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Hi. I would appreciate some advice on some trouble I am having. I live in a strata title apartment, in a building built in 1970s. The window frames have “failed” (I tried to upload a picture but not quite sure how to do it on this site: The pictures are quite dramatic). Basically the metal frame has corroded and bits are hanging off. Every time a tradesman is in my apartment for something else they see the windows and say how dangerous they are. Anyone who looks at it sees it is need of repair. As it is, it cannot be repaired and basically the windows need to be replaced. A number of units in my building have same problem, to varying degrees. Some other owners have replaced their external windows at their own expense (and organised it themselves, etc).
my understanding is that external windows are the strata’s responsibility. The current chairman of the executive committee has seen my windows and agrees they need replacing. The problem is the current executive have inherited a situation where there is no money in the sinking fund to cover this. They cant see how they can pay for this. (estimated cost of repairs is $10,000+). The underlying problem is that for a long time these sorts of repairs and upgrades were ignored and there was no money in sinking fund to deal with these sort of contingencies.
I do not want to do what some of the other people in my building have done – in frustration – and gone on to replace their windows themselves.
Am wondering what suggestions people have
many thanks!
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Replies
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You appear to be facing a need for a special levy to build a sinking fund that has been mismanaged. It is all too easy for an EC (or a dominant office holder) to seek hero status by ‘containing’ sinking fund levies, but such levies are, in effect, saving for the proverbial rainy day, which has now arrived and found the scheme unprepared. It seems the present EC is going to have to bite the bullet and raise the money. The owners who have already paid from their own pockets are likely to be mightily p*ssed off, and I don’t envy the present EC having to sort the issue out.
Whilst I can understand your new Executive Committee’s position, the maintenance / repair / replacement of windows in common property (external) walls is the responsibility of the Owners Corporation (O/C). This responsibility is absolute, is not conditional upon the availability of funds, and should be attended to as quickly as possible lest someone is injured (or worse) as a consequence.
I don’t suppose there are sufficient funds in your Plan’s Administrative Fund, but the O/C can transfer monies between Funds so long as it implements a repayment plan within 3 months of the transfer.
Finally, O/Cs are permitted to borrow funds in circumstances such as those faced by your new E/C, and one option there could be to contact a specialist strata financier, who can not only arrange the funds but can also assist your E/C to put together a levy contributions arrangement (e.g. a Special Levy) to meet the repayment terms. As always shop around, but one such company is Lannock Strata Finance whose advertisement appears at the bottom of this website’s home page.
Whatever decision your E/C now takes, it must not be to do nothing!!
I believe it is a requirement in NSW for a strata plan to have adequate funds to cover any maintenance, unexpected or scheduled. When I was on our EC, we used to keep it at about $1,000 per unit. In total, this amount looks impressive, but in reality it isn’t a lot of money should a major repair be needed for a unit.
We have had a major unexpected expense. We organized a special levy with additional payments spread out over 3 quarters. We had the money in the bank to do the work immediately, the special levy topped up the funds back to the original level. It isn’t good enough these days for an EC to say there isn’t enough funds in the bank to cover repairs.
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