One of the most significant barriers to entry for would-be home buyers in the additional cost
imposed on them in the form of body corporate fees and levies when they choose to enter a
community housing scheme such as an apartment or townhouse development. These fees
need to be calculated as part of future housing expenses, and therefore impact on ability
to service loans and therefore the purchase price a buyer is able to pay. Similarly, for those
seeking to enter the rental market, higher body corporate costs are passed on to tenants
as increased rent. This in turn impacts on renters’ savings and their ability to accumulate a
deposit for their own property purchase.
The fees paid to Management Rights holders in community housing schemes are largely
hidden from public view and public debate. However, these fees and charges represent the bulk of costs for many bodies corporate, and they should be considered as part of the “affordable housing” equation, whether for first-time buyers or renters.
Management rights is the name given to a business conducted for a strata scheme by a contractor who holds the rights to provide caretaking services and offer a letting service for lots within the scheme. Typically, the manager or caretaker lives on-site at the scheme. Duties tend to include general maintenance and cleaning of the scheme. The manager will often have exclusive rights to conduct a letting business onsite.
There are estimated to be over 4,0001 such businesses in Queensland. Unfortunately, many new owners of lots in community house schemes find themselves
saddled with very high and escalating costs to service Management Rights contracts put in
place before they joined the body corporate.
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