Owners corporation fees explained: how your share is worked out

An owners corporation fee is your share of the budget the owners corporation needs to run the building for the year. It is set at the annual general meeting, and your share is worked out from your lot liability — the figure recorded on the plan of subdivision — not from the size or market value of your apartment.

What the annual budget covers

• Insurance for the buildings and public liability for the common property
• Cleaning and gardening of common areas
• Electricity and water for common property, lifts and shared services
• Routine maintenance and repairs to common property
• Management fees, audit and compliance costs
• Contributions to the maintenance fund for future major works

Why two similar apartments can pay different fees

Because the plan of subdivision, not the floor area, decides. Lot liability is fixed when the land is subdivided, and it does not always track apartment size — a smaller apartment on a lower floor can carry a higher liability than a larger one above it. Two different figures matter here, and they are often confused:

• Lot entitlement — your share of ownership of the common property, and the basis of your voting rights.
• Lot liability — your share of the owners corporation’s expenses, and the basis of your fees.

Both are set out on the plan of subdivision, and changing either needs a unanimous resolution of the owners corporation.

Fees and special levies are not the same thing

Annual fees fund the year’s running costs and the maintenance fund. A special levy is a one-off raise, usually for a specific project or an unbudgeted repair — a lift failure, cladding work, or a defect claim that has to be acted on now. A building that needs special levies every year is usually a sign the maintenance fund has been under-funded rather than a sign the budget is being mismanaged today.

Where the maintenance fund fits

The maintenance fund is money set aside for future repair and replacement of common property — the lift, the roof, the facade, fire systems. It is funded from the fees owners pay each year, it is reported on at the annual general meeting, and its balance is what stands between a committee and an emergency special levy.

How to read a fee notice

A useful fee notice tells you the total budget, your lot liability, your share, the period covered, and what part of it is going to the maintenance fund. If it only shows an amount and a due date, ask for the budget it came from — you are entitled to see how the figure was reached.

If the amount looks wrong

Start with the manager and the committee: ask for the budget, the plan of subdivision and the calculation. Most fee queries are a records question, not a dispute. If it cannot be resolved, the Act sets out how fee disputes are handled and VCAT can order that an amount be paid or adjusted. Owners corporation fees are a debt owed by the lot owner, so arrears do not simply wait indefinitely.

Where to go next

More definitions are in the owners corporation glossary; the questions owners ask most are answered on resources. If your committee wants a fixed annual fee per lot quoted against your building, get in touch.