A showdown with strata shonks is coming for this columnist

What’s the problem?

Take embedded networks, which is where a service provider installs infrastructure, sometimes for free or at a discount to the developer, on condition that they get to maintain it at a pre-agreed, often inflated rate for an extended period.

Now, some consumer protection legislation exists, but it is far from water-tight.

Owners may find they are restricted, at least temporarily, in their choice of energy or internet providers, for instance.

The majority of owners, especially first-timers and downsizers will assume that there can’t be anything too untoward in the contracts; the law wouldn’t allow it. Dream on.

I’m looking at the 120-page agenda booklet for our new place that includes a contract for storm-water filtration. It was precisely this kind of embedded network that was used as an example by a strata manager friend when he alerted me to this widespread and dubious practice.

This is how it works: developers save money on infrastructure by shifting the costs to inflated maintenance contracts that are paid for by the eventual apartment owners.

In this particular case, the filtration system will not be owned by the building but instead will be leased for a period of 15 years at a cost of $750-plus a month, including maintenance, with a total declared cost of almost $140,000 over the term of the deal.

A 15-year contract? Wow! But wait, there’s more.

Tucked deep inside the terms and conditions is an agreement that the payments “may” be increased every year by at least the consumer price index or at most 10 per cent, whichever is the greater.

Assuming the company takes advantage of its guaranteed and approved annual 10 per cent rise – and why wouldn’t they? – the total cost of the storm water filtration more than doubles to almost $300,000.

And here’s the sickening part. If the developer had installed the filtration system at its own expense, as it should have, I’m reliably informed apartment owners can pick up a maintenance contract for $1500 a year, rather than more than $9000 and rising.

It looks like it’s going to take one troublemaker to stand up at the initial AGM of this shiny, new building and rain on everyone’s parade by telling them they are being ripped off.

And they should perhaps check all the other contracts on the table, which are being offered as take-it or leave-it options.

Once they say aye, and that company seal goes on, it is impossible to remove.

I guess that troublemaker will be me. I should sell tickets.