What to Check Before Buying Older Melbourne Apartments to Avoid Special Levies

Older Melbourne apartment buildings constructed 1960s-1980s—particularly red-brick walk-ups in Carlton, Brunswick, Fitzroy, South Yarra, and St Kilda—can face predictable lifecycle repairs to common property (roofs, external fabric, balconies, waterproofing, plumbing, and structural concrete), and those works are commonly funded via owners corporation special fees/levies (often called “special levies”). Pre-purchase due diligence should focus on the owners corporation certificate and records/register (to see disclosed fees, proposed works and “other work that may incur extra charges”), the building’s maintenance planning and funding (including whether there’s a maintenance plan and maintenance fund), and meeting minutes that show discussed-but-unfunded repairs that can signal imminent levy risk.

Typical Lifecycle Repairs and Costs

Roof replacements: Roof and guttering issues can drive major common property works (and special levies), especially where water ingress is present. Owners corporations have a legal duty to repair and maintain common property, and a practical maintenance plan helps forecast when roof works are likely.

Exterior painting and render: External repainting, façade repairs, and render crack remediation are common large projects for older blocks, especially where scaffolding and access requirements push up the scope of works. These are typically managed through the OC’s planned maintenance and budgeting processes (maintenance plans).

Waterproofing remediation: Balconies, basements, and external walls can develop waterproofing failures that escalate into structural and internal damage if not addressed early. The Victorian Building Authority has highlighted water ingress risks in balconies/roofs/drainage in its research insights.

Plumbing stack replacement: Whole-building plumbing renewals (waste stacks, shared water services, and common service runs) can be a significant capital event and often appear in OC discussions well before work begins—check minutes and OC records for early warning signs (quotes, investigations, and staged scopes).

Structural repairs: Concrete spalling (“concrete cancer”), cracking, and other structural defects usually require engineering assessment and coordinated rectification. (For background on reinforced concrete spalling and corrosion mechanisms, see VicRoads’ technical guidance on repair of concrete structures affected by reinforcement corrosion.)

Red Flags in OC Documentation

Depleted sinking funds: Very low reserves relative to known upcoming works increase the likelihood of a special levy. In Victoria, the relevant buckets are typically the administration fund and (where applicable) the maintenance fund rather than an automatically-required “sinking fund”.

Deferred maintenance patterns: OC minutes showing repeated delay of recommended repairs—roof works postponed multiple years, inspection findings reappearing annually without action—often point to accumulated liability that later lands as a special levy. Use the owners corporation register/records to verify what has actually been approved, quoted, or scheduled.

Engineer report recommendations without action: Building inspection reports recommending specific repairs or further investigations without corresponding approvals, budgets, or project planning can indicate owners delaying inevitable costs. The OC certificate should disclose repairs/maintenance or other work that may incur extra charges.

Self-managed OC warning signs: Self-managed owners corporations (no professional manager) in buildings requiring complex maintenance can struggle with record-keeping, contractor management, and long-term planning. When reviewing minutes/records, pay extra attention to whether there’s a credible maintenance plan process and clear budgeting.

Minimal meeting attendance: Low owner engagement at general meetings can create decision-making challenges when funding and governance decisions require a higher threshold. In Victoria, a special resolution requires 75% support (by lots or lot entitlements depending on the voting method).

Sinking Fund Adequacy Assessment

Benchmark targets: Compare current reserves against documented projects, quotes, and the maintenance plan (if the OC is required to have one, or has chosen to prepare one). Consumer Affairs Victoria explains what’s involved in preparing a maintenance plan and how works should be planned and budgeted.

Age-based requirements: Buildings approaching multiple major renewals at once generally need stronger forward planning, which is the purpose of a proper maintenance plan and (where applicable) a funded maintenance fund.

Recent levy history: Buildings that recently completed major works may have lower short-term risk, but buyers should still verify quality and whether issues are recurring via records/minutes and the OC certificate disclosures.

Self-Managed Versus Professionally Managed OCs

Self-management advantages: Lower direct management costs, direct owner control over decisions, and flexibility in contractor selection appeal to engaged ownership groups.

Self-management disadvantages: Lack of structured maintenance planning, slower responses to emerging issues, and limited dispute-resolution experience when owner conflicts arise can increase the risk of deferred maintenance and later levy shocks.

Professional management value: Experienced managers can support preventive maintenance planning, coordinated contractor procurement, compliance monitoring, and structured decision-making—particularly important where buildings have complex services and safety obligations.

Recommendation: Buyers should prefer buildings with clear record-keeping, proactive maintenance planning, and strong owner engagement evidenced through minutes and completed works, whether self-managed or professionally managed.

Carlton, Brunswick, and Fitzroy Walk-Up Patterns

Inner-north Melbourne walk-ups (typically 2-3 stories, 6-12 units, red-brick construction, 1960s-70s vintage) commonly face roof and balcony water-ingress risks and shared-area maintenance (stairs, common laundries, garages). Review maintenance planning and OC records for evidence the group is staying ahead of defects rather than deferring them.

South Yarra and St Kilda Larger Block Patterns

South Yarra and St Kilda 1960s-80s blocks (often 15-30 units, 4-6 stories, with lifts and more complex services) face additional challenges including lift renewals/upgrades and fire safety compliance obligations. Owners/owners corporations have ongoing responsibilities for Essential Safety Measures (ESMs), and ESM planning and reporting can materially affect OC budgets.

Pre-Purchase Due Diligence Checklist

Request and review:

• Last 24 months OC meeting minutes (not just 12 months)
• Current fund balances and contribution history (administration/maintenance where applicable) via OC records/register
• Most recent building inspection/engineering report (and any follow-up scopes/quotes noted in minutes)
• Prior special levy history and whether works were completed
• Current annual budget showing insurance, maintenance, and management costs
• Copies of major works quotes or tender documents if discussed in minutes

A practical starting point is Consumer Affairs Victoria’s buying an apartment or unit checklist, which highlights reviewing the owners corporation certificate and researching the OC.

Engage building inspector: Independent inspections can identify defects beyond what’s obvious in OC paperwork; the VBA also warns buyers to be careful with older stock and documentation timing in its guidance on what to look out for when buying an apartment.

Calculate total ownership costs: Add OC fees, rates, insurance, and a realistic allowance for capital works exposure to mortgage costs determining true affordability (especially where OC records show upcoming major works).

Negotiation Leverage When Issues Identified

Buildings with obvious deferred maintenance, low reserves, or documented major works planning provide negotiation leverage. If minutes and certificates show likely near-term special fees/levies, buyers can negotiate price to reflect the probable contribution—supported by what’s disclosed in the owners corporation certificate/records and the OC’s power to raise special fees for extraordinary expenditure.

Sellers often prefer price adjustments over funding special levies before settlement, creating scenarios where buyers accept properties as-is at reduced prices rather than sellers funding repairs or levies pre-sale.

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