Levies should be set at the budget meeting based on the expected running costs of your building or complex.
All owners should be at the meeting so that there can be consensus on what owners want included and after agreement the levy is set.
But the levy will depend on what type of owners a given building or complex has.
Some building owners just want the basic.
The concept here is to have a minimal budget and no frills.
Nothing wrong with this, as long as owners understand that if you don’t keep up with maintenance it will come back to bite you in the budget.
You should never cut the budget to set the levy at a level that you want to pay.
Budget is king.
Other buildings have owners that are looking for a good standard of living and are prepared to pay for some extras.
What these extras are depends on what the owners of these buildings see as essential and what they see as a luxury.
In this type of building the majority of residents are likely to be owners.
They will want to see their building well looked after, the gardens neat and well maintained and would be prepared to pay for small extras.
They will want pretty gardens and will pay for its upkeep to the standard that they want to see.
The painting will be done more often and not left until it is peeling.
The roofing will be routinely serviced rather than waiting for leaks to happen.
Top-of-the range buildings will go that extra mile to have security and comfort.
Here the owners will be upgrading their building with better security, CCTV, making changes to make the building look more modern and won’t be afraid to pay for what they want.
Full-time security, for example, can be really expensive, except in the largest buildings, but if you want that level of security and are prepared to pay for it, you could have it in the smallest building.
This can cause friction.
For example, when it comes to spending money on painting, an owner that wants to sell in the next year will vote for a basic painting job at the cheapest price so that the levy is not raised to a level that will put off potential buyers – even when the painting job will not last.
At the same time, an owner that is staying there will want the job done properly and to last the full eight years.
This is why it is so important for all owners to go to the budget meeting so that they can look after their interest.
- Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant with work across the country as well as Eastern Europe and Australia.