Strata schemes are renowned for not maintaining and repairing the common property. Even though section 62 of the Strata Schemes Management Act 1996 compels maintenance and repairs, lot owners would prefer to not spend.
In previous Leverage reviews, Leverage has reminded lot owners that repairs cost in value. As a conveyancer, Leverage advises clients to add costs to their purchase price if the sinking fund is low. For example, if a purchase price is $750,000, and the sinking fund is low, clients are advised that they should consider the purchase price as $800,000 because a special levy will be required at some time to fix the property. This discourages purchasers and thereby reduces the value of the property.
On top of this, evidence existing on a strata register that shows repairs are needed would definitely reduce the price of your property. This means that exceptionally frugal lot owners are causing their property to drop in value.
If your property is a stepping-stone to a better home or one that you wish to use in your retirement, this failure to pay as the repairs are needed will affect your future.
What is often forgotten however is what you leave behind for your kids. With the increasing pressures on the property market, it is becoming incredibly difficult for young people to purchase their first, or any home. This places a greater emphasis on what parents can leave behind. If the property is not repaired, the kids will either need to repair before sale or accept a lower price. This essentially reduces the inheritance that you wish to pass on to your loved ones.
Leverage has encountered many estates that leave the kids with a disaster. Firstly, it is unfair to leave your loved ones with a calamity in a time of grief, and most of all, youâ€™re only robbing your kids of the inheritance by not repairing your property.
If you are concerned about getting your affairs in order, you can contact us.