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This is an NSW question.
I live in apartment block of 12 units. Investors own 5 units and the remaining units are owner occupied. In October 2015 each owner was encumbered with one installment of 50k/unit for remedial work.
As a result of poor scoping, the Engineer/builder recently added 8 variation and 4 new works amounting to 88k. Majority of committee members are pushing for another special levy to be paid in one installment before Dec 30th. Also we have very low Administrative fund (261k) and sinking Fund (36k).
Yesterday at the executive committee meeting I proposed prioritising these variation works, setting timeline for undertaking these work, obtain competitive quotes and introducing progressive payments for proposed variations.
I also suggested employing an experienced consultant and identifying major remedial work that should be undertaken in the apartment block, bundling the newly identified work and variation work as separate project. Also recommended sourcing competitive quotes and either increasing the sinking funds by progressive payments or applying for Strata loan.
The investors dismissed the idea of taking strata loan since they could make a down payment now, rather than paying 9-12% interest.
Unfortunately, I have a limited income and cannot pay another special levy before Dec 30th. I refinanced my apartment to pay 50k last year.
Under such circumstances is it an option for me to postpone getting any repairs done to my apartment and not contributing to the special levy in one installment before end of this year instead making a progressive payments for work to be done later?
Since other owners can afford to pay the special levy they can progress with repair works to their apartments now.
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Replies
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Assuming that all of the correct processes have been followed by the Strata Scheme I believe that you cannot avoid paying the additional Special Levy.
Have you considered explaining your financial situation and difficulties to the Strata Manager?
Perhaps you could come to some sort of financial arrangement about the payment of this Special Levy. This type of special arrangement is not uncommon.
These special arrangements will need to be approved by the Committee. It would not be reasonable for the Committee to refuse to enter into such an agreement.
Committees that I have been involved in have entered into such individual agreements to allow Owners more time to pay.
However, if you believe that correct processes have not been followed then you have the option to seek assistance from NSW Fair Trading.
Rhea you have two separate posts on the same topic.
In relation to the levies and payment arrangements – the new Act that comes into effect at the end of this month provides that an owners corporation can agree with an owner to a payment plan for overdue levies. This can only be for 12 months but can be extended by a further resolution of the OC. The OC can also resolve not to charge an owner interest on overdue levies. Refer section 85 of that Act. So what you need is a resolution of the owners at a general meeting to enter into the payment arrangement with the relevant owner.
Similar provisions applied under the old (current) Act. As proudsceptic says, these types of arrangements are not uncommon.
The OC can also resolve when it is considering a special levy to impose that levy in instalments – we have done that before, spreading the payments over a number of periods. You can also delay the payment, for example by providing that it is not payable immediately, but in three months time. However note that the OC can’t enter into a contract for works unless it has the money to pay the contract price.
I don’t agree with you that there should be a cap on levies – unfortunately that is what you sign up for when you buy into a strata scheme. The owners have an obligation to repair and maintain a building, and if a large amount of money is required then they have to raise it.
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