In early 2023, Jessica bought her first property, an apartment in Melbourne’s northern suburbs.

Her delight turned into despair when she received a $61,111 special levy for building defect works from the building’s body corporate soon after settlement – due in five days.

Unable to afford the unexpected lump-sum payment, Jessica says she was left facing bankruptcy and fearing her parents, as her home loan guarantors, could lose their home.

She says the vendor, agent and her conveyancer did not make her aware of the upcoming levy before purchase. The New Daily contacted them for comment.

Jessica’s situation highlights the risks involved with strata property purchases.

Jessica was initially ecstatic to buy her first home.

“How can anyone get that kind of money? It’s just unfathomable. That is someone’s life savings,” she told The New Daily.

“This has ruined my life … I wanted to start a family, I wanted to set down roots. And that’s all taken from me.”

Timeline of events

Jessica says she asked the agent what the body corporate fees would be before buying, and the special levy was not mentioned.

But she says she was told to sign a contract of sale before making an initial offer on the two-bedroom apartment, for the bargain price of $300,000.

She signed the contract on January 14, 2023, thinking her conveyancer would notify her of problems during the cooling-off period.

On January 23, the body corporate struck a special levy, charging owners to fix the building’s defects before its combustible cladding could be replaced.

Jessica had noticed in her contract that the repairs were supposed to be done in 2020 – but didn’t realise the contract did not specify whether the repairs had been completed.

She says both her conveyancer and the vendor were notified of the upcoming special levy before Jessica settled on the property in April 2023, but didn’t inform her.

Last minute lifeline

The body corporate was initially unwilling to let Jessica pay in instalments.

Months into her search for help, Jessica found a pro bono lawyer through the National Debt Helpline in February 2024, just days ahead of a VCAT hearing on the issue.

After taking the matter to VCAT, the body corporate agreed on a payment plan.

Jessica will have to pay $15,000 upfront, then $1500 per month until the debt is paid – which will take about two and a half years.

As she also must pay her mortgage and regular bills, Jessica will have to move out of her new home to stay afloat.

Jessica unsuccessfully tried to cash out her annual leave and access her superannuation, and her friends convinced her to make a GoFundMe to raise a small portion of the levy.

“It’s like … I’m trying to not drown,” she says.

She still hopes to take her conveyancer to court for alleged negligence.

How to avoid pain

SQM Research managing director Louis Christopher said sellers, agents and conveyancers must not mislead or deceive.

Buyers are also often unaware buying a property under strata means paying future body corporate fees and levies, so he recommended hiring a buyer’s agent.

“Before you sign the contract, try to get access to [the body corporate minutes],” Christopher said.

“If they decline to give it to you, then that’s probably telling you something.”

Financial Counselling Victoria executive director Zyl Hovenga-Wauchope said body corporates are not required to make hardship arrangements allowing owners to pay debts in instalments.

He said this is concerning and can lead to forced bankruptcy.

“In Victoria, 4 per cent of bankruptcy filings are related to stratas,” Hovenga-Wauchope said.

“But there’s quite a bit of variation across the states [and there] does seem to be quite a large proportion of bankruptcy filings because of … strata levies.”

CoreLogic head of research Australia Eliza Owen anticipates body corporate fees and levies will become a bigger issue as more people buy apartments.

“Something that I noticed … is the failure of apartment owners to address some of the maintenance issues in their building until it does get to the point where there’s a major restoration work involved,” Owen said.

Before settling on a property, she said it’s important to get a copy of the strata report to check for already raised special levies, along with structural issues.