The phrase “slum of the future” gets bandied around a lot – not least by yours truly – but if you think it’s an exaggeration, take a look at the case of a reader’s mother, a widow on a pension, who bought a brand new unit in Liverpool after her family home got too much for her. Not only did the price of the unit drop by $30,000 before settlement – which happens – but then the strata fees jumped from $365 a quarter to $950 in less than 12 months and are likely to go over $1,000 next year.
Meanwhile the lifts are constantly vandalised, the security doors are broken and the building is not cleaned regularly. When the managers eventually installed too-obvious security cameras, they were smashed within the first week. Our reader’s mother is living under constant fear but can’t sell because no one wants to buy into a building that’s vandalised, filthy and run down with high levies for only the most basic facilities.
Our reader asked if there was anything that could be done to reduce his mother’s levies and if there was anyone, like an ombudsman, who would stand up for her rights? Sadly, the answer to both questions is “no”. The developers obviously lied about the likely level of levies and there’s nothing in the law to stop them doing it again.
Our reader could go to the Office of Fair Trading and try to get the Executive Committee replaced by a professional manager, or get on to the Executive Committee himself and try to sack the manager. But either process could take months if not years and there’s no guarantee that the levies would ever be reduced. Or he could rent out his mum’s apartment and move her into a rental that’s properly maintained. He’d probably cut a loss on the deal but at least she’d be safe and happy.
Meanwhile, I hope the smug bastards in Macquarie St who keep telling us we have the best strata system in the world are reading this. When a widow can be driven out of her home because you’ve been bought and sold by developer donations, you ought to hang your heads in abject shame. Hi Jimmy
I was interested in your column today, but a little puzzled.As I understood it, the recent changes to NSW legislation covering strata title, should have avoided this scenario to a large extent.As an owner-occupier of a strata unit, I understood that under the new laws, an independent inspection and 10 year maintenance plan is now mandatory.And a sinking fund must be maintained to fund the recommended repairs and renovations.This is intended, I am informed, to prevent buildings from falling around the ears of the tenants (though it doesn’t protect them from the inevitable rent increases), and to ensure that future buyers are not sold a pup.Although I sympathise greatly with the lady’s situation, surely her son had a property inspection done, and a search on the strata documents, before he made the purchase? – JA, Central Coast
Slightly different issues, JA. This was a new building in which the estimated levies had been set deliberately low and it was only when the owners moved in and started managing the place that they realised the real costs of running the building and had to raise the levies so dramatically. In any other area of commerce this would be fraud. Also the place is being mismanaged by whoever is supposed to be doing it, hence the unchecked vandalism.
The legislation you refer to only says that an estimate (not necessarily a professional inspection) of future sinking fund needs has to be undertaken and even then there is no compulsion on the EC to adopt its recommendations. I know of some new developments where the sinking fund contributions have been set at $1 a quarter. The reader concerned sounds pretty diligent and even accepted as part of the ebb and flow of property, that the developer knocked 10 percent off the value of their flat by selling off the remainder of his stock at a reduced price. But buying off the plan turned out to be more of a gamble than they imagined especially when it transpires that consumer protection is almost non-existent.