Does your sinking fund cost you money

Yes.  I will amend to make it clearer.

@Waratah said:
When you say:

I personally think strata loans are a more equitable form of raising finance and they are probably less likely to scare the horses.

do you mean fairer than, say, a special levy? Could you explain why you that is?

Well, it’s just my opinion but do you think it’s fair that some people might have to sell their home, and at a reduced price because of the special levy, while others who happen to have the money in the bank can ride out the storm?

This is particularly hard on people who have recently bought in and are only now realising that failure to have enough in the sinking fund – often because of the selfishness and neglect of previous owners – means they have to foot the bill.

Sure, there’s an element of bad luck involved but if there are ways of spreading the load, then why not take them.  

Investors, especially, are notorious for not pursuing defects when they have the chance, then scrimping on sinking fund payments to maximise their profits, then insisting on special levies to save a few extra dollars when they have been culpable in the work being needed and the money not being there to pay for it.

However, our esteemed “Better regulation” Minister could be looking at ways of allowing those who want to pay in one hit to do so, while those who can’t afford to pay a special levy can take out a strata loan.

Perhaps we should get Labor to suggest it then the government will adopt it as their policy, as they’ve done with ‘no fault’ evictions for renters.

That seems sensible – but you never know how hard or easy it is for individuals to raise extra loans.

One thing I would say, at the risk of sounding biased, you should speak to Paul Morton at Lannock (or one of his people) so that you know exactly what your options are.

I know they were recently involved in lending a large sum to a building so that it could not only refurb but add a couple of units to sell and pay for the refurbishment. It doesn’t have to be all negative.

The main thing is, you won’t be able to make an informed assessment unless you have all the information.  The strata loan bogeyman could turn out to be a blessing in disguise and you won’t know until you ask.