Not happy about Body Corp Levy Notice!

Hi there,

I'm just after some opinions and advice as I'm not sure where else to go with my problem.

I own a single apartment in an apartment block (9 stories) and recently I've received a letter from the Body Corp saying that they need to raise $90 000 immediately to cover the cost of fixing a leak in the roof barbecue area. They have had an independent contractor verify that "The leak is a result of inadequate Waterproofing membrane applied to the rooftop area".

But I am furious with this notice because why are we (the owners) meant to cough up this fee? This apartment is only 3 years old, shouldn't things like this be chased up with the original builders??!! I mean this sort of thing sounds like shoddy workmanship so why are the owners being pressured to pay for it?
Considering that we pay over $4000 a year in Body Corp fees already, I don't feel it's fair that we are being demanded to pay for this levy on top of what we already pay!

Has anyone else had this type of experience and is there anyway that I can fight the Body Corp's decision to force owners to pay for builder's poor workmanship? Does anyone else agree that in this instance, owner's shouldn't be paying the cost of having to fix up the leak?

Any help appreciated.
 
This apartment is only 3 years old, shouldn't things like this be chased up with the original builders??!! I mean this sort of thing sounds like shoddy workmanship so why are the owners being pressured to pay for it?
Considering that we pay over $4000 a year in Body Corp fees already, I don't feel it's fair that we are being demanded to pay for this levy on top of what we already pay!


.

What was the discussion at the AGM or Committee meeting at which this decision was made in reagrd to contacting builder (may be out of biz for shonky workmanship) or claiming off insurance?

Yes, you can fight it but
1. this needs to be done at the meeting
2. majority rules - so you need ot have enough owners supporting your view

The Y-man
 
Hi there,

I'm just after some opinions and advice as I'm not sure where else to go with my problem.

I own a single apartment in an apartment block (9 stories) and recently I've received a letter from the Body Corp saying that they need to raise $90 000 immediately to cover the cost of fixing a leak in the roof barbecue area. They have had an independent contractor verify that "The leak is a result of inadequate Waterproofing membrane applied to the rooftop area".

But I am furious with this notice because why are we (the owners) meant to cough up this fee? This apartment is only 3 years old, shouldn't things like this be chased up with the original builders??!! I mean this sort of thing sounds like shoddy workmanship so why are the owners being pressured to pay for it?
Considering that we pay over $4000 a year in Body Corp fees already, I don't feel it's fair that we are being demanded to pay for this levy on top of what we already pay!

Has anyone else had this type of experience and is there anyway that I can fight the Body Corp's decision to force owners to pay for builder's poor workmanship? Does anyone else agree that in this instance, owner's shouldn't be paying the cost of having to fix up the leak?

Any help appreciated.


Ninety thousand to fix a roof leak on a BBQ area ???....Crikey that's not a typo is it?....IF not that's horrendous.

That's one of the problems with ownership of units & townhouses - out of the blue you can be asked to cough up, whereas with a house you have all the latitude in the world as to when and how you carry out repairs
 
Thanks for the replies guys,

No, it's not a typo, it actually states 90 thousand.
Now something else has happened, I've rung 2 other people who also own apartments in the same complex and to my great surprise, they did not receive this Levy Notice!!!?? At the very least, shouldn't this notice go out to EVERY owner in the complex?
I really think something dodgy is happening here. Could it be a scam of some sort where someone is illegitimately using the Body Corp's name to try and suck money off naive owners????

Also, I wasn't at the AGM meeting, but apparently the AGM only happens once a year in August, so the last one that happened was back in August 2009 and no mention of this roof problem. This notice was dated 21 May 2010 and as far as I know, I'm not aware of any AGM or committee meeting that took place for them to come to this decision. It was just a sudden letter in the mail asking me to cough up $642 (presumably my share of the $90 000).

Anyway, I've been advised by another friend who owns an apartment in the same building (and who didn't actually receive the letter) that I should go and read my Contract that I signed when I bought this place (It was an off the plan purchase) because on the Contract, it should say that I am not liable for bad workmanship or words to that effect which would clear me of all financial liability for fixing it up. Does this sound right?
 
Sounds right to have a read of the contract.

Can you talk to the Body Corporate / Strata Manager and ask for all the details as well ?
 
Putting up levies or introducing special levies always brings people out of the woodwork. Don't want to be involved until the church plate has to go around.

In a block of 140 units I'm sure there would have been committee meetings since august.

Rather than running round like a headless chicken go talk to the committee members or the strata managers.

Nobody voluntarily puts their hand in their purse in these situations.
 
If there was a meeting, shouldn't you have received a copy of the minutes? Even if you didn't attend. Sounds fishy to me.

Ask for a copy of the minutes as a first step.
 
Hi,
firstly ask to check meeting minutes to see what's been going on (there should have been a vote at the AGM or a special EGM called for this type of thing to get voted on and passed) and talk to the committee chairperson - they also should def get more than one opinion and quote for works required. For that kind of money - they could also borrow rather than asking a special levy - perhaps they're not aware of that option. Also, they should have checked their insurance policy, to see what's covered, and obviously, the original building warranties.

Pays to get on these committees, even as just a general member, just so you know what's going on. Owners are all notified - but usually after the decisions have been made.

Cheers,
D
 
Hi and thanks again for the replies.

Yes, I'll definitely sign up to the committee.
With regards to the committee meetings, the decision was apparently approved on 27 April 2010. Apparently the committee members are able to make decisions like this without notifying the rest of the owners who aren't on the committee.

Also I've rung Consumer Affairs and talked to the Building Advice & Consiliation Department and they've advised me that all buildings have a 10 year implied warranty against defects. They referred me to the Building Act 1993 Section 134. So given that my apartment is only 3 years old, it should come under the 10 year implied warranty.

So I then rang the Owners Corp and spoke to the manager but he is saying that the 10 year implied warranty doesn't cover the work that needs to be done in this instance!! (WTF?!) He wouldn't go into the specifics of what research he has done to come to that conclusion.

This is a direct quote from a Building Contractor Report:
"Upon my inspection of the site, I find that I agree with the report from Link 24. The leak is as a result of inadequate Waterproofing membrane applied to the rooftop area. As the extent of waterproofing inadequacy is unknown the only warrantable way of fixing the issue is to remove all tiles from the rooftop area, strip the membrane, and re-start the process from a bare concrete slab...."

This sounds like serious work to be done! So how are the original builders not liable for the cost to fix this?!

Anyway, I've downloaded the Owners Corp complaint form from consumer affairs website, but what should I put under "Details of complaint/alleged breach of the Rules, Act or Regulations"?
 
I own a unit in a complex that had waterproofing issues, or should I say, the builder did not do any real waterproofing when constructing the building. When I purchased the property early in 2006, the first engineering report had already been conducted and was to be sent to the builder under the 7 year warranty period for defects. We were aware of the defects and were advised that they would be covered via the builder and their insurance.

Once the defects were reported, the building company had changed its directorship, changed its name and made it incredibly difficult to track them down. Eventually we had to sue the builder via the strata's insurance company.

Work finally commenced in February 09 for part of the claim while the major waterproofing issue was still being fought. The second part of the remedial works commenced in Feb this year and is still going.

The executive committee did try to get us to pay special levies to have the waterproofing done but the majority of us were prepared to wait and fight it out. We have had to pay special levies for a project manager to oversee the remedial works but it was only a small amount compared to the cost per unit if we had not gone through the insurance.

If I were you, I would question why the strata are choosing to pay the special levy. Perhaps they don't want the delays that we have had. It was awful living there in that time, throwing out towels and clothing full of mould and the smell of mould through the unit but we didn't have the 35K to pay the special levy. We only had to pay around 3K once the insurance claim went through.

I'd push to find out why your owners corp believe it is not part of the warranty. We got many different answers from people we appointed for their opinion (I was on the executive committee for about 5 mins so I had some input of what was going on). Originally the insurance company gave the go-ahead to repair the damage within each unit eg repainting, electrical repairs but wouldn't fix the outside of the building as it wasn't within the insurance claim. This was just nuts as it was the external waterproofing or lack thereof that caused the internal damage. After much persistence the claim was allowed but i think we got 3 nos before we got a yes to being able to proceed with a claim.

Sorry it's a longwinded reply but we've lived this for 4 years now.
 
Welcome to the world of high rise aparments.

Your point highlights the reason why many more experienced property investors wont invest in high rise apartments.

For the record i am actually in your boat, i have moved in and out of property investments since 2000. Each time they are high rise (at least 5 stories).

From my own personal experience, the amount of work needed to investigate these issues is directly related to the number of unit holders in the body corporate.
Work and stress levels increase exponentially to the number of unit holders.
(especially as some people will just go with the free ride, in other words, you do all the work, investigation etc, some might follow, but just dont ask for any dollar contribution, whether thats legal fees or otherwise).

How to profit from such scenarios:
the market tends to fluctuate more extremely for high rise apartments.
During good times, people tend to over look such problems, its during these times that a good hard decision has to be made as to whether its time to take money off the table by selling some of the properties acquired.

During the more difficult times, it is hard to offload the properties. People become 'desperate'. So its very easy to offer 'low ball' offers. All you need is one person to say yes, and you can pick up very attractive deals that are self financed.

Having said all this, the answer to your question lies in the number of owner occupiers in your complex.
Generally speaking owner occupiers take more interest in their apartment.
Its not just an 'investment', its their home.

So my solution would be to try to identify those owner occupiers in your complex. If you can get enough owner occupiers on board, you can start to stur things up.

This happened with another one of my investment properties (sorry i cant provide details). But to cut along story short, one of the owner occupiers became very active. He got enough votes at the annual general meeting to kick out the old body corporate and has instigated a number of changes that has benefited all unit holders.

But again, this guy has done all the work, and the rest of us has just taken a free ride (including myself, i dont have the time, but i reckognised the ethics behind the person, and 'recommended' to some other unit holders that they divert their votes to this person).
 
I own a single apartment in an apartment block (9 stories) and recently I've received a letter from the Body Corp saying that they need to raise $90 000 immediately to cover the cost of fixing a leak in the roof barbecue area. They have had an independent contractor verify that "The leak is a result of inadequate Waterproofing membrane applied to the rooftop area".

$90k to fix the roof???? Holy crap batman !!!!
How big is the roof area???
One of our properties has a rooftop BBQ area with similar problems. It's approx 150m2 & we've been quoted $25k to have it fixed in a similar manor. (no tiles to pull up, just membrane.)


Having said all this, the answer to your question lies in the number of owner occupiers in your complex.
Generally speaking owner occupiers take more interest in their apartment.
Its not just an 'investment', its their home.

one of the owner occupiers became very active. He got enough votes at the annual general meeting to kick out the old body corporate and has instigated a number of changes that has benefited all unit holders.

But again, this guy has done all the work, and the rest of us has just taken a free ride (including myself, i dont have the time, but i reckognised the ethics behind the person, and 'recommended' to some other unit holders that they divert their votes to this person).

We did this at our residence. The BCM were crap, over charging, implementing & charging for unrequired things, & were treating the owners like idiots. 2 owners have no interest / input to anything but the remaining 3 were very active.
We've replaced the BCM, we've approved & completed beautification of the common areas, We've dealt with a "difficult" tenant in one of the uninterested owner's properties. + other things.
It has been extremely satisfying.
Then we moved out & rented that property as it was just too small for our needs.
 
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