What to Look for in a Strata Report?

If you’re buying an apartment in NSW, reviewing the contract is only part of the due diligence. It’s also important to understand the strata scheme you’re buying into. 

A strata report gives you a look at a scheme’s finances, upcoming works, disputes, defects and how the owners’ corporation is being managed. If you are still deciding whether to order one, our article on why you need a strata report when buying property in NSW explains the main reasons.

So, what should you be looking for?

Standard Levies

Start with the current strata levies and the balances of the administrative and capital works funds.

Low levies might sound appealing, but they aren’t always a good sign. If a building hasn’t been putting enough money aside for future maintenance, owners can end up facing increased levies or a special levy when major work is required.

It’s also worth checking the capital works fund plan, particularly for older buildings. This can give you an idea of what major expenditure is expected over the coming years and whether the owners’ corporation is putting enough money aside to cover it. For more on how levies are set and what they pay for, read our article on what strata fees can tell you about a property in NSW before you buy.

Special Levies

Check whether any special levies are currently payable and whether any are being discussed.

Sometimes the more useful information is found in recent meeting minutes. If owners have been discussing a major roof replacement, waterproofing project or lift upgrade, for example, there may be a significant expense coming even if a special levy hasn’t formally been raised yet.

Building Defects

Meeting minutes can also tell you a lot about the condition of the building.

Keep an eye out for recurring references to things like water ingress, waterproofing, concrete deterioration, fire safety issues, structural concerns or major repairs.

For newer developments, you may also find records of building defects and negotiations or proceedings involving the developer.

Not every defect is necessarily a reason not to buy. The important thing is understanding what the problem is, what is being done about it and how much it may ultimately cost.

Disputes 

Disagreements between owners within the building aren't unusual. Years of ongoing disputes, tribunal proceedings or arguments over major works are another matter.

The strata records can give you a useful sense of how the building is being run and whether there are any longstanding issues you should know about before buying.

By-laws

The strata scheme’s by-laws set the rules for the building and can cover everything from pets and parking to renovations and the use of common property.

If there is something particularly important to you, check it before you buy rather than assuming it will be allowed.

Is a strata report worth getting?

Almost always, yes. You’re not just buying the apartment itself. You’re becoming responsible for a share of the building and its future expenses. Spending some time understanding the strata scheme before you commit can save you from some unpleasant surprises later.

If anything unusual comes up in the report, speak with our team so you can understand what it means for your purchase.

Frequently Asked Questions About Strate Reports

Are low strata levies a good sign when buying an apartment?

Not always. Low levies can mean a building has not been putting enough money aside for future maintenance, and owners in that position can end up facing increased levies or a special levy when major work is required. Checking the capital works fund plan, particularly for older buildings, gives you an idea of what major expenditure is expected over the coming years and whether the owners’ corporation is saving enough to cover it.

How can meeting minutes show that a special levy may be coming?

Recent meeting minutes can reveal works the owners have been discussing, such as a major roof replacement, waterproofing project or lift upgrade. If works like these are being discussed, there may be a significant expense coming, even if a special levy has not formally been raised yet. Alongside the minutes, check whether any special levies are currently payable.

How can a strata report show building defects?

A strata report gives you a look at defects that have been recorded for the building, and the meeting minutes can tell you a lot about its condition. Look for recurring references to water ingress, waterproofing, concrete deterioration, fire safety issues, structural concerns or major repairs. 

For newer developments, you may also find records of building defects and of negotiations or proceedings involving the developer. A defect is not necessarily a reason not to buy, but it is important to understand what the problem is, what is being done about it and how much it may ultimately cost.

How can I tell if a strata building has ongoing disputes?

The strata records can give you a useful sense of how the building is being run and whether there are any longstanding issues you should know about before buying. Disagreements between owners are not unusual, so look for signs of something more serious, such as years of ongoing disputes, tribunal proceedings or arguments over major works.

What rules can strata by-laws cover?

Strata by-laws set the rules for the building and can cover everything from pets and parking to renovations and the use of common property. If something is particularly important to you, check the by-laws before you buy rather than assuming it will be allowed.