Question: After buying an old apartment, we discovered concrete cancer in the floor. There is little money in the owners corporation’s sinking fund. We can’t really move in until the work has been done. What do we do?
We just purchased an apartment built in 1970. The agent and strata manager told us the bump in the floor was water damage, but after ripping out the flooring we have discovered it is concrete cancer and extensive work needs to be done.
My conveyancer says the concrete cancer is strata’s responsibility to fix, but there is little to no money in the sinking fund. Will insurance cover this? What can we do?
We can’t move into the apartment or renovate with a big hole in the middle of the living area. It’s costing money by the day.
Answer: If there is little or no money in the sinking fund, the owners may need to raise a special levy to have the problem fixed.
Thanks for your question. Based on the information you’ve provided I’d agree with your conveyancer that concrete cancer in the concrete floor of the unit would be the responsibility of the owners corporation.
If there is little or no money in the sinking fund, the owners may need to raise a special levy to have the problem fixed. In that case you would have to pay your share of that levy, based on your unit entitlement (UE) in the building. If, for example your UE is 5%, then for every $1,000 levied you would have to pay $50. Your quarterly levies are also calculated based on your UE.
Regarding insurance, you would need to check the terms of the policy but I think it’s unlikely that this situation would be covered by strata building insurance.
This post appears in Strata News #634.
Michael Ferrier EYEON Property Inspections E: michael.ferrier@eyeon.com.au P: 02 9260 5510