In one of my previous articles, Home Renovations: Unforeseen Costs, most people ended up blowing out their budget when renovating their home according to a survey by realestate.com.au.
One of the many renovation costs that homeowners have to factor in into their budget is floor plan changes.
With good planning, people don’t need to make radical changes to the floor plan 90% of the time. However, a small percentage of homeowners, especially those wishing to renovate a property within strata, may find themselves having to foot the bill for an unforeseen cost.
I personally found myself in this position. Early last year I bought a house which is nestled within a 5 property strata complex. I wanted to raise a beam and butt it up against a higher beam to provide a larger opening between the kitchen and living area so I could make the kitchen larger. A simple task I felt and one that was inexpensive too. How wrong was I.
The strata manager insisted that I book and pay for a special Extraordinary General Meeting. She told me that I had to get in an engineer to provide documentation about my plans and I could not book the meeting until I had said documentation. In the meantime I had already signed off on a brand new kitchen to the value of $12,000 and paid a $2,000 deposit and a seperate $1,000 deposit for the $3,000 bench top which I was getting separately. I had already signed off for my builder too at $800. Finding an engineer who would come was time consuming especially since the Easter Holidays was approaching but I managed and submitted the information to strata. I also had to get my solicitor to write new by-laws. Finally, I could have my meeting which I was told I had to provide a 2 week’s notice to committee members so they could attend. Sadly, the strata manager couldn’t deliver on her promise and the proposed meeting was pushed back yet another week to 28th April. I finally had my meeting almost 5 months after buying the house only to find none of the committee members ever had any intention of turning up and had all provided proxies. At least I got permission to raise the beam – yay – but it was at a huge unforeseen cost that I would not have incurred if my property had not been part of a strata complex.
Not only did I have the extra cost but due to the time it took for the approval I also lost my kitchen manufacturer (they wanted to increase my signed agreement by 25%) , the builder I had signed with now couldn’t do the work for me and the prices had increase dramatically for the bench top too.
So here were the costs incurred:-
Special Extraordinary General Strata Meeting $469.70
Engineer’s Report $495.00
Solicitor $350 (though for me free as a friend helped and didn’t charge)
Builder – extra $1,470.00
Kitchen Manufacturer – extra $6,120.00
Bench Top Manufacturer – extra $1,700.00
So all up, the extra unforeseen costs amounted to $10,604.70 which does not include my time and all the takeaway/dining out meals I had to buy because I didn’t have a kitchen. In fact the kitchen didn’t end up going in until mid September. That’s 8 months after I bought the property. So that’s a lot of meals!
Anyway, allowing a small cushion in your renovation budget to factor in any unexpected expenses is the best way for renovators to handle this matter. In my personal experience, my total renovations came in at $42949.68 but I had only expected and budgeted for $35,000. In reality I ended up paying 25% over what I would have paid if my property was on it’s own title. An unforeseen cost because I wanted changes!