Question: Is there a formula for setting strata levies to cover scheduled capital works and avoid a shortfall? We have identified a situation where projected levies will result in a shortfall.
Answer: There is no accepted ratio for the determination of funds to be raised.
There is no set “prudent” amount or accepted ratio for the determination of funds to be raised.
For the purposes of the capital works fund you should engage a quantity surveyor or valuer to professionally determine projected funds required. The surveyor/valuer will prepare a 10 year plan to assist in determining funds required to meet anticipated expenditure.
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Please note that this article is provided for information purposes only and is not a substitute for professional legal advice.