Management Fee – Maintenance Fee of Apartments

What is the management fee / body corporate fee / service charge / maintenance fee?

When you take any apartment complex or gated community for that matter, it is likely that there are common amenities and other facilities that require third party involvement for which a cost incurs. This cost is usually divided by the number of units in the complex.

For example, the management fee of a complex comes into play when you consider the following:

  1. Security in the premises
  2. Garbage collection
  3. Lift Maintenance
  4. Pool Maintenance
  5. Generator Maintenance
  6. Common Area utility bills
  7. Sinking Fund
  8. Caretaker, plumber, electrician salaries

In order to determine the cost of the management fee, the cost of the above need to tabulated first and then divided by the number of units in the complex. In some case, the entire management is outsourced to a property management company and their fee is also added when budgeting.

Who pays the management fee when the unit is rented out?

In general, the owner pays the management fee whether it’s rented or not. This is an international phenomena and quite rightly so. The reason why the owner pays the management fee is because it’s the owner who is on the committee along with the rest of the residents and the tenant has no say when deciding on the management fee during the Annual General Meetings.

It is true that the tenant enjoys the facilities of the complex but it’s also wise to bundle that amount into the rent when quoting the rent. Most landlords who are smart investors budget all of this before arriving at the rent.

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