A lot of our clients come to us all ready to buy a unit or townhouse in a strata complex but they haven’t yet engaged a strata inspection company to prepare a report on the owners corporation. This is a critical step for any would be unit owners as it gives them a window into the world of the strata plan.
As lawyers and conveyancers, we can only advise on the contract for sale. In respect of strata title properties, this includes matters such as the lot entitlement (which is used to work out the levies to be paid and voting rights), the size of the property, terms of the contract and the applicable by-laws. We cannot let you know whether there is any money in the sinking fund, if special levies are likely to be raised or whether the strata plan has the correct insurances in place. Matters such as these are reviewed by strata inspectors and then distilled into a strata inspection report. Other issues likely to be addressed in a strata inspection report include a summary of the minutes from AGMs and extraordinary meetings, fire compliance; the amount of money in the sinking fund and administrative fund, levies and whether the owners corporation are involved in or were involved in litigation.
We recently wrote about the changes to be introduced from 1 July (see here) under which real estate agents will need to disclose whether a report has been prepared on the property at the time the contract for sale is handed out. Under this new scheme there are likely to be significant savings for purchasers. Let’s face it, probably better to save on your conveyancing costs and spend it on that new couch!
A strata inspection report is an essential piece of the due diligence pie and whilst it may be tempting to make a saving on your purchase to reduce the overall conveyancing fees, it is likely to only cause grief further down the track. As a lot owner in an owners corporation, it is essential that when buying into strata title property you are informed about all aspects of the owners corporation. The best way to get that information is by engaging a strata inspector to carry out a strata inspection report!
Are you keen to buy into a strata complex and don’t know where to start? Call our property team today and we will send you our top 5 things to know when buying a strata title property.