major repairs required to Strata building. Weighting up various solutions.
1 Q : This relates to implementation of a Strata Loan.
The O.C agrees to cost of repairs. Not all can stump up there share and propose a Strata loan. Some owners are wealthier and would rather pay up front. How is the matter progressed from here ? Is the solution that some Owners pay their quarterly Levy plus a Loan repayment surcharge ?
This is a vexed question as strata law says that levies have to be charged on the basis of unit entitlements alone. What this means in a case like this is that either everybody pays for the loan or everybody pays a special levy.
Is the belief of a Owner who thinks the sale price of their Lot would be adversely affected whilst a loan is in place, justified?
It depends on the owner and prospective purchasers. What might be more off-putting to prospective purchasers would be knowing that work needed to be done and an unspecified special levy was coming down the track.
Prospective buyers will factor levies into their purchase budgets. It’s all swings and roundabouts but there are moves in the current review of strata laws to quarantine strata loans from the levies rule to give owners more flexibility and choice. However, that’s not going to happen overnight.