Sydney woman shell-shocked by $60k bill for Alexandria apartment
A Sydney woman who was excited to buy her first home has seen her mortgage payments jump by $700 a month and now has been hit with a massive bill.
A young Sydney woman has been left “shell-shocked” by a $60,000 bill which she feared would force her out of her home.
Sophie* purchased a one-bedroom unit in 2019 in an inner Sydney city suburb for $620,000 and was happy to escape the rental market.
But her dream home has turned into a nightmare as the apartment owner has been slugged with an almost $60,000 strate levy bill that is due to be paid in just three months.
“It was obviously very exciting buying my first home. I didn’t have to constantly bounce around renting and there was more stability … Even with interest rates now it’s still manageable, my mortgage has gone up $700 a month but some people’s rent has gone up $200 a week, so I’ve got that bit of control,” she told news.com.au.
“But the current situation came up … after all the interest rate rises, Covid and lockdowns and it’s like really? A $60,000 bill which not many people have sitting there.”
The 31-year-old said her entire apartment block in Alexandria has been slapped with a $7.85 million bill – seen in strata meeting documents – due to waterproofing issues.
This means a special levy has been issued for $2.2 million for the administration fund and $5.65 million for the capital works fund, according to strata documents seen by news.com.au.
Sophie said waterproofing issues in two apartments in the building had been identified when she purchased – but she said she was informed at the time that it was a minor problem. She has since been shocked to discover the extent of the problem.
One of the apartment owners has launched legal action in the NSW Civil and Administration Tribunal (NCAT) as a result of the waterproofing issue, according to strata minutes seen by news.com.au, that discuss the potential costs of engaging lawyers to defend the action.
“Basically when I bought the apartment there were one or two apartments that had waterproofing issues …”
“It got to the point three years later where one of the units is actually suing the owners corporation because they have mould inside and they have gotten tests done that show it has impacted their health,” she claimed.
“Now they are doing the whole waterproofing thing for the whole complex … and they have hit up every unit based on their lot size and you have to pay within three months.”
Sophie’s strata committee confirmed there were some mould issues in the building, but said the suggestion the NCAT action had been launched “due to mould issues is expressly rejected”.
“We confirm that the strata committee offered to provide mould cleaning, dehumidifiers, and air purifiers to affected units and has not received any evidence to suggest that health problems are experienced caused by mould in the building,” they added.
The strata committee told news.com.au that the building was 20 years old and “it is overseeing the remedial works to ensure the integrity of our building is restored and maintained”.
“At all times, our priority is to ensure all residents in our complex have a safe and healthy place to live,” they said.
“To be clear, the strata committee expressly rejects that, any time, it has failed in its obligations to manage the building and finds the allegations deeply offensive. We are greatly concerned about the baseless nature of these accusations.”
Sophie said having to find $60,000 in a short space of time – with the bills due for payment in May, June and July if owners chose not to use an option that would slug them with interest payments on top – was stressful.
“I was shell-shocked. There were a few options and we obviously had to vote on them but one option was not viable as it was to start work in two years,” she said.
“We got pushed into a corner as most of the options you couldn’t do it without affecting so many other people financially. This was the best option but it’s still not great as some people have to come up with $120,000 in (potentially) three months.”
A letter to homeowners delivering the special levy bill stated: “If you are unable to pay the instalments by the due dates, please contact our office to set up a payment plan, to avoid the risk of debt recovery action being taken. Overdue levies will incur interest at the rate of
10 per cent, in accordance with the strata legislation.”
Sophie said aside from the money the whole project is also expected to take three years with each apartment block due to be slapped with scaffolding for three months too.
The strata committee said it had “always taken the appropriate steps to find the best solution to deal with water ingress issues” and following initial investigations it “engaged an engineering firm in 2020 to report issues and advise on necessary repairs”.
“Prototype repair works on balconies with water ingress issues started in early 2021, as
advised by the engineering firm. Prototype remedial works are necessary to identify and
address potential issues before executing full-scale remediation,’ they said.
“They allow for testing and evaluation of proposed solutions, identifying hidden problems and mitigating risks. Overall, the prototype repair works was a necessary step to ensure the success of the remedial project.
“These works were delayed by inclement weather, lockdowns, and labour shortages as a result of the Covid-19 pandemic.”
Sophie claimed the issue had devastated some homeowners with a lot of “anger” and “swearing” in strata meetings.
“One lady who was speaking on behalf of quite a few owners — she had spoken to 10 owners who are going to sell because they can’t get the money,” she claimed.
“I’m assuming I am going to see a lot of for sale signs.”
The event manager said one of her friends had been forced to move in with her husband’s family on the Central Coast and rent out their apartment just to try and pay off the huge bill.
Sophie said she had also contemplated selling and moving back in with her parents, which wasn’t appealing at the age of 31.
“I’m very fortunate my parents have decided to cover the bill for me so I’m one of the lucky ones but if I didn’t … I would be in debt for much longer,” she noted.
However, she added it has impacted her future plans.
“I do feel a bit stuck as I am putting so much more money into this place. I did want to leave in a few years. I was always planning to sell and upgrade a bit but it’s put me off as so much money is going into that so why would I do that to break even?” she said.
“The whole situation is grossly unfair.”
With a case currently before NCAT, Sophie said they also had to vote to engage lawyers to defend the claim with an estimated bill showing it would cost at least $10,000, according to strata documents.
She described the whole situation as a “mess” and feels sorry for anyone who has had to make the tough decision to move out.
“I would have been one of them and I’m lucky mummy and daddy have saved the day,” she added.
“I feel bad for people who have had to have tough conversations and make tough decisions when it’s been their home for years and they have had to up and move.”
The strata committee said the “matter of costs was properly evaluated, and all expenditures were reasonably incurred” and they “had been transparent in relation to the issue of costs”.
“Tenders for the remedial works were presented at the AGM in late 2022 and owners voted to
proceed with the full scope of works recommended by the engineering firm,” they said.
“Funding options were presented at an Extraordinary General Meeting earlier this year, and
owners voted to raise special levies over three months, with a strata loan as an option for owners who cannot pay upfront.
“This allows remedial works to start sooner and not be delayed for another 24 months, as remedial builders will not enter into contracts and commence work without assurances the funds are in place, or guarantees they will be paid for the project.”
The strata committee added it is “unfortunate that building costs have increased due to inflation and the pandemic”.
“Additionally, new Design and Building Practitioners legislation introduced on 1 July 2021 requires more stringent controls and accountability from architects and builders, in the form of higher insurance premiums and additional professional fees,” they noted.
*Name has been changed for privacy reasons