New app to handle heavy lifting in levy calculation


Imagine taking an online tool like a mortgage calculator – one of those apps on a lot of banks’ websites that tell you that you can’t afford to buy the home of your dreams – and applying it to major capital expenditure in your apartment block.

Say you had to fix up something really expensive and you had the choice between a special levy, delaying the repairs (if you even can) until you’ve saved enough money or taking out a strata loan.

How about if there was a calculator looked at all those options and more, and told you how much it’s going to cost the owners in real terms, with interest, tax and “opportunity cost” all factored in?

That is exactly what a new capital budgeting tool called “Levy Mate” does.

Created by our long-time sponsors Lannock strata finance, Levy Mate was launched in Sydney last week, at an industry event that included a keynote address from business titan Charles Curran AC and concluding remarks by Chris Duggan, President of SCA NSW (the strata managers’ professional body).

Levy Mate sidesteps the need for owners to have a deep knowledge of complex financial concepts by calculating the before and after-tax implications of different funding choices and presenting them to owners and strata managers in simple graphical form, says a spokesman for Lannock.

The Levy Mate App uses the 10 year plan for capital expenditure, the current sinking fund balance, current sinking fund levies and the composition of owners in the owner corporation (e.g. residential owner occupier, investor, etc).

It also makes informed assumptions about future deposit and borrowing rates, tax rates, inflation and so on.

The result is an easy-to-grasp display of how the different options pan out and what the real costs are year to year, allowing logical decision-making rather than knee-jerk responses based on what the majority of owners can or can’t afford at any given time.

Rolling out initially to strata managers, eventually Levy Mate will be available to anyone who is taking an interest in their strata scheme’s finances.

But for now it will be of more use to your committee treasurer and strata manageras they try to work out ways of paying unavoidable bills that are both equitable and acceptable.

For the first time they will be able to punch all the numbers into one interface and from that see all their options, from special levies to loans, laid out in a comprehensive and comprehensible fashion.

And there will be options for others to create their own version of the plan if they want to suggest an alternative.

Lannock believe this will be invaluable as owners corporations confronted by having to remove and replace combustible cladding  work out how to make the most of the NSW government’s Project Remediate offer to cover the interest on loans.

“This will be of huge benefit to owners corporations looking to fund rectification works with many buildings now ready to commence the removal of combustible cladding,” says Lannock CEO Paul Morton.

“We are all in the midst of trying to ensure NSW doesn’t see its own Grenfell tragedy. If you’re a Strata Manager looking after one of the 225 high-risk combustible cladding buildings, it’s a lay down misère that the Owners Corporation should accept the Government’s offer to pay the interest on the loan to fund the rectification.”

“But if you want clear, hard, economic data to back up the rationale, Levy Mate provides it – here are the benefits of a Project Remediate loan, right here, right now,” Mr Morton said.

“Kevin Anderson, the Minister responsible, has demanded an approach that is cost-effective, innovative and keeps a focus on public safety. I think he’s absolutely right. We all have a part to play to ensure every building in Australia is safe for its residents.”

Paul Morton said a Lannock strata loan allows owners to start work on rectifying combustible cladding and resolve occupational health and safety issues as quickly as possible.

“Many owners in the current COVID-19 affected economic climate would face difficulties in obtaining personal finance or increases to their mortgages in order to be able to fund a special cladding levy,” he said.

“Lannock looks forward to working with all parties, especially owners affected by combustible cladding to assist in finding them the ideal funding solution.”

One Reply to “New app to handle heavy lifting in levy calculation”

  1. Jimmy-T says:

    If you want to start a discussion or ask a question about this, log into the Flat Chat Forum (using the Forum link on the menu at the very top of your screen). More people will read it there and you can more easily keep track of responses.

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