Question 1

What are the benefits to me if the Strata Corporation borrows?

Accepted Answer

You have the freedom to get important capital works done now. You save money compared with sinking funds and special levies. You only pay for what you use when you use it. Strata finance also provides tax advantages for many owners. We recommend obtaining tax advice.

Question 2

Why should we borrow rather than have a sinking fund or a special levy?

Accepted Answer

Borrowing will be cheaper for most Strata Corporations and most owners, most of the time. A strata loan enables you to get important works done now rather than waiting as you accumulate the money. Your strata community can: Benefit from improved lifestyle and enhanced capital return now rather than having to wait Get all the works done in one go, rather than having to manage a staged project Avoid potential legal liability for the property not being properly maintained Avoid the financial distress caused by large special levies Be sure you have the funds to do the work rather than hoping that all owners can pay the special levy on time

Question 3

What happens if I sell my unit?

Accepted Answer

The owner at the time that a levy is due and payable has the obligation to pay that levy. If you sell your unit, you will be responsible for all levies due and payable up until the time of sale and then your purchaser will take over that responsibility.

Question 4

How will strata borrowing affect the value of my unit?

Accepted Answer

The loan will be a liability of the corporation and so a purchaser should take into account the fact that there is a financial obligation. But there’s more to it than that. The work which is funded by the borrowing will usually increase the value of the unit, and you wouldn’t be contemplating doing the work if the increase in value was not going to exceed the cost. The next important point is that, as borrowing by the strata will probably be your cheapest source of funds, borrowing to fund the work should add more value to your unit than the other two funding methods.

Question 5

What are the main features of Lannock’s loans?

Accepted Answer

Flexibility and choice. You can draw as many advances as you need. You have the flexibility with each Advance to specify: Term of Advance (1 to 15 years); Interest Only Period (up to 2 years); And, you can draw as many or as few advances as you need. You only pay for what you use, when you use it.

Question 6

What will you lend us money for?

Accepted Answer

Lannock will lend for any work or project that the Strata Corporation is allowed by legislation to conduct. This includes; repairs and maintenance, renovations, capital works, building defects, green projects, strata insurance, professional services, litigation, asset purchase, bridging finance, working capital – just ask us.

Question 7

What security do you take? Is there a mortgage?

Accepted Answer

None. We make a loan to the Strata Corporation. There are no mortgages, no liens, charges or caveats or any registration or impediment on the title of the common property or of any unit.

Question 8

Do I have to give a personal guarantee?

Accepted Answer

No. Owners do not give a personal guarantee or any personal financial information.

Question 9

How much does it cost?

Accepted Answer

The interest rate will depend on your loan requirements. Please contact us for a Funding Plan which includes indicative monthly repayments.

Question 10

What fees do you charge?

Accepted Answer

Smaller Loans : $600 approval fee Larger Loans : May be subject to establishment fees and line fees Additional Fees : Fees and recovery costs may apply for dishonours, defaults, arrears, or other unusual events We keep fees minimal. There are no facility fees, monthly or annual fees, commitment fees, etc. The loan contract provides a complete list of fees.

Question 11

I’m on the committee. Do I have some special obligation if the Strata Corporation borrows?

Accepted Answer

No. Being on the committee or being the person who signs the loan documents does not impose any extra obligation on you.

Question 12

Do you have a minimum or maximum amount that you will lend?

Accepted Answer

No, please contact us to discuss your needs.

Question 13

Do you require our strata manager or lawyer to certify that they have checked our bylaws?

Accepted Answer

No.

Question 14

Can we pay the loan back early?

Accepted Answer

Yes. Generally there are no penalties for early repayment.

Question 15

What does the loan pay for?

Accepted Answer

The 10-year, interest free unsecured loan pays for the remediation work and other services needed for your remediation under Project Remediate.

Question 16

Who is the borrower?

Accepted Answer

The Strata Corporation is the borrower. We do not lend to the individual owners.

Question 17

How much can we borrow?

Accepted Answer

The ACT Government will confirm your eligibility to the Private Buildings Cladding Scheme. Approved participants will be issued with either a preliminary or final approval. The Strata Corporation will then undertake a credit assessment with Lannock Strata Finance to gain approval to borrow the approved funds. Within the preliminary concessional loan, you can borrow for the tender and design costs (up to $100,000 incl. GST), along with up to $10,000 incl. GST for administration costs to administer the loan and fees associated with regulatory approval. Preliminary concessional loan funds are available up to a 6 month period. Within the final approval concessional loan, you can borrow 110% of the cost of eligible works and up to $10,000 incl GST for administration costs. Please note that access to administration funds is capped at up to $10,000 incl. GST for each Strata Corporation for the duration of the Private Buildings Cladding scheme. Therefore, if you initially had a preliminary...

Question 18

How much can we borrow?

Accepted Answer

Your credit assessment will be processed based on the forecast total cost of cladding remediation work including all investigation, design and construction costs.

Question 19

Are there any fees?

Accepted Answer

There are no set up or management fees associated with your interest-free loan and no hidden costs. You’ll find all the loan terms and conditions clearly outlined in the loan contract.

Question 20

Can we repay the loan early?

Accepted Answer

Yes, you can repay the loan earlier. All terms and conditions are provided in your loan contract.

Question 21

When will the loan paperwork be sent to my Owners Corporation?

Accepted Answer

Credit assessment instructions and a list of required documents will be provided to the Owners Corporation shortly after the loan information session. Upon sending Lannock all the requested documentation, the credit assessment process will be completed within seven business days. You will be notified by your loan relationship manager of the outcome. Following an approved assessment, the loan contract will be provided to the Owners Corporation to review and discuss. Your loan relationship manager will be on hand to answer any questions and to attend meetings.

Question 22

What documents do we need to provide as part of the loan application process?

Accepted Answer

We will require copies of various records of the Strata Corporation, such as a bank account statement, certificate of insurance, financial reports, etc. Usually, your strata manager will manage this for you. A full list of required credit assessment documents will be provided to the Strata Corporation after the loan information session.

Question 23

Is my Strata Corporation required to pass a motion to accept the loan terms and enter into the loan contract?

Accepted Answer

Yes, the Strata Corporation is required to table the concessional loan contract at a general meeting and pass a motion to resolve to borrow. This motion must pass at a general meeting. A copy of the required motion will be provided by your loan relationship manager in preparation for the meeting.

Question 24

Who is authorised to sign the loan contract for my Strata Corporation?

Accepted Answer

The Strata Corporation is required to table a motion to authorise specific individuals to be signatories of the Concessional loan contract. This motion must be passed at general meeting. A copy of the required motion will be provided by your loan relationship manager in preparation for the meeting.

Question 25

Who do I send my signed loan and other paperwork to?

Accepted Answer

All loan documentation and drawdown instructions must be original wet signature copies and sent via post or courier to: ‍ Lannock Strata Finance Unit 18.01, Level 18 227 Elizabeth Street Sydney NSW 2000

Question 26

How do you notify me of the outcome of my loan application?

Accepted Answer

Your loan relationship manager will provide notification on the status of your loan approval and will be available to answer any additional questions you may have.

Question 27

Who do I send my signed loan and other paperwork to  (ACT Government)?

Accepted Answer

All loan documentation and drawdown instructions must be original wet signature copies and sent via post or courier to: ‍ Lannock Strata Finance Unit 18.01, Level 18 227 Elizabeth Street Sydney NSW 2000

Question 28

Who is authorised to sign the loan contract for my Owners Corporation (ACT Government)?

Accepted Answer

The Owners Corporation is required to table a motion to authorise specific individuals to be signatories of the Concessional loan contract. This motion must be passed at general meeting. A copy of the required motion will be provided by your loan relationship manager in preparation for the meeting.

Question 29

Is my Owners Corporation required to pass a motion to accept the loan terms and enter into the loan contract (ACT Government)?

Accepted Answer

Yes, the Owners Corporation is required to table the concessional loan contract at a general meeting and pass a motion to resolve to borrow. This motion must pass at a general meeting. A copy of the required motion will be provided by your loan relationship manager in preparation for the meeting.

Question 30

When will the loan paperwork be sent to my Owners Corporation (ACT Government)?

Accepted Answer

Credit assessment instructions and a list of required documents will be provided to the Owners Corporation shortly after the loan information session. Upon sending Lannock all the requested documentation, the credit assessment process will be completed within seven business days. You will be notified by your loan relationship manager of the outcome. Following an approved assessment, the loan contract will be provided to the Owners Corporation to review and discuss. Your loan relationship manager will be on hand to answer any questions and to attend meetings.

Question 31

Can we repay the loan early(ACT Government)?

Accepted Answer

The ACT Government’s concessional loan is unsecured. Unlike a secured loan, there is no security held against the property to support the loan. Specifically, there are no mortgages, charges, liens or caveats. Therefore, nothing is registered on the title of the common property or any individual lot.

Question 32

How long does the loan process take (ACT Government)?

Accepted Answer

Please click the appropriate loan type below to view the simple step-by-step process to obtaining your Private Buildings Cladding Scheme concessional loan. Your loan relationship manager will ensure you have all the necessary information and documentation required to make decisions and to provide us with your instructions to process your loan requirements quickly. ‍ Preliminary loan process Preliminary to final loan process Final loan process Final loan – refinance process

Question 33

How much can we borrow (ACT Government)?

Accepted Answer

The ACT Government will confirm your eligibility to the Private Buildings Cladding Scheme. Approved participants will be issued with either a preliminary or final approval. The owners corporation will then undertake a credit assessment with Lannock Strata Finance to gain approval to borrow the approved funds. Within the preliminary concessional loan, you can borrow for the tender and design costs (up to $100,000 incl. GST), along with up to $10,000 incl. GST for administration costs to administer the loan and fees associated with regulatory approval. Preliminary concessional loan funds are available up to a 6 month period. Within the final approval concessional loan, you can borrow 110% of the cost of eligible works and up to $10,000 incl GST for administration costs. Please note that access to administration funds is capped at up to $10,000 incl. GST for each owners corporation for the duration of the Private Buildings Cladding scheme. Therefore, if you initially had a preliminary...

Question 34

What’s the security (ACT Government)?

Accepted Answer

The ACT Government’s concessional loan is unsecured. Unlike a secured loan, there is no security held against the property to support the loan. Specifically, there are no mortgages, charges, liens or caveats. Therefore, nothing is registered on the title of the common property or any individual lot.

Frequently Asked Questions - Strata Finance

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