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You see this occasionally in commercial office blocks where they may for instance want to join three offices together to take up the entire floor as one lot. Some people try to do this to reduce their contribution or interest entitlements which seldom works in their favour. Amalgamating lots will require the consent of other owners and they aren't going to agree if it means your contribution to the body corporate's levies go down (which means theirs goes up).
But if your intent is simply to join the lots but still pay the same share of the body corporate levies it is unlikely you will have much objection from the other owners unless there are other factors at play.
Keep in mind that legislation around bodies corporate differs from state to state so it may be a good idea to do your homework. In Queensland you can speak to the office of the commissioner for body corporate and they should be able to give you free advice on the process and what needs to happen. I imagine other states have a similar service.
Hank
I'm interested to see what others think on this. How much are you intending to spend on selective renovations if you're maxed out your borrowings? Also, can you get a personal loan to use for a deposit? I asked a broker this years ago when I didnt want to save a deposit and he pretty much laughed at me.
Hi Paterson,
I was just wondering if you happened to find any tools to help you research the best suburbs?
Hank
Hi Mickstuth,
Did you end up investing and how did you go?
Henry
Thanks Richard,
Any tips on where to start researching the correct structuring?
I've seen a couple issues pop up in new buildings (in QLD) in the past and thought I might share:
- In some circumstances in a new building the lift maintenance will be covered by the lift contractor for the first year but the second year is when the body corporate's budget needs to be adjusted to cater for it's ongoing maintenance. It's a good idea to read the budget proposed by the developer and make sure you are happy with the amount that has been budgeted. You can sometimes even call the contractors and see what they believe the ongoing expense is likely to be.
- In Queensland the building insurance is payable by the developer in the first year. In the second year the levies have to be adjusted to account for this expense which is more than often a big chunk of the body corporate's budget.
- It's a good idea to look at the draft budget for the body corporate's first year and ensure you think it is realistic. How does it compare to other buildings of that size that may be 4 or 5 years old?
- Then of course there is the defects issues which, if addressed properly, will require the services of a qualified consultant. Addressing defects is not usually a cheap process but due to the limits on the timeframes they really should be addressed in their first few years. Major defects can sometimes mean the lawyers get involved too this obviously means more levies need to be raised.
Hope that helps.
Thanks for your response.
- Is a deposit bond able to be used in a situation where you may buy a property for less than it's valued price and use that equity as a deposit? I thought i read something about this recently i.e. property value $200k and you manage to secure it as $190k. Is that $10k able to be used as a deposit?
- Thanks
- Investment purposes. I have quite cheap rent where I am and even with the extra stamp duty I've worked out I would be better off just buying a place and renting it out. I don't struggle paying my bills and have a decent income, it's just the saving part that seems to be taking too long.
Hello,
Three questions from a bit of a Newb:
1. How exactly does a deposit bond work. I've guess that it is using the equity in your property but if so, does that mean you are basically taking a loan out for that amount with repayments etc. or is it more of like a guarantee for the bank?
2. PPOR stands for …. ?
3. Is there a shortcut to not having to save up a deposit to get into the market? I am struggling a bit but am desperate to get into the market…
Thanks,
Hank
It may be relevant to note that bodies corporate operate under different legislation depending on what state you're in. In Queensland you can get hold of the list of owners, referred to as the "roll" be asking the manager for a copy or performing a search of the records at their office. Generally they will give it to you if you are an owner but if you aren't having any luck they are obligated to give it to you if you search the records for a small fee (I think its about $14).
