Home buyers have been warned to be wary of new developments with quarterly strata levies so low that they look too good to be true – as they too often are. The NSW government is being urged to step in to stop unsuspecting buyers being ripped off.
SOURCE | smh.domain.com.au | Sue Williams
“I see a lot of developers lying about how much levies should be as they have no legal obligation to be truthful,” said developer Marco Novati, whose projects include The Tin Sheds at Balmain, Sugarmill at Camperdown and Henry at Lilyfield. ”They can write what they like and, by the time the new owners have moved in and discovered how much it costs to run their building, the developer has already sold out and doesn’t care.
”I believe strata fees should be legislated by the government.”
The president of Strata Community Australia (NSW), David Ferguson, said he was aware this happened and was in favour of regulation.
“You could legislate for a sinking fund analysis, which would be put together by an appropriately qualified assessor or quantity surveyors,” he said. “Some people do make buying decisions based on the level of strata fees and while ethical developers present a reasonable budget and levies, some others don’t.”
The Owners Corporation Network is also advocating for legislation around the setting of levies. “Too often levies are set unfeasibly low even for the first year, when big-ticket items in buildings are covered by the warranty period,” executive officer Karen Stiles said.
“We know of buildings who’ve had to raise levies by 70 per cent or double them after the first year.”
Mr Novati also recommended that buyers demanded to see a proper statement to determine how the vendor had arrived at the strata levy.
“Some people are just presented with a single line saying what the levies will be – but people shouldn’t believe that,” he said.
New ways to keep strata levies realistically low include having building gyms open to paid-for memberships and separating the retail and residential strata plans to ensure owners don’t end up subsidising the costs of the business components of their block or complex.