HOW DO THE COSTS OF RUNNING THE SCHEME GET PAID?
The costs incurred in running a scheme have to be paid by the body corporate. These costs include:
- Rates, taxes and other charges
- Insurance premiums
- Repairs and maintenance of the common property
- Wages and salaries of cleaners and other staff
- Water and electricity used on the common property
- Provision of security or other services
These costs are paid by individual owners in the form of a monthly levy, calculated in accordance with the Participation Quota or nominated value for their unit. The Act requires an owner who has the benefit of an exclusive use area to make an extra contribution to cover rates and taxes, insurance and maintenance of the exclusive use area. This applies to all registered exclusive use areas and to exclusive use areas created under the rules of the 1971 Act, but may not apply to those created under the rules of the current Act.
In addition to the above, the body corporate is obliged to establish a fund for future maintenance and unexpected expenses. The size of this fund is not specified in the Act, but a wise body corporate will make sure that the fund is adequate for the size of the scheme and the present condition of the property. If the fund becomes excessively large, the Act does not allow any part of the excess to be refunded. However, the excess could be used to subsidise future levies or to improve the common property.