Strata Sticker Shock: Urgent Call for Reforms as New Owners Face Hefty Levies

A recent Guardian Australia article highlights a major issue for new strata property owners facing unexpected, hefty levies for undisclosed repairs, often exceeding $100,000. These levies address urgent waterproofing and structural issues. Research shows 50-60% of new apartments have defects, necessitating such costs. Current laws don't require funds to cover these maintenance plans, forcing some owners to sell. This calls for urgent legislative reform to protect owners and ensure transparency and compliance in the strata sector.

May 15, 2024

In a recent exposé by Jordyn Beazley in The Guardian Australia, a glaring issue has come to light that is currently plaguing new owners of strata properties across the nation: unexpected and substantial special levies for urgent maintenance, often not disclosed prior to the sale of the property. These levies, frequently exceeding $100,000, are generally imposed to address essential, yet undisclosed repairs such as waterproofing and structural deficiencies—a symptom of a deeper systemic flaw within the sector.

Amanda Farmer, a seasoned strata lawyer, points out that an overwhelming 90% of the disputes she deals with are related to repair and maintenance failures. Buildings regularly need to generate significant funds quickly to address these issues. Further compounding the problem, research from the Australian Apartment Advocacy reveals that 50-60% of new apartments nationwide suffer from defects, significantly contributing to the need for these unexpected financial levies.

Despite regulations requiring strata-titled properties to maintain detailed maintenance plans, there exists no legal requirement for these properties to have the funds readily available to meet these plans, often leaving new owners blindsided by these costs. This gap in the legislation has led to situations where owners, overwhelmed by these sudden expenses, have no choice but to sell their properties—sometimes to buyers who are equally unaware of the impending costs.

For professionals like building surveyors and inspectors, these findings underscore the critical nature of our roles in maintaining transparency and adhering to strict building standards. They also highlight the necessity for more thorough inspections and for strata boards to engage in meticulous financial planning and reporting. As stewards of the built environment, it is imperative that we champion reforms that bolster protections for property owners and enforce more rigorous compliance with existing regulations.

This predicament not only undermines the financial stability of property owners but also raises serious ethical questions regarding the responsibilities of those involved in the sale and management of strata properties. As leaders within the industry, it is our duty to advocate for legislative changes that provide clearer guidelines and stronger safeguards against these unexpected financial impositions.

For more insights into the significant challenges faced by strata property owners and the pressing need for legislative reforms, click here:

Kyrillos Ghaly