How to curb your levies but keep the quality

A few weeks ago we looked at the fancy additions to your apartment block that may  be inflating your levies through running and maintenance costs.

But there are many ways you can cut costs and curb levies in your block without compromising your quality of life and some may even make it a better place to live.

Any wasteful drain on your finances will hit home whether you are a long-term resident, a landlord, have downsized to enjoy your retirement, or are a new homeowner teetering on the edge of an interest rate cliff.

However, even if you haven’t fallen for the “affordable luxury” nonsense, there are ways you and your neighbours can make savings that might make a dent in your levies. 

One area is energy and water wastage – and the two are related.  If your block is wasting water due to undetected leaks it’s also wasting electricity as that water has to be pumped up to the highest level to let gravity do its job, even worse if it’s heated.

Companies like market leader Wattblock will, for a fee, provide advice on hot water, lighting and ventilation efficiency measures as well as solar power, battery storage and electric vehicle charging.

Buildings can save a lot through low-emission lighting, motion activated lights and timer controlled exhaust fans in car parking areas. Solar power attached to a heat pump for water can cut power bills dramatically.

The NABERS (National Australian Built Environment Rating System) will test the energy and water efficiency of an apartment building’s common property and offer star ratings on a scale of one to six.

It’s not free but the NABERS survey will not only show how you can reduce wastage but a good rating will attract potential purchasers and tenants.  

You’ll find more details on the NABERS website. If you’re quick, your scheme has until 5pm on Monday, September 19, to apply for a City of Sydney Smart Green Apartments grant that will cover the cost.

Another potential area of savings is in your strata management contracts.  Basically there are two kinds on offer; one is a set fee that covers everything while the other more common contract has a Schedule B component.

Schedule B is a list of charges the strata manager can make for work done on the scheme’s behalf.  These can include everything from correspondence to attending meetings and tribunal hearings.

This can be a very lucrative source of income for strata managers but it can also be an efficient way of only paying for the services you require.

Go for an all-in service if your strata scheme has a lot going on – whether it’s dealing with “difficult” owners or handling defect rectification – but pay less up front and cop the Schedule B fees if your community is more settled.

Speaking of which, it’s worth examining whether your committee needs to go to the barricades on every issue or breach of by-laws.  Free mediation services will give you an opportunity to settle disputes without resorting to breach notices and tribunal hearings.

Check your by-laws to see if they are out of date, leading your block into hard-to-defend potential conflicts, such as over pet ownership, for instance.

Meanwhile, if your committee does take action, they should apply for costs and fines (where applicable) to at least attempt to offset the expenses.

It may also be worth getting your committee to undertake an audit of all the contracts and expenses incurred on your block’s behalf, to find out if money is being wasted.

But don’t fall into the classic false economy trap of reducing services to the detriment of the whole block and the people who live in it. Cut back on cleaners and you’ll end up living in dirt.

This column first appeared in the Australian Financial Review.

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