Why That ‘Low Body Corporate Fee’ Might Be a Ticking Time Bomb

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When buying an apartment or townhouse in Victoria, low owners corporation (OC) fees can seem like a bonus. But sometimes, that bargain fee is actually a red flag — hiding years of deferred maintenance, a non-functioning committee, or a building teetering on the edge of major costs.

As David Dawn, Licensed Conveyancer at Victorian Property Settlements, warns:

“If something seems too good to be true in strata, it probably is. Cheap fees often mean cheap management — and costly surprises.”

What Do Body Corporate Fees Actually Cover?

In Victoria, owners corporations (also known as body corporates) are responsible for managing and maintaining common property — which can include:

  • External walls and roofs

  • Shared driveways and gardens

  • Internal hallways, stairs, and foyers

  • Fire systems and building insurance

Annual fees are collected to cover both day-to-day administration (like insurance and compliance) and long-term maintenance (repairs, replacements, future upgrades).

Why Low Fees Can Be Dangerous

Many buyers fall into the trap of comparing OC fees like mobile phone bills — lower must be better. But in reality, fees should reflect the true cost of keeping the building safe, compliant, and functional. If they don’t, something’s being left out.

Here’s what low fees often mean:

  • No long-term maintenance plan

  • Fire systems, lifts, or roofing left unrepaired

  • Insurance may be underinsured or lapsed

  • No professional manager in place

  • Buildings left non-compliant with cladding or pool barrier laws

  • Major works will be funded by a sudden special levy

The Silent Risk: Deferred Maintenance

A building that looks fine at inspection time might be hiding decades of neglect. You may only discover the real problems when:

  • The roof leaks after heavy rain

  • Council orders urgent works

  • A fire inspection reveals faults

  • You get hit with a $20,000+ special levy as a new owner

This is especially common in buildings built before 2010, where a "self-managed" OC has kept levies minimal and done the bare minimum to stay afloat.

How to Protect Yourself Before You Buy

Before signing, always ask your conveyancer to review:

  • The full Owners Corporation Certificate

  • The last three years of financial statements

  • Any defect notices or litigation disclosures

  • Evidence of a functioning Maintenance Plan (required for larger schemes)

If there's a lack of sinking fund, no recent AGM minutes, or outstanding defects — you should proceed with extreme caution.

Case Study: The Cracking Facade in Cranbourne

A client recently came to us after purchasing a two-storey townhouse in a tidy but ageing development in Cranbourne. The body corporate fees were just $400 a year — far lower than nearby properties.

Within 6 months, the OC announced urgent façade repairs. Engineers had been raising issues for years, but no maintenance fund had been built up.

Result: a $14,000 levy per unit owner — and no ability to sell until paid.

Don’t Be Fooled by a Bargain

Low OC fees are not a sign of good value. They're often a symptom of neglect. Victorian law now requires more transparency in OC records, but not every agent or manager complies. That’s why a proper review matters.

At Victorian Property Settlements, we flag these traps before you sign.

Conclusion

If you're buying into an owners corporation, don’t be seduced by the small annual fee on the sales brochure. Ask what it doesn’t include.
And if you’re not sure — get advice from a professional.