In the Greater Brisbane and Gold Coast areas, an increasing number of people are buying into strata titles.
However, Strata Community Australia (QLD) president Simon Barnard has expressed concern about the growing number of purchasers choosing to forgo important background checks.
The declining number of important pre-purchase searches may be due to a number of factors, he suggests, including people rushing through purchases, receiving poor advice, and being reluctant to fork out the extra cash.
But the cost of thorough background checks can prevent significant heartache and financial burdens down the track.
Here is a list of important topics to review when looking at strata units.
1. Review the Financials
The financial status of the body corporate is very important for potential buyers. Check to see if the body corporate has sufficient funds in their administration and sinking funds. Verify if lot contributions are paid regularly or if there are a large number of levy arrears. If any major works are planned, make sure there is sufficient funding so that you won’t be asked to make a substantial special levy contribution as soon as you move in.
2. Get a feel for the community
The community may present itself as harmonious and well-functioning to potential buyers. However, on-going disputes which may affect your enjoyment of the scheme may be lying under the surface.
An easy way to identify this is to read the committee meeting and AGM minutes. Minutes will highlight any areas of concern, and also reveal if repairs are auctioned quickly, if members cooperate, and if there are ongoing disputes between owners.
3. Check details which will affect you
Your real estate agent may assure you that there will be no problem bringing Fido or Felix into your new apartment, but check the by-laws yourself. Pets may be allowed, but there might be restrictions on the type and size of pet. If you don’t check, you could find yourself in a difficult situation with having to re-home Fido or Felix.
Another common concern in strata living is parking. Make sure you check how the car parking works in the scheme, for example, if there is a specific park allocated to each unit.
4. Check for Building Defects
As with the purchase of any building, ensure you have building inspections which are performed by an expert. Reviewing the financials will inform you if the body corporate has defects they are aware of and have planned to rectify, but there might be defects in your lot which you want to be aware of before you finalise purchase.
As a prospective buyer of a unit, you or your agent (for example your solicitor or search agent), have a right under the Body Corporate and Community Management Act to access body corporate records.
There are a number of places or people you can use to find this information:
With any significant purchase, it is important to be well informed. Doing the research now can save you possible shock and distress when you receive higher-than-expected levies, or are not allowed to bring your dog. The information you find may not mean you do not purchase the unit, instead, it will allow you to make an informed offer based on all the factors.
Buyer’s Final Checklist