Navigating budgets in new developments
Posted on 19 February 2020
Melcorp Strata have experienced Owners Corporation Managers who can provide developers with the assistance needed to navigate through any complex situation, at any stage of a development – from the design phase through to Owners Corporation Management during completion.
One of the issues that may arise with new developments is purchasers refusing to settle – as they believe that the developer has misrepresented the amount of Owners Corporation fees prior to them signing the contract.
In 2018 VCAT reviewed a dispute between Rainczuk and Kangoala Pty Ltd where the purchaser claimed there had been negligent misstatement regarding Owners Corporation fees for their off the plan apartment purchase, which was subject to, and conditional on, the registration of the proposed plan of subdivision. After the subdivision, costs increased by 45% and the purchaser defaulted on the contract stating misrepresentation of the fees. VCAT dismissed the purchaser’s claim on the basis that VCAT found no misleading or misrepresentation from the vendor and that the purchaser had no valid reason to rescind the contract. Prior to the signing of the contract of sale, the vendor could only have been in a position to provide a draft budget/indicative figure for all costings including OC Fees, this was intended to give prospective purchasers a framework for the scope of costings. The contract of sale is very clear about this, with more accurate information about the outgoings only to be available after the plan of subdivision was to be registered.
At Melcorp Strata, we will work in close collaboration with you to develop a budget that efficiently services and maintains your development — in an as-new condition. We seek quotations from relevant service providers, as well as review properties of similar size and configuration within our portfolio to ensure costs are accurate. We aim to strike the perfect balance between setting realistic costs and achieving value for money, to ensure that fees are no barrier to entry.
As the leading Melbourne experts in strata management, we can also work closely with developers in setting up Owners Corporation Management rules that are critical for future efficient management of the buildings. Our strata managers can provide detailed advice regarding any leases or licenses relevant to the building.
For an estimate or quote please visit here or call Gino Marinaro on 0419 593 630 to discuss your next development.