Saving for the building’s future expenses is where financial irresponsibility is most likely to be found in strata land. ‘Why pay now, what we can pay tomorrow’ is the line of argument.
Some agree and would rather keep their hands on their money and make it work for them before parting with it to a lazy investment in a term deposit by the owners corporation. It’s true that there is probably a better return on investment capital then a low interest bearing deposit account of the strata organisation. But here’s the problem with that argument, when the big bucks have to be spent and a special levy struck to pay for the work, those without the funds will argue persuasively for less or no expenditure and the building falls apart.
This is a looming problem for governments everywhere. Attempts have been made to make rolling 10-year replacement studies and progressive savings compulsory to avoid massive waste and deterioration of our high-rise apartments and high-density townhouses. In the main however these legislative initiatives are toothless tigers because the laws merely say that a study must be prepared and considered. Asking an owners corporation to consider a study to take funds from them individually and put it away to cushion the blow for future owners of the day when the money has to be spent, is about as effective as shipping lettuce by rabbit.