Hi Strata Answers,
Thank you for your contribution to this forum topic. Whilst I agree with your suggestion re- borrowing for a term of 7 or 10 years to be more equitable… this argument was put at our AGM (the issues in our complex are both consequences of fire orders AND paying for legacy defects) and the argument was defeated.
Through this experience, I’ve found that issues of equity (though a nice ideal), don’t factor at all in these situations. My observations were that decisions were made and votes were cast purely on the basis of individual owner’s economic concerns. In this instance, the owners in my complex, faced with very large costs for legacy defects preferred a short term loan to avoid the downsides of a longer term legacy loan.
Apologies to Strata Answers, but as I discovered, your suggestion is too idealistic. Perhaps it might work in an apartment complex with a majority of owners who don’t have access to liquid funds, but even in this situation, an agreement for a longer term loan would be based on each owner’s own financial situation, it is unlikely to be based on a decision to spread the cost of paying off a legacy debt equitably.
In strata, owner’s votes are probably 99% based on how decisions will directly affect them economically.