Do Committee Decisions Influence Property Values?


An enriching part of the strata living experience is exposure to variety and diversity. After all, they do say variety is the spice of life! However, when decisions on expenditure, upgrades and projects must be made collectively, this range of varying opinions and personalities can complicate the process.

Committee members are tasked with representing all owners in the decisions they make.  Where the committee consists of a small number of people, representing sometimes hundreds of lot owners, this can seem like an impossible task. Finding an appropriate balance to keep everyone happy is easier said than done.

As the strata committee, your decisions regarding the quality and quantity of maintenance, projects and upgrades will have important ramifications for the property’s value in the market. However, these decisions have to be made with the interest of all lot owners in mind, and this can seem unachievable when committee members realise not all lot owners share the same beliefs, have the same income stream, or the desire to fund the same improvements.

You’ll know of other committee members or lot owners who, looking to maximise their investment return, are keen to upgrade pools, lobbies, lifts, painting and gardens. On the other hand you’ll know owners and committee members who want to keep levies low by making only necessary changes and minimal improvements.

These two categories, savers and spenders have different long-term goals and consequently, conflicting beliefs about what decisions the strata committee should make and how the strata community should be run.

So how does it play out?

The Savers:

  • Owners who are Savers will save money by cutting budgets and keeping levies low, engaging contractors at the lowest price, and fixing items rather than replacing them. This can cause other owners to resent paying their levies, as they believe nothing is being done to improve the community. The Spenders do not agree with the building being simply ‘maintained’ rather than enhanced.
  • If a major project or refurbishment is needed suddenly, the need for a special levy may arise. This occurs if there are insufficient funds available in the sinking fund, due to the lower levies.
  • The Savers see lower levies as a draw card for potential buyers. On the other hand, the Spenders may see this as selfish by only considering their own needs and not laying the groundwork to increase property values.

The Spenders:

  • These owners and committee members believe in upgrading the property to stay in touch with innovative ideas. They want a budget to be put in place for the replacement and renewal of items to ensure the strata scheme stands out from the rest. Their focus is ensuring that the value of the property will continue to rise.
  • The Savers may resent money being spent on long-term items, which are non-essential. For instance, repainting can be viewed as a luxury which should be deferred.
  • The Spenders believe that the increase in levies will be paid back with the achievement of high property values. This type of attitude irritates the Savers who are opposed to ‘fixing something that is not broken.’

There is no inherently superior approach. A large part of community living and community governance involves accommodating for and compromising with different viewpoints. Luckily, most communities contain a sensible balance of both Spenders and Savers.  As part of the committee, you may have to walk the middle line to represent all owners. There will be times where you may have to convince Savers to spend as, put simply, a run down strata community is not desirable. However, it is reasonable to want to keep levies low, so sometimes repairs may be a better option than replacement.

So, how can you work with what appears to be competing interests? It can be as straight forward as expressing committee decisions in a way that reflects the values that all lot owners agree are important.

Securing asset value, ensuring proper maintenance, minimising running costs, and removing risks to health and safety are ideas all lot owners can get behind and explaining expenditure in this way can help show your committee is dedicated to representing all owners’ interests.



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1 Comment

Geoff On October 20, 2015 | Reply

Useful intro

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