Strata Documents Assessment and Report

What is a Strata Inspection Report?

This Strata Inspection Report is similar to a building report when someone buys a house, but it is of the strata documents only.

The records of the Owners Corporation must comply with the Strata Schemes Management Act. By no means do we suggest that this replaces a building inspection report. The big difference is a Strata Inspection Report will report on the building, also known as the Strata Scheme. It should provide precise details of what is happening within the building or complex.

Should you choose The Property Inspectors to produce a report, our report will include:

  • Who is the current owner?
  • What are the quarterly levies for the property?
  • What are your voting rights?
  • What is your unit entitlement?
  • When are the levies paid to?
  • Have there been or are there any current or proposed Special Levies (additional contributions outside your quarterly levies that may be raised for building defects or major works)?
  • Does the Strata Scheme comply with Fire Requirements, Work Health & Safety Obligations and Asbestos Management?
  • Is there any information in the records approving animals? Are animals permitted?
  • How much is in the sinking fund and Administrative Fund?
  • Are any of the funds in deficit?
  • Are there any current legal matters? Have there been any legal matters in the past 3 years?
  • Building Defects or Home Owner Warranty Claims for Defects;
  • Breaches of By-Laws (Rules and Regulations for this building);
  • Is there any disharmony?
  • Major Income and Expenditure over the past 3 years;
  • Proposed Major Expenditure;
  • What is the current value of the building?
  • Is the building insured and if so adequately insured? (details of the insurance and cover);
  • Are there any compliance related matters within the records such as window and balcony compliance?
  • Is there a Sinking Fund Forecast? (a report prepared detailing what the levy contributions should be over the next 10-15 years including detailed maintenance);
  • Are there any known disputes within the Strata Scheme;
  • Copies of Annual General Meeting Minutes, Extraordinary General Meeting Minutes and Executive Committee Meeting Minutes;
  • Copies of building reports, extracts from compliance reports.

Please note, if a document is not made available at the time of our strata inspection, we cannot report on it, nor comment, our reports are solely on the documents at hand at the time of our appointment within the strata company that manages the strata plan that we have been commissioned to report on.

The Property Inspectors employs full time, specialized, strata inspectors who have worked for strata companies, managing strata complexes and have brought their knowledge and experience to our organisation.

A Strata Report WILL Save You Money

Buying a unit, townhouse or apartment can be an affordable way to enter the property market. But before you sign the dotted line it pays to look into the history of the property and its strata scheme.

Commissioning a strata report before you buy can tell you almost everything you need to know about a property and its people before you’re tied to it financially.

A strata report will ensure you don’t get less than what you expect – or bite off more than you can chew.

Do your homework

If you intend to live in your unit or rent it out to tenants, you need to know what the place is like to live in, how it’s being managed and whether or not your neighbours get along. If a property is unpleasant for an owner it’s likely an investor will have problems retaining tenants.

You’ll also want to know where the property is today and where it might be in the future.

The last thing you want is for the complex to be sold out from under you, or to foot a major damage bill for leaky pipes.

Here’s how to get started.

Check the books before you buy

The purpose of the strata search is to review the accounts and records of the property that you’re looking to purchase.

Just like you shouldn’t judge a book by its cover, there may be issues with your building that aren’t apparent at first glance.

Don’t judge a building by its facade.

At best, a strata report can reassure you that the scheme you’re buying into is a nice place to live with well maintained amenities.

At worst, it may uncover fiscal mismanagement, disputes between owners, high levies or unresolved legal issues.

A badly managed strata scheme can affect the re-sale value of your property, blow out your budget and your net rental return.

Excessive strata management costs also have the potential to affect your ability to service your mortgage

Pro tip: Don’t be tricked by slick promotional presentations – these can be orchestrated to avoid showing prospective buyers any less desirable aspects of the property.

Be suspicious of a committee that is reluctant to submit all its records for inspection.

 Ask yourself before you buy

  • Can you afford the quarterly levies?
  • Will your budget allow for any planned special levies?
  • Are you comfortable with the proportion of owner-occupiers to short-term residents?
  • What will you do if the owners corporation doesn’t allow pets?
  • Do you think any unit renovations or alterations you’re planning will be approved?
  • Are the bylaws reasonable or overly restrictive?

Pro tip: Older blocks, even with sometimes expensive maintenance costs, tend to offer strata fees much cheaper than newer blocks.

Older unit owners may pay in the realm of $300 – $800 in strata quarterly, whereas newer blocks are typically $1000 – $1500 per quarter, depending on amenities.

Focus on the upside

When owners and strata management work together to improve, maintain and enhance the strata complex and their homes, it results in a peaceful community – a nice place to live rather than one to avoid.

With the strata report at hand you’ll be able to make an informed decision about the building you’re looking to invest in.

The information within this article is provided for your general interest and should not be relied upon as a substitute for legal or financial advice.

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