Managing a strata can be quite a challenge, and it becomes even more daunting when faced with major repairs or maintenance. Asking owners to foot the bill through assessments can be tough, especially when the expenses are substantial. For some, paying out of pocket is possible, but for many it means going to the bank to arrange a second mortgage or line of credit. This is both labor intensive and inefficient, as hundreds of owners may be in this position.
A strata loan could be a viable option for both the Strata Corporation and its owners; and we break it down:
Why consider a strata loan?
🏡 Ideal for major repairs or maintenance of common strata property, such as roofing, garage upgrades, balcony replacement, window upgrades, elevator projects and more.
🌟 An alternative to owner levies or special assessments, which requires dozens or even hundreds of owners to arrange financing (and possibly force some to move).
💰 Enables strata owners to fund capital items over time, reducing the financial burden and allowing the asset to be paid for over a portion of its useful life.
Benefits to the Strata Corporation:
✅ Provides an alternative or supplement to a special assessment.
✅ Large expenses can be spread over several years.
✅ Flexible terms and rates might make it affordable and cost-effective.
✅ Repairs can start when needed.
✅ No personal credit inquiries required, and only the strata instead of all owners need to go through the process.
Benefits to the Strata Owners:
🌞 Reduces the impact on your personal savings or level of debt.
👍 Does not impose a significant or impossible financial burden, especially for those on a fixed income.
🚫 No personal credit application needed.
🏦 No need to visit your financial institution.
🤝 No personal guarantees.
📅 Smaller payments spread over time.
🏠 Strata financing enables owners to pass on the cost of major repairs to future owners if they sell, who benefit over its useful life.
Of course all borrowing has a cost, and if your owners are able to bear the burden up front that’s an important consideration, but it is good to know that it might be a possiblity!
Have an upcoming project? Run a free Eli Report to get a better understanding of your community.