In the event that you are still waiting on your strata paperwork to arrive, there is a risk of not being able to adequately review it.
No matter what, there are aspects of the report that are imperative. At BCI WA, we advise you to look at the following five key areas of your strata inspection report. Be sure to pay special attention to the following aspects and be sure to ask relevant questions before making any commitments.
1) Financial records
Each week strata levies are paid to the Owners Corporation. It is important that this money covers ongoing maintenance and larger one-off costs should they come up, such as replacing a broken window or painting common walls in shared areas. The way you can check if these funds might be misused by the Managing Committee members is checking all special and quarterly levies, which tell us how much of our hard-earned cash goes towards running each building (i.e., water bills for utilities). You will also want to investigate the income from rental units versus administrative fees charged on homeowners who don’t rent out their property; plus, balances available in various different accounts like Administrative Fund/ Capital Works Fund – it’s worth taking an hour.
The Capital Works Fund covers larger scale projects and maintenance and the forecast for this is usually done by a professional such as a quantity surveyor. The forecast is a good indicator of whether the owners are collecting enough to cover future planned works.
When you move into a new building, it’s important to know how the different residents get along. Keep an eye for disputes like these and make sure not too many of them are unresolved before moving in!
3) Building defects
When purchasing a property, it’s important to find out about the building’s history. If you’re buying into a new high-rise or low-rise home that has been on the market for some time, research builders and developers before making an offer. Check their websites; if they are licensed with no disciplinary actions against them on your state government website then there should be nothing standing between you and your dream house!
When looking at potential places to live remember – check builder credentials from the project through completion and consider any defects found during construction as part of this vetting process too.
4) Compliance with legislation
Does the Owners Corporate comply with fire safety & WHS requirements, strata insurance and asbestos management? If they’re not properly meeting their legal obligations, this is a red flag and you should bring this up promptly before commitments are made.
5) Poor strata management
Especially for a building that has been around for several years, it’s important to know whether the strata manager will be able to handle any issues or concerns when they come up. After reading meeting minutes and correspondence from previous meetings – did you see how open and receptive this person is? They’re willing to listen closely with an objective eye in order to figure out what needs fixing.
If you find there are gaps in your strata report, don’t be afraid to follow up and ask for more information. You are fully entitled to get the full picture before you make any commitments. Speak to our team today, we are here to guide you where possible.