Years of underfunding is adversely affecting the maintenance of apartment common property with some of the responsibility being laid at the feet of retirees not willing or unable to fund their share, according to a presentation given at the recent Strata Community Australia (NSW) annual convention.
Data provided by a research project by the City Futures Research Centre at UNSW, and funded in part by SCA (NSW), indicates that almost 1 in 3 owners surveyed are concerned that budgeting for repairs and maintenance in their strata scheme is inadequate.
SCA (NSW) President Greg Haywood, said it was well-known in the strata industry that many residential apartment buildings were falling into disrepair because older residents were struggling to find the funds to pay their share of the common property upkeep costs.
“Understandably most retired owners are on fixed incomes which leaves very little in the pot for extra expenses such as contributing to the upkeep of their homes, but this means in some cases buildings that repairs are deteriorating further adding to the cost,” Mr Haywood said.
The data also showed that 39 percent had difficulty in coming to an agreement relating to major expenditure.
Another respondent said their older neighbours, “were only really planning for within their lifetime, and they only really had a 10 year plan, and whatever happened after that, they weren’t really worried about. And as a result they wanted to keep those fees as low as possible and once they died or moved on to some other retirement living then the next person could sort it all out.”
“Not only does this way of thinking devalue the property but it’s unfair on the new owners who come in and are forced to pay for years of neglect,” Mr Haywood said.
The owners corporation, which owners are a part of, is liable under the strata laws to keep the building in good repair. Failure to do this can result in legal action and fines being imposed. There is also the potential for injury or loss of life if there is an accident on common property and it can be shown that the accident was due to poor building maintenance.
As a result of this neglect, some things are changing but in a way that is not creating harmonious living. As another survey respondent said, “before the most recent [annual general meeting] a few younger owners in the building got together informally and agreed to vote each other in, we have been able to out vote many of the older owners who will not spend any money on maintaining the building”.
SCA (NSW) advises retirees or elderly people on a fixed income to do their homework. If considering a move into a strata property they should ensure they are aware of their financial obligations and ongoing costs.
“Having some rainy day funds set aside will ultimately pay owners back when the time comes to sell if they have invested into the care and upkeep of the property,” Mr Haywood concluded.
A copy of the media release can also be downloaded here.