Levies and fees will support you
Your levies and fees will be the financial backbone of your defect rectification process
The first AGM marks the point where your levies and fees will be set. Your levies and fees will support you through a defects rectification process and will act as your financial backing. That is, they make up the funds that will pay for the administration, expert reporting and legal and specialist help that is needed along the way.
It is common to see owners and committees rebuke levies and fees that are perceived as high on the basis that because their building is new, higher levies aren’t needed. However, this isn’t necessarily a good approach.
Your building’s funds should be built up from day one, as the administrative costs for fixing your building’s defects and general maintenance will also need to commence from the start too. Owners and committees should be cautious of stripping our contingency levies and fees from the preliminary budget, and levies and fees should be seen as a mechanism to support you.
Underestimating how important accurate budgeting and levy setting is from the beginning can be what leads to owners facing large and unforeseen special levies in years two and three.
Just because your building is new, doesn’t mean you should shy away from accurately budgeted levies and fees. While it seems like saving to initially strip-out or reduce levies and fees for sinking, capital works, and maintenance funds, it can be financially detrimental in the following 24-36 months.If you’d like to find out more about building compliance for your strata property, download our FREE Community Living guide. Or for a consultation to review your common property insurance by our CommunitySure insurance team, click here.