Nobody wants their Owners Corporation fees to go up.

For committee members, keeping levies affordable can feel like an obvious sign of good financial management.

Lower costs. Happy owners. Job done.

But are low levies always something to celebrate?

Not necessarily.

Sometimes, keeping levies artificially low today simply means someone else pays more tomorrow.

Low Isn’t The Same As Sustainable

An Owners Corporation needs enough income to meet its obligations — not just this year, but over the longer term.

That includes everyday operating expenses such as insurance, maintenance, utilities and management, as well as preparing for larger costs that will inevitably arise as shared assets age.

If levies are consistently set below what the community genuinely needs, the shortfall doesn’t disappear.

Maintenance may be deferred. Reserves may be inadequate. Unexpected expenditure may require a special levy.

In other words, a low levy can look good on paper while masking financial pressure underneath.

So, What Should Committees Aim For?

The goal shouldn’t be the lowest possible levy, nor should it be collecting more from owners than the Owners Corporation reasonably requires.

Good financial stewardship sits somewhere in between.

It means understanding what it genuinely costs to operate the community, considering what will need to be funded in future, and setting contributions accordingly.

A useful principle is “user pays”.

Owners contributing today aren’t simply paying for today’s expenses. They are also using assets that are gradually wearing out such as the roads, gates, landscaping, recreational facilities, building systems and other shared infrastructure that sits within their owners corporation.

Contributing progressively towards their eventual repair or replacement helps spread that cost more fairly across the owners who benefit from those assets over time.

The Annual Budget Is Only Part Of The Picture

A balanced annual budget can tell a committee whether expected income and expenditure broadly align.

But it doesn’t necessarily tell you whether the Owners Corporation is financially healthy.

Committees should also be looking at:

• Arrears and how effectively they are being managed;
• Actual expenditure against budget;
• Cash flow throughout the year;
• Upcoming maintenance and capital expenditure; and
• Whether reserves are keeping pace with future obligations.

These pieces together provide a much clearer picture than the levy figure alone.

Five Questions Worth Asking

At your next committee meeting, consider asking:

1. Are our levies based on what the community genuinely needs or what we think owners will accept?
2. Are we adequately funding future maintenance and replacement of shared assets?
3. What are our current arrears telling us about cash flow and financial pressure?
4. Are there foreseeable expenses ahead that haven’t been adequately provided for?
5. If an owner asked why their levies are what they are, could we clearly explain the answer?

That last question matters.

Because good financial management isn’t only about the numbers. It’s also about being able to demonstrate the thinking behind them.

The Better Measure

Keeping levies affordable matters.

But affordable and artificially low aren’t the same thing.

A financially responsible committee isn’t necessarily the one that can say, “We kept fees down again this year.”

It may be the one that can say:

“We understand what our community costs to run, we’re preparing for what lies ahead, and we can explain how today’s contributions support both.”

That’s a much stronger measure of financial stewardship.