Buying a unit in a strata building is different to purchasing a freestanding home or investment property. As well as checking the condition of the unit you are intending to purchase, it is important that you make sure the rest of the building is in good order before you commit, or you could end up with unexpected bills or legal headaches. Strata inspection reports are intended to give prospective owners an overview of the state of not only the individual unit, but also the entire strata building, so they can make an informed purchase.
What could happen if I don’t get a strata inspection report?
If you are planning to buy a strata property, it is highly recommended that you get a strata inspection report first. If you don’t, you could run the risk of making a bad decision and ending up with a property that is not in a good state of repair, has underlying problems, or unexpectedly high strata fees in order to pay for work needed on the building. A strata inspection report will check the physical condition of the unit and the building along with the financial records of the body corporate to ensure that everything is in order.
Strata properties often have common areas and there can be confusion as to who is responsible for maintaining these areas, and what changes residents and tenants are allowed to make. A strata report will make it clear what is going to be your responsibility and what will be the job of the body corporate to maintain and repair where necessary, meaning that you can avoid any confusion or misunderstandings.
What is included in a strata inspection report?
A strata inspection report usually includes the following:
- The condition of the interior and exterior of the building including any issues that need addressing.
- The amount of money that the strata body has in the bank.
- Any available financial statements.
- The strata budget.
- Sinking fund balance.
- Sinking fund forecast.
- History of repairs made to the building.
- Rules and regulations concerning pets and any other issues that could cause disputes.
- Planned upgrades or repairs.
- Fire safety compliance and upgrades.
- Insurance details.
- Any legal issues, past or pending.
It is important that you review your strata inspection report thoroughly and make sure you completely understand the implications of any issues that have been raised in it.
If the inspection report identifies any problems it may not necessarily mean that you will have to forego your purchase, but it will at least allow you to make an informed decision and negotiate on price where appropriate.
It is important to note that strata inspection reports don’t cover everything. It is still important to obtain a pre-purchase building inspection report on the individual unit you are planning to purchase as well as a separate pest inspection report if you feel that pests might be an issue.
Buying a property is a big financial commitment, so it is important to make sure you get it right. By doing all the legal research for your property, and making sure you are well informed, you can decrease your chances of facing financial issues in the future or making a purchase that you will regret.