When you buy an apartment, townhouse, or unit with a unit title, you automatically become a member of a body corporate — the legal entity that governs shared ownership of common areas. Body corporate fees (levies) cover the costs of maintaining and insuring those shared areas, and can range from a few hundred dollars to tens of thousands of dollars per year.
Body corporate fees in NZ typically range from $3,000–$15,000+ per year, depending on building age, size, amenities, and condition. They cover building insurance, maintenance, management, and contribute to the Long Term Maintenance Fund (LTMF). Always request at least 3 years of body corporate minutes and financial statements before purchasing a unit title property — special levies (one-off large costs) can run to $50,000+ per unit for major remediation.
What Body Corporate Fees Cover
Annual body corporate levies typically fund:
- Building insurance — the body corporate insures the building structure; you insure your contents separately
- Body corporate management fees — the professional manager’s fees for administration, accounts, and meetings
- Maintenance and repairs — cleaning, gardening, lift servicing, common area lighting, security
- Long Term Maintenance Fund (LTMF) — a sinking fund for future capital expenditure (roof, cladding, lift replacement)
- Utilities for common areas — electricity for lifts, lobbies, and shared lighting
- Insurance excesses — a reserve for insurance excesses on body corporate claims
Long Term Maintenance Fund (LTMF)
Under the Unit Titles Act, all body corporates must have a Long Term Maintenance Fund and a 10-year maintenance plan. The LTMF collects regular contributions to fund future capital expenditure without the need for sudden special levies.
Red flag: A building with a low LTMF balance and a large scheduled maintenance item (e.g. recladding due in 3 years) will almost certainly hit owners with a special levy to fund the shortfall.
Special Levies — The Hidden Risk
A special levy is a one-off charge on unit owners to fund an unforeseen or large expense not covered by the LTMF. Common triggers:
- Weathertightness remediation (leaky buildings) — can run $50,000–$150,000+ per unit
- Seismic strengthening works (particularly Wellington)
- Lift or roof replacement
- Insurance excess from a major claim
- Legal costs from body corporate disputes
Before you buy: Request:
- Last 3 years of body corporate financial statements
- Last 3 years of AGM and committee minutes
- The current 10-year maintenance plan
- The LTMF balance and any known upcoming capital expenditure
- Whether any special levies have been resolved or are pending
A solicitor experienced in unit title property will review these documents.
Typical Fee Ranges in NZ
| Building type | Typical annual levy |
|---|---|
| Small complex (< 10 units, older) | $2,000–$5,000 |
| Medium complex (10–30 units) | $4,000–$8,000 |
| Large apartment building (30+ units, lift, gym etc.) | $8,000–$15,000+ |
| Luxury apartment with concierge / pool | $15,000–$30,000+ |
| Leaky building in remediation | Can exceed $20,000 p.a. |
Higher fees aren’t always bad — a well-funded LTMF means fewer surprise special levies.
Insurance and the Body Corporate
The body corporate insures the building structure under a master policy. This covers:
- Exterior walls, roof, common areas
- The fabric of individual units (but not your personal contents or improvements)
You need a separate contents insurance policy for your personal belongings and any internal improvements (custom joinery, upgraded appliances etc.).
Important: The body corporate’s insurance excess can be significant ($10,000–$50,000+). If a claim arises from your unit (e.g. you cause a water leak), the body corporate may pass the excess onto you as a special levy.
Body Corporate Governance
The body corporate is governed by:
- Unit Titles Act 2010 — the legislation governing NZ body corporates
- Body corporate rules — individual rules adopted by the body corporate (can restrict pets, Airbnb, renovations)
- Annual General Meeting (AGM) — owners vote on levies, the LTMF, and maintenance plans
- Body corporate committee — elected representatives who make day-to-day decisions
Before buying: Check the body corporate rules for any restrictions on use (short-term rentals, pets, alterations). If Airbnb is your plan, confirm it’s permitted.
Frequently Asked Questions
Are body corporate fees tax-deductible for investors?
Yes — if you’re renting out the unit, body corporate fees are a deductible rental property expense.
Can I refuse to pay body corporate fees?
No. Body corporate fees are a legal obligation of unit ownership. Unpaid levies attract interest and can result in legal action. The body corporate can place a caveat on your title in some circumstances.
How do I check if a body corporate is well run?
Request the last 3 years of AGM minutes, financial statements, and the 10-year maintenance plan. Look for: consistent annual levies (no large year-on-year jumps), a growing LTMF, no unresolved disputes or litigation, no pending special levies, and an adequate insurance sum insured relative to the building’s replacement cost.
What is an “embedded network” and why does it matter?
Some apartment buildings have embedded energy networks — a private electricity or gas network operated by a third party. You may have no choice of energy retailer and could pay above-market rates. Check whether the building has an embedded network before purchasing.
What’s the difference between a body corporate and a residents’ association?
A body corporate is a legal entity created under the Unit Titles Act for unit title properties. A residents’ association is an informal voluntary arrangement — typically found in cross-lease or freehold title developments. Only unit title properties have legal body corporate obligations.