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Victorian property owners are being prompted to immediately begin fixing potential issues with combustible cladding repairs with the offer of a strata loan.
Lannock Strata Finance has touted the benefits of strata loans as an option for property owners who may be struggling to come up with the money to replace the dangerous – and potentially deadly – material.
Just last year, RMIT University estimated that the repair bill for all Victorian apartments covered in flammable cladding could cost $1.6 billion.
Lannock CEO Paul Morton has noted that while the Victorian state government has begun providing compensation to those at extreme risk, many owners corporations are unlikely to receive any compensation.
Some owners corporations are already facing prosecution from local councils.
According to Mr Morton, a strata loan can “bridge the gap between government assistance and the total cost of rectification of combustible cladding”.
“For those owners still in limbo waiting to hear if they will qualify for compensation from the Victorian government, a Lannock strata loan will allow owners to resolve occupational health and safety issues as quickly as possible,” he added.
He considered this as “particularly important for the many owners corporations [that] have already received notices from local council to rectify the defective cladding within a few months or face criminal prosecution”.
According to the CEO, many owners are facing difficulty in obtaining personal finance or increases to their mortgages in order to be able to fund a special levy to pay for repairs.
“Lannock provides a viable and immediate funding alternative for all owners,” he stated, noting Lannock as able to immediately finance works without a single owner having to increase or refinance their mortgage.
“Later on, if their property does qualify for government assistance, owners corporations can use these funds to repay the strata loan early – without penalty.”
He also touted the benefits of owners choosing an interest-only period for its ability to minimize cash outflows: “Owners have time to evaluate their personal financial position and work out their best options.”
“If they choose to sell their property, they can do so at a time of their choosing when market conditions are best rather than be forced to sell under the current adverse conditions,” he commented.