A recent article in a Perth newspaper suggests some developers are under-quoting the strata costs of some off-the-plan developments – some by as much as 50 per cent.
In the article, Jeannette Anderson, founder of strata report compiling company Strata Data WA, says, “The developers sometimes set unrealistic budgets. When they have sold 60 to 70 per cent of the apartments, they transfer ownership [of the strata company] to the owners. “In the first year of the handover, the owners have to do the budgets and they get a list of the facilities. Once they’ve crunched the numbers, levies sometimes rise by 50 per cent!”
Lia de Sousa, General Manager, Strata at Whitbread advises, “Buyers need to do their research when they purchase apartments off-the-plan and seek specialist advice.”
“Lower strata levies may sound appealing but buyers beware! If your strata levies are too low, you are not only likely to experience price hikes, but you could be exposing yourself to great risk if your property has been inadequately insured.”
Whitbread Insurance Brokers advises you to;
- Ensure that your strata fees have been calculated by an experienced professional.
- Get involved in their Owners Corporation, know the Strata Manager and attend the meetings.
- Be aware that the calculations for off-the plan developments can be undertaken up to two years prior to moving in. While some price rises are factored in, legislation changes, building regulations and rises in energy or labour costs can impact costs substantially.
- Insure your property through a specialist strata broker with the required legislative knowledge and industry experience.
If you are looking to insure an apartment off-the-plan, speak to one of our specialist Strata insurance brokers today by calling 1300 424 627.
This Whitbread insight article is not intended to be advice and you should not rely on it as a substitute for any form of advice. Please contact Whitbread Associates Pty Ltd ABN 69 005 490 228 Licence Number: 229092 trading as Whitbread Insurance Brokers for further information or refer to our website.
