Planning for Levies During
Design & Construction

Levies are often the cause of controversy and strata managers are frequently asked by owners corporations where costs can be cut. The bottom line is levies depend on the makeup of the individual building. A building where sustainability, maintenance and ongoing management has been well considered will have lower levies than developments that consider the operational costs as an afterthought. 

 The original owner has the most influence for ensuring that buildings operate sustainably and therefore have lower outgoings. They control this by ensuring the building is designed to be as efficient as possible from the ground up, through best practice in development practices, the adoption of smart technology, and early planning of ongoing operations and maintenance. Lani Zaubzer, our Greater Sydney General Manager, provides her tips on planning for levies during design and construction.

Energy Consumption – ensuring that energy consumption is minimised is one of the easiest ways to substantially keep levies on the low:

• Plant and equipment installed should have a high energy efficiency rating.
• The use of LED lighting, as well as sensors and/or timers, will have a big impact on electricity consumption (estimates have shown that such systems could reduce energy consumption in lighting by approximately 45%).
• The use of timers, and variable speed drives, carbon monoxide monitoring, 2-speed motors on common property assets such as irrigation systems, cooling towers, ventilation systems, and pumps.
• If there is an onsite pool, ensure energy-efficient technology is installed, set temperatures appropriately, optimise filtration times, and install a pool blanket to reduce heat evaporation.
• Use efficient lighting in lifts and ensure it’s installed with the latest energy-efficient technology that allows standby mode when not in use.
• Investing in smart building technology that can detect faults or deterioration in mechanical equipment like ventilators, pumps, lighting or escalators, to ensure they operate at the most efficient levels.
• Consider whether a renewable energy source, such as solar energy, is appropriate. The incoming owners corporation may even be able to sell power back to the national grid.
• Use temperature sensors to ensure heating and air-conditioning systems are only used when and where required.
• Ensure pumps, fans, motor rooms are adequately ventilated to reduce the consumption of electricity required to cool them.
• For community schemes, with private roads and vast parklands, consider solar-powered street lights and stormwater irrigation.

Landscaping – An expensive item for owners corporation can be the purchase of new plants when the original plants die. This is often due to the wrong type of plants being used or planted in the wrong position, or a lack of irrigation. Planting native bush and drought hardy plants will mitigate the risk of this. Also, consider the installation of rainwater tanks for irrigation systems to lower water utility bills.

Onsite Management –  Engage a facilities management expert early during the planning stages who can advise on the operational costs of garbage areas, cleaning, landscaping, onsite facilities, loading dock management, concierge, and building management costs. Someone with expertise in this area may be able to suggest changes that will assist with a decrease in cleaning and waste management costs. There also may be cost savings to share some services with buildings close by.

Budgeting – Ensure common property is captured in a registry and go out to tender early on big-ticket items such as cleaning, waste management, concierge, insurance, lift maintenance, facilities management, to ensure the budget is appropriately set in line with the strata plan. Careful planning early on, competitive tendering of these services, and lateral thinking may assist in keeping levies low.

Metering – In mixed-use developments, ensure plant and equipment is metered correctly so the right entities are paying for the right facilities as incorrect metering can artificially inflate levies.

Handover Documentation – Well penned, easy to follow handover documentation is essential to achieving efficiencies. Generic documents with cut and pasted clauses will not deliver good energy efficiency, maintenance, and performance results. The cost-efficiency of planned maintenance and repairs always outperforms reactive or emergency repairs and maintenance. Documentation should be written in a logical order and specify items such as; service level agreements, warranty periods, the scope of works required for contractors, a detailed preventative maintenance plan, and the potential impact on energy and water consumption if preventative maintenance isn’t followed.

S+ are experts in the formation of realistic outgoings, if you would like an obligation free discussion please leave us a message and we will call you back.