Saving Money for Your Strata Scheme
By Sue Raines

Whether you are an established home unit dweller, an investor, or a first home buyer you can help recession proof your building, save on regular costs and establish a valuable ‘sinking fund’ for the future.

The Strata Schemes Management Act clearly states that the owners corporation must maintain and keep in repair the common property and we are not advocating that you do otherwise.

Look at the bigger picture. Check your expenses. Compare a set of accounts from last year to this year, was the budget set realistic? Make a list of items that suddenly have risen in cost, in particular; water rates, electricity, cleaner, gardener, insurance premiums. If you are a bigger block there maybe additional items such as a lift or swimming pool maintenance.
If the committee feel that increases are unusual, check the invoices for ‘extras’ and seek an explanation. Alternatively obtain competitive quotes in any area of concern.

These items you may feel are small, but they add up significantly
particularly on top of the automatic annual fee increase.

Take inventory of all urgent building repairs,  list these in priority and have  the top three quoted. It is wise to seek at least three quotes. Do not automatically take the smallest price, instead check that all are quoting for the same work by having the tradesmen met on site by either a reliable owner or committee member to discuss the Strata’s needs. This will allow you to make a schedule of work and plan when it can be included in the budget. Ensure all quotes include GST and removal of rubbish from the site.

Each year blocks of units create a budget to set their levies. Both administration fund levies and sinking fund levies should be realistic and take into account anticipated increases in running costs and the possibility of having to renew items such as garage doors, carpet and paintwork over a period of time. Properietors who fall into levy arrears make it difficult for the body corporate to function. Prompt action on arrears of levies will save you money.

A strata building that has an active committee and owners willing to take an interest in the well being of everyone’s investment, despite having a Strata Managing Agent will benefit and prosper.

(c) Sue Raines 2009

Sue will soon be offering us a general free real estate advisory. As we all face late in life changes in this area, her advice may be helpful to many of us.