Strata doubles in 1 year old apt

Hi PC

Is it normal for strata to double after the first year? I am not sure if it’s because some things were perhaps covered under builders insurance or not when it was first built but I’d just like to know if it’s normal for newer apartments. My apartment is a small 50 unit complex, no amenities other than a lift and the usual, however it’s over 2k now.

Thank you

 

2k per quarter or per annum?
It's not normal for strata to double after the first year. Did you go to the annual strata meeting? Did you have a look at the annual report? It will show you where the property manager plans to allocate the money. Is it for the sinking fund or admin? And if admin, to what uses?

 

1 year old apartment? Sinking fund should be pennies. Are you talking quarter or year?

 

How do differentiate between a small 50 unit complex and a large 50 unit complex?

Sinking should be at least 1-2% of asset value.

Admin costs would have increased due to builder's warranty finishing and mandatory maintenance (included in construction cost) expired eg lift maintenance, fire services including exit lighting etc. Has a new 10 year plan been prepared by the strata manager? What does it contain? Are there any major claims being sought against the builder? How are these being funded?

 

I think some are setup wrong to start with or too show low fees. Go through all the costs to work out what is going on.

 

Up here, the developers always subsided the body corp initially to sell the new units. After a year or two the price goes up a lot (to what it probably should be).

Maybe this is what has happened here?

 

Unfortunately quite common, I suspect that's what has happened here.

 

Maybe OTP purchasers are fooled into believing that the yr 1 strata levies are realistic. Like really! I only have $800/qtr levies for a lift, concierge, gym and all of those gardens?

 

Does that sort of trickery go on ?

 

It's mandatory.

 

It is hard to say whether it's normal or not, so many things can happen in a strata. My personal view is it should not. Every Strata should have a Budget, back-up by a 20-year Sinking Fund Forecast. If is done properly, there should not be any surprises. The unfortunate thing is sometimes it wont happen like that....... I have told many people, be wary when reading "low body corp levy", especially when it's ridiculously low.

Of course there will be times when there are unexpected, natural disaster, or builders stuff-up. .

50-unit is not exactly small, and lift is very expensive to maintain. How many lifts do you have?
Amenities - what's "Usual"? Gym, pool, sauna, rooftop cinema? Again, these needs constant maintenance if done correctly, which costs money....

My suggestion is have a read of all the reports, minutes and financials.

 

And hidden away in the small print is the disclaimer that advertised strata fees are estimates only and may vary on completion!
Marg

 

Very true - not having a minimum 10 year SF plan is asking for trouble (everyone sells every 5-10 yrs and moves on?)

No point just looking at high or low levies, you need to understand how they're derived ie how much insurance, what maintenance contracts, what common area cleaning /power/water, strata management fees etc.

 

While it's common for levies to go up after the first year, it's not common for them to double. Have a look at both budgets and work out why it has doubled.

 

Check the last 2 years AGM minutes for repairs/maintenance schedule.

It may be because the sinking fund is low and they are "slowly" raising funds to pay for repairs.

Old buildings often suffer from concrete cancer and that is bookoo $$$ to repair.

 

Who "discovered" the unplanned lift costs, and why wasnt the strata manager and/or the committee aware of them?

 

Quite normaal. The developer wont fund the sinking fund. They leave it dry and when owners take over management the levies normaly are lower than expected real cosrs. Can be significant shortfall and defects too

New property isnt guaranteed quality