s unpleasant to live in a building that is not maintained. Imagine overgrown gardens, cockroach-infested rooms, leaking rooves, peeling paint and dangerous walkways and you begin to have an idea of what strata fees are preventing. Body corporate levies ensure the building’s facilities and services are maintained to a high standard, and are an investment in the quality and longevity of your property.

As well, strata fees remove the burden of upkeep and maintenance for owners – a very attractive selling point for many apartment buyers. Owners can sit back and let someone else look after all the mundane details of maintaining a property.

How are strata fees calculated?

Strata fees can vary enormously between different buildings, and are dependent on a variety of different factors including the financial situation and commitments of the body corporate. Strata fees are determined by:

· The size and height of the building

· The facilities on offer

· The level of security

· The amount of water

· The amount of lighting

· The amount of parking

· The age of the building – older buildings often have higher levies, as they generally need more maintenance

Each owner’s individual levy is based on their contribution entitlement as well as their interest entitlements i.e. each owner’s percentage of the whole scheme. To put it more simply, the fees you pay are determined by the size of your unit and the assets it includes. For instance, the owners of a four-bedroom unit will pay more than the owners of a one-bedroom unit; likewise, the owners of a penthouse will pay higher levies than the owners of a ground-floor unit.

What happens to my fee payment?

All levy payments are deposited into the body corporate bank account by the body corporate committee. These combined funds are then spent in accordance with the previously set and approved budget to meet the expenses of the body corporate.

So, what exactly do my strata fees cover?

Strata fees are channelled into three main areas:

· The administrative fund

· The sinking fund

· Insurance

Obviously, all owners need to contribute to these expenses.

The administrative fund

This fund covers the day-to-day running costs of the body corporate, as well as general maintenance of the common property and building assets. As could be expected, this fund consumes a large proportion of body corporate fees.

The sinking fund

This fund covers repairs on the building and longer-term maintenance. It also funds projects such as roof replacement, painting or repairing driveways etc. These expenses tend to be larger than everyday maintenance, and often take place over a longer period of time.


The body corporate is legally responsible for the insurance of the building and the common property. Some bodies corporate will include the insurance premium in the administrative fund, while others are required to have it as a separate amount. Either way, this payment covers the building replacement and reinstatement insurance premium.

Strata fees may seem like a necessary evil, but, as can be seen above, they actually provide a whole host of benefits for lot owners. If you have any questions about the strata fees charged in your body corporate, contact Capitol BCA here: