26 OCT 2015
A strata report covers important information you need when living in a strata property. Here are some of the things you should look out for as they can be crucial to your investment decision.
The report will summarise the financial position of the body corporate you are buying into. You should look for signs of good financial management and planning, for example that the sinking fund balance is aligned with the 10-year sinking fund forecast and the building is prepared for unplanned or planned capital works.
You also want to look for indicators of stability and good general management, such as meetings being held regularly and tax returns being consistently lodged. An organised and well-managed body corporate is a big plus in strata living.
The report can also throw up some red flags to do with the property, such as outstanding levies for your prospective lot that have to be paid. These sorts of issues will be covered in the financial information section of the report, along with the general financial health of the building.
The report will also provide details of any fees and special levies that you would be liable to pay going forward. The last thing you want is to make an investment in a property only to be told there is a proposed $20k special levy that you are legally required to pay which you weren't aware of!
You should also look at the By-laws section of the report – it will let you know if there are any By-laws that affect your prospective property. Rules about pets, smoking, or renovations can be a nasty shock if you didn't know about them beforehand. We do not need more puppies at the puppy shelter because buyers were told a unit is "pet friendly" only to find the opposite when they move in and have to leave poor old Boris behind.
The report also details some other potential problems; such as evidence of dis-harmony in the building. You have to live next door to these people, so lots of complaints or conflict is something we're sure you can live without.
For an example of a strata report click here
. When you purchase a BYB strata report you will also have direct access to the report writer who can talk you through anything you don't understand in the report.