Regis Towers Hit with $1.6M Strata Bills
Australian Financial Review, 22 April 2003
Residents involved in the country’s largest strata scheme, declared insolvent in February, will be forced to pay a special levy of up to $6000 each within 10 days.
An electricity bill of up to $440,000, legal fees of $164,000, and almost $1 million in unspecified bills must be paid at the controversial Regis Towers residential complex, in Sydney’s southern CBD.
About $1.6 million is needed to pay out the strata scheme’s creditors and to continue essential maintenance at the tri-tower complex, which holds 653 apartments.
The Consumer Trader and Tenancy Tribunal ruled for a complete overhaul of the building’s management structure after it was found its budget was more than $800,000 in arrears.
Expensive litigation against the developer Meriton Apartments concerning alleged building defects and fire safety issues has been in train since 1999.
A new strata manager, Strata Associates, was appointed to the $400 million complex, which has estimated running costs of more than $3 million a year, by the tribunal.
A letter this week addressed to owners from strata manager John Edwards , of Strata Associates, said he was being “pressured daily by creditors seeking settlement of their accounts, that in most instances extend back to 2002”.
“Some suppliers have withdrawn their services until the outstanding accounts have been settled,” he said.
But former executive chairman of the body corporate Stephen Goddard said the special levy had come without warning or an offer to pay it in instalments.
“The timing could not be worse it is immediately after the payment of the BAS and just before the May 15 filing date for tax returns,” Mr Goddard said. “Failure to pay on the due date will result in interest charges. There will be substantial financial stress in this for many of us.”
Meanwhile, a letter sent by Meriton general manager Peter Spira to lot owners concerning the special levy questioned Strata Associates’ stewardship of the scheme while the body corporate continued litigation against the construction giant.
“We have no indication this [the levy] will be used to fund the pre-existing liabilities of the scheme, or the future costs of litigation or both,” the letter said.
“In any event, it is clear [from past behaviour] that some people will not pay, and we are left wondering who will pay for the shortfall.” Regis Towers unit owners were asked to provide Meriton Apartments with a $1 million security for their litigation over building defects earlier in the year.
The builder wants to ensure there is money in the body corporate coffers should the litigation fail.
Mr Goddard said Meriton was attempting to blame the previous committee for failing to remain solvent but the owners corporation were compelled “to allocate large resources to make a developer behave responsibly”.