A Strata Report is a detailed document that provides information about a strata-titled property, typically an apartment, unit, or townhouse, that is part of a strata scheme. The report is prepared by a specialist and is crucial for prospective buyers to understand the current and historical state of the property and its management. Here’s why purchasers should get one:
1. Financial Information
- Levies and Fees: The report details the current levies (fees) each lot owner must pay, including any upcoming increases. It also provides information on any outstanding levies, which could indicate financial issues within the strata.
- Financial Health: It gives insight into the financial stability of the strata scheme, including the balance of the sinking fund (used for major repairs and maintenance) and the administrative fund (for day-to-day expenses).
2. Building Maintenance and Repairs
- Past and Future Works: The report includes information about any past building works, maintenance, and repairs, as well as planned future works. This can help identify potential costly repairs that may arise soon after purchase.
- Defects: If there are known defects in the building, the report will highlight them, allowing buyers to assess the potential impact on property value and future expenses.
3. Legal Issues
- By-Laws: The report will list the by-laws governing the strata scheme, including any restrictions on renovations, pets, or usage of common areas. Understanding these rules is essential for assessing whether the property fits the buyer’s lifestyle.
- Disputes: It will disclose any ongoing legal disputes or conflicts within the strata scheme, such as disagreements between owners, the owners' corporation, or with contractors. This can be a red flag for potential issues.
4. Insurance
- The report provides details about the insurance policies held by the strata scheme, including the type and amount of coverage. This ensures that the building is adequately insured against risks like fire, storm damage, and public liability.
5. Management
- Strata Management: It gives an overview of the management company or strata committee responsible for running the scheme. A well-managed strata scheme usually means fewer headaches for owners.
- Meeting Minutes: The report typically includes minutes from recent owners' corporation meetings, giving insight into the decision-making process and any issues that have been raised by owners.
6. Overall Assessment
- Viability of Purchase: By reviewing the Strata Report, purchasers can make a more informed decision about whether the property is a sound investment, potentially avoiding future financial or legal problems.
In our view, purchasers should get a Strata Report to gain a comprehensive understanding of the property they are considering buying. It helps uncover any hidden issues that might not be apparent during a standard property inspection and provides peace of mind before committing to a purchase.
This guide has been prepared for information purposes only and should not be taken or relied upon as legal advice.