Owners corporation fees on the minds of Increasing numbers of people as they make the transition from traditional suburban homes to apartment-style accommodation.

But a major property spokesman says prospective apartment buyers will have nothing to fear if they do their homework and understand how an owners corporation – formerly known as the body corporate – works.

“It’s best to start the sinking fund from day one with incremental financial additions to the fund so there are no nasty financial surprises.”

• Hot housing trend: ‘Speak to my buyers’ agent’
• It’s not a flat, it’s an apartment
• Blame ‘The Block’: We’re rebuilding, not moving

Australand’s Victorian residential general manager, Rob Pradolin, says the owners corporation, which usually covers maintenance, shared amenities and security at an apartment building or medium density housing cluster, basically exists to look after the common property interests of apartment/unit/flat owners.

Owners corporation fees, which are mandatory for owners in dwellings in shared building arrangements in all states and territories, can range from $1500 to $30,000 a year and more, depending on the style of accommodation and the services provided. For example, at the lower end they can cover the upkeep of shared lawns while at the higher end they may pay for services like pools, gyms and security guards.

“We are finding people are more accepting of owners corporation set-ups if they are done properly and cover issues that people value, for example maintaining front yards to achieve a consistent look because people are time poor,’’ Mr Pradolin says.

“There is a perception that owners corporation is a negative in relation to medium density housing, however there are number of things about that are positive. Structural housing insurance is cheaper because you buy insurance in bulk as part of the owners corporation.’’

Mr Pradolin says apartment residents may also be able to obtain cheaper electricity in future because of proposed “embedded networks opportunities’’, which will allow the owners corporation to purchase it in bulk.

“We are exploring things like this where owners corporations can add value,’’ Mr Pradolin says.

But he warns that those who are part of an owners corporation need to take a long-term view and contribute small amounts over time to a “sinking fund’’, which is usually set up by the corporation to fund major structural or repair works in a shared building.

“They can establish a sinking fund which stipulates that the building is painted every 10 years,’’ Mr Pradolin says. “It’s best to start the sinking fund from day one with incremental financial additions to the fund so there are no nasty financial surprises when it comes to any emergency or planned works.’’

Mr Pradolin also advises apartment owners to become active members of the owners corporation committee which runs the shared set-up.

He says it’s a great way to meet your neighbours and ensure your voice is heard when important matters concerning your living environment are considered.