Strata Inspection Reports are fast gaining popularity amongst apartment investors in Victoria, for their ability to unearth issues that don’t show up from a physical inspection, saving thousands in the long run.
A strata inspection report (also known as a Strata Search, Owners Corporation Records Inspection or Section 146 (VIC)) is a report that all purchasers of an owners corporation whether it is residential, commercial, industrial or part of a multi owners corporation (unlimited) community, should invest in.
Strata Inspections Reports are relied on heavily in states like NSW, with investors wanting to know if the current owners corporation and building are well-run, well-maintained, adequately financed, and planned well into the future – however in Victoria it’s the most savvy buyers utilising them – arming themselves with the knowledge of when to bid and when to potentially walk away.
Talk to anyone about buying a property and they’ll no doubt ask if you’ve done your research? Looked at past sales, visited the neighbourhood at different times, checked for upcoming local developments and of course – ordered a Building and Pest Inspection.
Building and Pest Inspections give buyers confidence in understanding what physically lies beneath the property they have fallen in love with. Rising damp? Termite activity? Old pipes? Pitfalls not visible to the naked eye can end up costing you tens of thousands, and that’s why buyers rely on a Building and Pest Reports to give them the green light, or arm them with the facts, to negotiate a better deal.
When it comes to buying an apartment, a Strata Inspection Report can also arm you with the “pitfalls not visible to the naked eye” – but instead of structural or cosmetic risks, it is involved with the ability of the Owners Corporation to service its members (a purchaser is a member as soon as settlement takes place).
The strata report should look at issues including:
• What the fees/levies are, including the quarterly amount and any special fees/levies that you may have to pay over and above
• Whether there is a current valuation and adequate insurance for the strata scheme
• Whether there are any major works planned or currently underway which may increase your costs
• If there are any recorded/reported structural, defect or building problems which could mean more work will be required in the future
• Whether there have been are major or any ongoing water or mould issues at the property that could affect your health
• Whether or not there are adequate funds available in reserve to cover potential issues or work that may need to be done in future
• If there is any history of disputes between owners or between the owners corporation and residents
• What the special rules are regarding renovations, communal areas, pet ownership and any other circumstances that might be applicable
Strata inspections are conducted by careful examination of the written books, records and accounts to ensure that everything is in order. A strata inspection can give buyers the information they need to make an informed decision as to whether or not to go ahead with a purchase.
If you are looking at purchasing a property within an Owners Corporation, contact us today and we can prepare a Strata Inspection Report promptly and help you understand the findings.