News Stories

What is Strata Finance used for?

August 2016

What is Strata Finance used for?

Recently we posted an article ‘What is Strata Finance?’  which explained how strata finance works for a strata community, but what exactly is it used for?

Essentially, finance can be used for renovation or rectification works, emergency repairs, green initiatives, insurance premiums, litigation or other capital requirements. 

Following are some common scenarios where considering strata finance may be the best option to fund works.

Scenario 1   

Scaffolding needed to carry out high repairsbuilding repairs

When there is scaffolding required onsite to do maintenance or urgent repairs the committee should consider whether there is anything else that needs to be fixed or requires maintenance at heights which can be carried out at the same time, as scaffolding is expensive. All ‘work at heights’ should be grouped together to minimise the scaffolding expense including plant items, fixtures and fittings such as cooling towers, air-conditioning units, awnings, roof and/or gutter replacement, cleaning, painting, balustrades, waterproofing membranes, building wash down and so on. 

The body corporate or owners corporation may not be able to afford the extra work with their current sinking fund balance and a special levy may not be an option so strata finance may be the solution. All work at heights can be completed at the same time, saving money in the long term.

Scenario 2 

Fire safetyfire safety

What if the fire department presents your strata community with an order to fix fire safety installations within a short time period? Fire engineers and installations plus council approval, etc. can be very expensive. To avoid fines and potential dangers, taking out strata finance is definitely a quick and easy option.  

Scenario 3 

Safety hazardssafety hazards

Major safety hazards can result in costly court cases, especially if someone is injured. To avoid court costs, hefty fines and having to repair or remove the hazard, it is best to address safety before something happens. One example of this would be if there was a staircase that did not comply with the Australian Standard and someone fell down them. 

It can sometimes be difficult to find spare funds to address safety concerns but using alternative funding sources such as strata finance will ensure a safe living environment.

Scenario 4 

Replacementsreplacements of piping

Replacement of hot water heaters, changing to a metered water system, installing CCTV as a result of major theft or a home invasion, booster pump fails, renewing fire panels, changing to LED lighting in the common property to save money are all common requirements in strata title communities. It might be better to borrow the funds if the savings offset the interest paid. StrataLoans could be the solution everyone is happy with.

Scenario 5 

Lift replacement or repairslift repairs

Have you tried walking ten flights of stairs with your groceries and having to make four trips to the basement where your car is parked just to get it all because the lift is out? Having to wait days, weeks or months for lift repairs or replacement is just not an option. 
If this work was unplanned as part of the regular maintenance schedule then looking at the option of strata finance may be the solution.

If you have been presented with any of these challenges in your strata community, check all of the options available to see which works best for your owners. Ignoring them definitely should not be an option. 

Contact StrataLoans today to discuss your options by calling 1300 785 045 or visiting the StrataLoans website 

Return the News Home


Wednesday, August 17, 2016