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I see a lot of queries from buyers who rule out certain buildings because their levies are 'too high'. Often, you will see new developments which have set the strata levies unrealistically low (and buyer jump at them only to realise that they need to rise by more than 50% for year 2 because warranties have expired or that the developer just lied).
Have you been deceived or caught out?
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.
Viewing 2 posts - 1 through 2 (of 2 total)
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