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[powers that be]

Background: block of 24 units built in 70s over three floors. Work done over last 18 months includes repainting whole block, (paid for from funds), replaced garage doors (paid for from funds), replaced the roof (paid for via a strata loan over 5 years, 4 years still to run) garden maintenance (materials paid from funds – owner working b supplied labour)

We now have to replace the windows. We had planned to do this in stages and engaged engineers to report on what is needed then put out for tender. We also planned to utilise the scaffolding by doing the windows in the same line as each other at the same time. Quote for first 3 units is $135000. These are the biggest and most number of windows in the units and are also the most effected by leaks in heavy weather.

This is a huge amount of money! And is only for 3 of 24 units. My question is how can we fund this without causing financial difficulties for people. We currently have a very good levy payment record with only 1 defaulter. Financial stress may cause owners to have difficulty in paying the levies. Open to any ideas! Do it in stages saving to pay for each stage? It will take about 7 years to do it this way. Get a BIG strata loan and do it all at once? What do others do?

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[Jimmy-T]

I don’t think you have much choice in the matter.  The owners corp has an absolute legal responsibility to repair and maintain common property, regardless of the cost.  What you should do is get competitive quotes for getting this all done in one hit then go and talk to someone like our sponsors, Lannocks, about getting a strata loan.

I know there are other ways of financing it but this is by far the least stressful, especially for people on fixed incomes. 

The one thing you can’t do is nothing.  Grasp the nettle and think about how much this is going to increase the values of your properties.  By the way, if you were in Victoria, the people who benefitted most would pay more too.

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[powers that be]

Thanks Jimmy. After the engineer’s report came back with the specifications of the replacement windows we put the job out for tender. We got vast differences in the quotes received ie $100 000 in difference between highest and lowest quotes. The units are in a NSW coastal town and there are limited numbers  of companies capable of doing the job. Our current strata loan is with Lannocks. I guess the next step would be to approach them again and see what a loan for the whole job would cost. 

In reality once this work is done there should be little else that will need to be done, so levies collected into the future could pay that loan off instead of continually chasing repairs caused by the leaks. The unit block will look fantastic and value should increase due to all the big maintenance already having been recently undertaken.

I think we need to seek further advice on what would be a healthy holding in admin and sinking funds too. Just to be sure that we remain viable. That information would also confirm what the quarterly levies should be set at.

Lots to think about!

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