‘I have nothing left’: Stef is barely scraping by after her building received a $7.5 million bill
Updated . First published at
Today we launch a new series to raise awareness over apartment owner rights. Nine
Exclusive: Stefanie Iannelli was on her way to work when she glanced at an email that sent her spiralling into a panic attack.
The Sydney woman knew her older apartment complex, which was built in the late 1990s, urgently needed repairs to fix water ingress issues.
Stefanie Iannelli has been hit with a $52,500 bill for the waterproofing. Stefanie Iannelli
Do you know more? Contact reporter April Glover at april.glover@nine.com.au
She had no idea the construction bill would be millions of dollars – effectively sending her broke.
Iannelli is one of the many Australians facing sky-high strata fees, which is part of nine.com.au’s series to raise awareness over apartment owner rights and what you need to know before buying a unit.
“The first we heard about the loan was October 24, 2024,” Iannelli told nine.com.au.
“The date is burnt into my brain because I read this on my way to work.
“By the time I got there, I was in shock and having a panic attack [after] seeing for how long and how much I was going to have to pay.”
Iannelli’s apartment complex in North Strathfield has more than 120 units and required expensive waterproofing, a repair that is generally needed every 25 years.
She isn’t part of the strata committee but knew a bill for the work would soon come her way.
The construction work at Iannelli’s complex has already begun and is expected to last until the end of the year. Stefanie Iannelli
The damage is far greater than she imagined.
The massive project to waterproof the entire complex, which includes multiple three-storey buildings, has come at a cost of nearly $7.5 million.
Everyone’s share of the cost is slightly different, depending on the size of their unit. Iannelli said she needed to pay $52,500.
“I knew this was going to cost a lot, but I really had no idea,” Iannelli said.
“It would have been $52,500 – if I had the option to pay up front, which I didn’t.
“We got a four-year strata loan, which made it $64,000.
“So, $12,000 of that accounts for the interest payments.”
The bill without interest comes to $6.2 million. With four years of interest accrued, owners will pay a total of $7,583,685.
In NSW, a resolution approving a strata loan can be passed at a general meeting of the owners corporation and a majority vote is needed for it to be approved.
It is not possible for some owners to opt out of the loan and pay up front.
“Not everyone has a mortgage they can redraw on. So, of course, everyone panicked,” Iannelli said.
“Everyone voted the other way, and not everyone can afford it. I understand that.
“But you don’t get a choice, you are stuck with whatever the majority vote for, even if it’s not in your best financial interest.”
The total bill, with interest, comes to $7.5 million. Nine
Some balconies have been boarded off and blocked while construction takes place. Stefanie Iannelli
Iannelli believes it is unfair that she and other owners who could pay up front are forced to fork out another $12,000 in accrued interest.
The Australian College of Strata Lawyers spokesperson Amanda Farmer said Iannelli had no choice but to accept this payment plan.
“Majority rules in that respect,” Farmer explained.
Strata lawyer Amanda Farmer said the majority rules when it comes to strata loans. Amanda Farmer
“If just over 50 per cent of those present and voting at a meeting decide to enter into a strata loan of that type, then yes, one in, all in.”
Some loan companies offer what is called a “hybrid loan”, which allows individual owners to choose how they pay, either as a lump sum or borrowing.
But few lenders offer this type of loan.
“Strata managers don’t like them because it’s a fair bit of admin,” Farmer added.
“Then because you’ve got to issue your levy notices in a certain way, it’s quite complex from the accounting perspective.”
Iannelli lives alone and said the repayments have become an untenable financial strain.
The owners are paying off the loan in 16 quarterly instalments.
“The amount of money I have to put aside every fortnight, every payday, is more than my mortgage,” she explained.
“The regular strata cost is $2150 (a 76 per cent increase) at the same time as the four-year strata loan started which is $4028 a quarter, so I’m paying $6179 a quarter.
“I have nothing left.”
The repairs have already begun and Iannelli expects they will be completed by the end of the year.
It has been an inconvenience for owners and renters in the building.
Some balconies have been boarded off and blocked while construction takes place.
Iannelli said dozens of other owners who have been saddled with the bill are also struggling to pay it off.
“There are families, retirees, single people... two of my close neighbours are in transition to retirement,” she added.
“This really sucks for them too.”
Iannelli does not blame her strata manager or the owners’ corporation.
But she believes someone is to blame.
She bought the unit in 2007 and wonders if previous owners and members of the owners’ corporation potentially delayed repairs or failed to build up a sinking fund.
“Why didn’t we have the funds? If things like the waterproofing do deteriorate after 25 years, why wasn’t it in the budget?” Iannelli added.
“And here does that leave owners like me?”
Iannelli claims she is needing to pay for other people’s mistakes.
“I am also unable to sell as no one wants to buy in this building and I’d lose even more money,” she added.
“As the housing situation worsens in Sydney and more and more people are forced into strata living as we will never afford a house in the area we want to live, this will be more common.”
STRATA LAW IN NSW
- Under the state’s Section 100 of the Strata Schemes Management Act 2015, an owners’ corporation in can borrow money with an ordinary majority vote.
- If there is a majority vote to take out a loan, every owner must pay their proportional share of the resulting levies.
- You ordinarily cannot simply “opt out” of a scheme’s collective financial structure.
- The loan contract sits with the owners’ corporation as a collective entity, not as individual owner debt.
- The corporation pays back the loan by raising regular or “special levies” on owners.
- Owners’ corporations must offer a payment plan before taking any debt recovery action and must give 30 days notice before any recovery action for unpaid fees or levies.
Government support for mounting strata debt
The NSW government states that anyone dealing with strata debt can seek advice through the National Debt Hotline on 1800 007 007.
Owners can also apply for free mediation with NSW Fair Trading to help resolve any payment plan disputes.
In some rare cases, the NSW government can offer interest-free loans for urgent strata apartment works.
The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.
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