The Hidden Cost of Delay: Why Body Corporates Can’t Afford to Postpone Major Capital Works

When it comes to managing apartment buildings or townhouse complexes in New Zealand, body corporate committees often face a difficult dilemma: undertake critical remediation or upgrade works now, or wait and hope the problem doesn’t get worse.

 

Unfortunately, delay (or putting ones head in the sand) is rarely a cost-free option.

 

From compounding deterioration and skyrocketing construction costs to declining property values and legal exposure, the longer a body corporate defers major capital works, the higher the financial and social toll becomes for all owners.

The True Cost of Waiting

Body corporates often hesitate to proceed with major works due to the large levies involved or the expectation that funding must be raised upfront from owners. But inaction carries real consequences:

• Escalating Construction Costs – Delays often lead to 10–20%+ increases in total project costs per annum.
• Compounding Damage – Small issues quickly worsen, resulting in more expensive repairs.
• Declining Property Values – Unresolved defects reduce resale value and buyer confidence.
• Insurance Risk and Legal Exposure – Insurers may raise premiums or drop coverage.
• Owner Discord and Decision Gridlock – Delay often breeds conflict among owners and affects community harmony.

How Body Corporate Loans from MOD Finance Can Help

MOD Finance offers a bespoke funding structure designed specifically for New Zealand Body Corporates undertaking significant capital works. Rather than relying on upfront special levies — which can be unaffordable for many — MOD’s solution spreads the cost of projects over time and aligns payment with progress.

• No Upfront Levies – Body corporates can avoid large, one-off levies on owners.
• Fast Access to Funds – Quick access to capital reduces costly delays.
• Flexible and Body Corporate-Centric – The loan sits with the body corporate, not individual owners.
• Project Stability – Ensures builders stay on board and projects proceed smoothly.
• No Personal Guarantees or Individual Credit Checks – we look at the Body Corporate (financials arrears etc) and the valuation of the building as key parts to our decisioning process.

The ability just to get through to CCC in a remedial project is imperative for all unit owners.  Once the remedial works have completed and have been signed off, owners can realise full value for their units if they have to sell.  This is opposed to having to take drastic action such as selling before or during the remediation process, when the likely return is only a fraction of the units post-remediation value.

A Smarter Path Forward

In today’s regulatory, economic, and climate environment, doing nothing is the most expensive option. By putting off essential repairs or upgrades, body corporates risk higher future costs, reduced property values, and internal discord.

MOD Finance enables committees to take decisive action — now — without placing undue stress on unit owners - even if it is just to get everyone through to CCC. It’s a smarter, more equitable way to safeguard the long-term value of your building and community.

A MOD Finance Body Corporate loan structure helps you bring the benefit forward!

Ready to Learn More?

If your body corporate is grappling with how to fund major works, get in touch with MOD Finance. We’ll help you explore your options, understand the process, and move forward with confidence.