Strata Levies Liabilites on Purchase

Hello,

A friend recent purchased a property and was well aware of the strata fees which were one of the big considerations of purchase.

They have now been issued with an extremely large levy bill double the amount expected.

So instead of expecting to pay $3,000.00 they have a hefty $7,000.00 to pay.

They were told of an existing major repair and that it had been budgeted for and paid.

But another large bill was raised for works that they were unaware of and would not have agreed needed for them at this time and this would have changed there thinking on purchase.

As the sinking fund is extremely healthy and they had not been advised at time of purchase of any other repairs etc.

They are beside themselves...imagine purchasing...having a new mortgage and being hit up for $4,000.00 extra they don't have?

Would appreciate any input to try and sort this situation out.

My thinking is why have an extremely large sinking fund and not use the money isn't that what the fund is for?

Thank you in advance.

 

How do they want to sort it out, exactly?

Caveat emptor.

 

Lots can change between signing a contract and settlement.

Is this second "repair" related to the first major works ?

Who said the first major works had been budgeted for and paid already ?

Sounds like vendor was bailing out of sinking ship and the purchaser took the REA word for "it all being good now" !

 

Hello

By only having to pay for the strata levy amount as advised/agreed on purchase.

There is no record of a meeting regarding the second repair so this was not voted on by new purchaser.

Agreed to pay normal levy amount that's all.

This rest should be taken out of the sinking fund the previous owner had paid into for 15 years and had been unused.

 

By buying your friend also agreed to every future levy. What law is your friend going to try to argue? Look at the contract again and see if it says seller only responsible for body corp invoices already issued. Future items are between the new owner and the body corp, not the agent or seller.

if the levy was voted on and agreed by the majority of owners, then your friend’s disagreement doesnt mean anything.

 

The search by the solicitor revealed the first repair.

Second repair was word of mouth by owners also regarding payment.

The sinking fund is extremely healthy.

 

did your friend read the body corp minutes? Presumably the other owners are paying their ones?

its healthy according to who? This is like saying google should pay a bigger dividend because it has lots of cash. Isnt up to you.

but bottom line: what legal remedy does your friend have and has a solicitor agreed that it might work?

 

So your saying that you have no rights when you purchase a property?

The levy fee is ok and as expected.

Its just that have lumped $4,000.00 into sinking fund.

So levy is $1,000.00

Owe 3 levies...$3,000.00

$4,000.00 is in dispute.

I cant understand how someone has no rights and you can just charge them anything without explanation.

 

They own a certain % of the rights of the body corp. They have the right to go to the body corp meeting and vote. If they are outvoted, then….

if the decision was made before they became owners, they inherit the previous decisions.

Has a lawyer said your friends has grounds to dispute? Or claim something against the previous owner or selling agent?

 

Healthy according to me.

Just opening a discussion about levies.

Trying to learn more about them etc.

I know some levies break even.

And i know some have a lot in the kitty....they are there to be used imo

Well at this stage i have come here to talk this out...next going to discuss with Strata Management.

They probably will have to sue new owner because they don't have the funds...etc $4,000.00

 

For that, there is a clear body of law. Which your friend needs to become familiar with if it gets to that.

 

Are you sure you have the full story?

The sale of a strata property in WA includes the "Precontractual Disclosure Statement to the Buyer" which includes such documents AGM minutes, Financial Statements, levy notices etc etc.

This is a 10 page document (plus attachments) that both the the Buyer and Seller sign off.

If the information you purport was excluded from this, your friend would have legal remedies.

 

You have rights, and also liabilities

This should have been discoverable in the minutes

Can't happen !

Has to be on strata records with invoice from strata management defining what exactly the payment request relates to.

This new owner should also be going back through their contract and disbursements made......
Property isn't supposed to be sold with amounts owing, but there's nothing to say that the vendor didn't put i to the contract that any outstanding levies are the liability of the purchaser

Is this a self managed strata or something???

 

All outstanding Strata levies were paid on settlement.

Well aware via search and minutes of the major repair that was being undertaken.

The second repair happened between all this taking place and i believe could have been emergency...together with lockdowns etc...difficult situation.

Have no real problem and agree with second repair....but...i can't understand why the sinking fund can't be dipped into.

Anyway have asked for clarification so...

Also now understand that you can have budgets projected for strata's and learning up on this.

Thanks everyone for input.

 

Have a chat with Mel Dixon from MDH Legal in Osborne park, she is a settlement agent and property lawyer and knows her stuff, works with others on the forum as well.

 

Thanks Colin.

 

Tell her I referred you as we do a lot of business together, cheers,

 

If your friend does not pay for the levy before the ne t meeting he will have no vote at the meeting. A new owner rarely knows the same things as the other owners who have been involved in the building everyday for so many years.
I have seen hundreds of owners make enemies of their neighbours by thinking the same way as your friend.
The levies would have been determined for a purpose at a previous meeting rather than wasting money trying to overturn something they simply need to ask the owners for the minutes of the meeting the meeting that resolved this levy.

it’s either there and therefore fair because the majority of owners wanted it or not there and your friend does not need to pay it.

The most important thing is not to make enemies of neighbours as soon as you move in. Especially when one set of minutes will settle the matter. Please remember it’s a majority vote,Iike voting for labor or liberal. You don’t get to stop paying tax because your party didn’t win.

 

Probably not clear.

Friend/owner knows nothing at all about any repair/s...that's just second information that i heard.

He received his FIRST notice for strata fees which are $3,000.00...AGREE to this amount.

Together with $4,000.00 unexplained amount in sinking fund.

All this had been organized prior to the purchase and been in the works and i was told paid for.

Why would he have to pay a cent when the kitty is full...?

And worse i'm yet to break this news to him.