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Plan for future, strata owners told

STRATA companies have been warned to establish a financial plan and set aside sufficient funds to implement it.

Blackburne Real Estate director Sheryal Griggs said they should plan financially to ensure they had reserve funds for capital expenditure items of maintenance, repairs and replacement when these became due.

“Unfortunately, many strata companies do not think far enough ahead and this can lead to special levies being required, placing some owners in a financially embarrassing situation, especially if the levy is a large one,” she said

“Big ticket items such as lifts, air-conditioning, painting, roof maintenance and security can come out of the blue.

If sufficient reserve funds are raised over a period payable quarterly, it avoids suddenly having to impose a special levy.

“A new owner coming into a property may face a large special levy because previous owners have not accumulated funds to undertake necessary maintenance.”

Ms Griggs said a healthy strata company bank account was a very good selling point because prospective purchasers knew they would not have to shell out large sums of money if the strata company had been prudent in its financial planning.

All items have a limited life and, as buildings get older, major expenditure items can be expected to need repair or replacement.

Blackburne recommends a strata company has a one to five year plan for maintenance with sufficient funds set aside to implement it.

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