‘Losing my life savings’: Melbourne mum trapped in apartment money pit after strata fees ballooned

Exclusive: A Melbourne woman is trapped in a property money pit after sky-high strata fees and a vape shop made it impossible to sell her unit – even at a $50,000 loss.

Southbank is a bustling inner-city suburb on the banks of the Yarra River in the Victorian capital. There are thousands of high-rise apartments in this area alone.

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Apartments in Southbank are uncharacteristically affordable for an Australian capital city – but nobody wants to buy Tarrlita Kay’s two-bedroom unit.

Kay told nine.com.au she believes it is because of the “enormously high” strata fees, driven mostly by a sky-high insurance premium to cover a vape shop at the bottom of her complex.

A string of firebombings targeting tobacconists and vape shops in Melbourne has caused commercial insurance premiums to skyrocket – and innocent homeowners like Kay are dealing with the collateral financial damage.

Kay said the insurance excess for the vape shop is $150,000.

“When I purchased that place, it was a bit rushed, so possibly it was overlooked,” Kay said.

“But I got this bill for body corporate fees, which were already about $5200 for the year, and then it went up to $7500.

“I bought it knowing that the strata fees were already a bit too high for me.”

Kay’s block has no amenities or any parking which would justify the high fees.

But this yearly bill has ballooned over the building’s insurance and unexpected costs associated with what Kay blames on poor building construction and water damage.

Co-founder of the Strata Owners Alliance Adam Promnitz said it is unfortunate that innocent Australians are paying the price for Victoria’s tobacco wars.

“We call for the supply of tobacco to be immediately banned in buildings, or adjoining buildings to where people live,” Promnitz said.

“Until the Victorian government brings the crime crisis under control, this presents an unacceptable risk to peoples’ lives.

“Allowing that risk directly beneath people’s bedrooms presents an unacceptable danger to residents’ lives and homes.”

Fees climb as Kay struggles to sell

Her first quarterly bill came as quite a shock.

“I had just moved in... I’m a single mum. I was furious, absolutely furious,” she added. 

“There is nothing at all. There is no management on site. There’s no parking.”

Kay is slowly losing any equity she built on the unit as the months roll on.

The frustrated homeowner is now desperately trying to sell for between $385,000 to $415,000, recently knocking the price down by $50,000 below the price she paid for it 2022.

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“As soon as people find out the body corporate fees, they’re out,” she said.

“Why would you pay that much for an apartment when you can go somewhere else, pay less, and have amenities?”

“I’ve spoken to another owner in the building, and he’s in the same position. 

“He tried to sell $50,000 under his asking price and could not sell it, so he’s just decided to keep his as a rental.”

Prices for apartments in Southbank have fallen by 1.2 per cent on average in the past 12 months.

The suburb itself is listed among the worst in Melbourne for hidden apartment defects, according to Forge Real Estate.

“Discounted Melbourne apartments in the CBD, Docklands, Southbank and St Kilda Road can hide costly strata defects, special levies and owners corporation disputes,” the team said in a recent blog post.

“Domain reported in late 2024 that several Melbourne unit markets were still below their previous peaks, including the Melbourne CBD, Southbank, and Docklands, while more recent apartment research shows inner-city values and transaction volumes recovering unevenly across precincts.

“For buyers, that creates a genuine entry-point opportunity – but also a concentration of stock where vendors may be motivated to sell because holding costs, remedial works, insurance premiums, or rising levies are becoming harder to absorb.

Kay’s precarious position may have been unavoidable, according to strata lawyer and spokesperson for the Australian College of Strata Lawyers (ACSL) Amanda Farmer.

An owners’ corporation is not required to volunteer information to prospective buyers about potential or planned fee increases.

“What it must do, on request, is issue a certificate honestly disclosing certain prescribed information. This includes levies struck (or ‘fees’ as they’re called in Victoria), current insurance details, and any upcoming works,” Farmer said. 

“Potential future increases aren’t on that list, so it’s up to purchasers to do their own due diligence.”

Farmer warned prospective apartment owners to be mindful that strata fees are seldom stagnant.

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As the cost of properties rise and cost of living continues to climb, so will the cost of owning a unit.

“Be sure you’ve factored an increase into your budget. And when you are looking at records, look for things like: expert reports and engineers’ recommendations about the repair or maintenance of the building; disclosures made to the insurer; copies of legal advice,” she added.

“That’s where you may find hints that levies are about to increase.”

‘Constantly paying them back’

Kay’s unit is still for sale, but she doesn’t have much hope it will sell any time soon, particularly as the Melbourne market faces a downturn.

She is now renting the property out as she anxiously awaits a willing buyer.

“It has to stay for sale, because if I take it off for sale, I’ve got to pay up the advertising fees,” she added.

“I’d love to take it off so that I could wait until the market changes, but I’m really in a tight place.”

The unrelenting strata fees remain an albatross around her neck.

“I’m constantly trying to pay it back,” Kay said. “I’m basically losing my life savings through that apartment.”

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