Tips to Minimise Levies

How to keep your building levies in check

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. However, an owners corporation that prioritises preventative maintenance, monitoring of energy consumption, and practices good budget management will be able to control levies better.

Associate Director, Lani Zaubzer, provides her tips on how to manage levies.

Revise your lighting

Install LED lighting, as well as sensors and/or timers, as this will have a big impact on electricity consumption (estimates have shown that such systems could reduce energy consumption in lighting by approximately 45%). 

Follow a preventative maintenance regime

Follow a proactive maintenance regime for all the assets. The cost-efficiency of planned maintenance and repairs always outperforms reactive or emergency repairs and maintenance.

Replace old equipment

Replace old plant and equipment with a high energy efficiency rating equipment. In addition, smart building technology can also detect faults or deterioration in mechanical equipment like ventilators, pumps, lighting or escalators, to ensure they operate at the most efficient levels.

Only in use when necessary

Install 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 so plant and equipment is only on when required.

Pool management

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. 

Landscaping

An expensive item for owners corporations 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. Replacing plants with native bush and drought hardy plants will lessen the frequency to replace dying plants.

Renewable energy sources

Consider renewable energy sources such as PV Solar. Whether solar panels will work for your apartment building depends on several factors such as roof space and positioning. The installation of small scale PV solar may receive a rebate through the Small-scale Renewable Energy Scheme (SRES). 

For community schemes with private roads and vast parklands, solar-powered street lights may be a good option. Solar lights can also be used to light pathways to entrances. 

Rainwater tanks

Consider the installation of rainwater tanks for irrigation systems which will reduce water usage for common property.

Encourage owners to save water

Buildings constructed prior to 2014 are likely to have one master water metre which is billed to the owners corporation for units as well as common property. Spend time educating and promoting smart water consumption to residents. 

Check for water leakages

A leaking tap or broken water pipe wastes water and energy. Left unattended, a dripping faucet wastes as much as one litre per hour. Check that all systems are running as efficiently as possible. Sydney Water also runs a WaterFix® Strata program that may be relevant to your building. For more information on saving water, read our article. 

Ensure residents know the rules

Ensure your residents have a copy of the by-laws and they understand the rules. By-law breaches are an extra expense for owners corporations that can be avoided.

Getting on top of defects early

Identify defects early in new buildings to save on associated legal fees. Report defects to the original builder and request that they attend the site to rectify them as soon as possible.

Proactive financial management

It makes a difference in a building’s financial status when they have a treasurer that takes an active interest in the building’s finances and has a good system of checks and balances.

Competitive quotes

When there isn’t a service agreement in place, it pays to get more than one quote before going ahead with any maintenance and repair work. But remember, cheaper is not always best. Under the new 2023 amendments to the legislation, all owners corporations, regardless of size, are required to obtain two quotes from businesses independent from each other, when expenditures exceed $30,000. Read more about the recent 2023 strata amendments.

Negotiating service contracts

The largest items of expenditure are items such as; concierge services, building managers, cleaning services, insurance, swimming pool & spa heating and maintenance, electricity, and lift maintenance. Careful planning, competitive tendering of services or negotiation of existing service contracts, and lateral thinking may assist in reducing some of these costs. Sometimes sharing services and contracts for security, maintenance and cleaning with nearby buildings can save on costs.

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.