Brief Summary of Some Issues to Consider When Buying a “Pre-Loved” Strata Property
01 January 2012
- Strata records Inspection – it is imperative to obtain an inspection of the strata records in order to find out the current state of affairs of the Owners Corporation. In particular, the report should reveal details of:
- current balances in the administrative fund and sinking fund;
- current levies;
- any proposed special levies;
- any current litigation affecting the strata scheme;
- any issues with the state of repair of the building;
- any proposal to undertake repairs and maintenance;
- the state of harmony (or disharmony!) in the complex;
- minutes of General Meetings.
- Building Inspection – whilst it will generally be cost prohibitive to undertake an inspection of the entire complex you should consider arranging an inspection of the unit you propose to purchase to find out whether there are any specific building issues.
- Review the by-laws – it is important to carefully review the by-laws and make sure there are no restrictions which are unacceptable to you and that there are sufficient by-laws to properly control the use of common areas by all owners.
- Management / Caretaker Agreements – has the Owners Corporation entered into any such agreements? What is the term of the agreements and how much is it going to cost the Owners Corporation?
- Unit Location – carefully consider the location of the unit in the complex. In particular:
- what side of the building is the unit located? Will it benefit from good solar access and ventilation?
- Are there any common walls? Will this create noise issues?
- Accessibility to lifts and car parking spaces.
- Size of car space – 14 sq. metres is “the guide”.
- Building Location – consider the location of the building and accessibility to local services such as transport, schools, medical services etc.
- Common Areas – are the common areas and building well maintained? This will give you an indication of the manner in which the Owners Corporation is looking after the building and how well the complex is being managed.
- Contract review – it goes without saying that you should obtain professional advice on the terms and conditions of the Contract including title details, covenant and easement and zoning issues.
These are just a few of the issues to consider when buying a strata title property and of course you should obtain specific legal advice before signing any contract.