Insurance and construction costs are rising but that may not justify a massive jump in levies, with some apartment owners hit with a 40 per cent rise in strata levies.
Australian Apartment Advocacy director Samantha Reece says the levy price hike is forcing owners on fixed incomes to sell their homes.
“Apartment owners need to be sure their strata is delivering value for money,” Ms Reece says. “You must attend your annual general meeting. It’s where the budget is set for the year and it’s your opportunity to ask questions about expenses and be sure the levy is being fairly allocated based on the size of the apartments.”
Ms Reece says if major works are inflating the budget, owners should check whether these can be staged or they can request a strata loan so they can pay over a longer period.
If you are buying an apartment off-the-plan you should always ask for three-year strata forecast because many developers set the first-year’s fees at unrealistically low levels. This can give a misleading impression of ongoing costs. The lower first-year rate is possible because all defects are covered by the builder and warranties in the first 12 months.
AAA is also calling on the State Government's to mandate three year forecasts which are verified by independent certifiers to ensure accuracy.
“There is no doubt based on AAA’s research, the sweet spot for levies is $1000/quarter,” Ms Reece says. “Owners, you have every right to scrutinise the levies to ensure you are getting the best value for money.”
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