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Some things you need to know about Strata and our Reports

Strata Schemes – Owners Corporation

When buying into a Strata Scheme you become part of the Owners Corporation, once you are an owner if something significant occurs within the building that is the responsibility of the Owners Corporation, you will be required to contribute your share of any amounts raised by way of a special levy or additional levy; even if it does not directly affect you. We review the records made available to us in order to determine what major expenses may be proposed however, not all issues are forecasted and we cannot predict what the future may hold. We provide as much history as possible in order to determine if there are any ongoing issues or repairs.

Meetings and expenditure

Things to look at from our reports is the history of the complex most major matters are discussed at general meetings and expenses are identified in the Income and expenditure reports presented at each annual general meeting. Should there be anything significant we will note these matters. We suggest that you review the current cash at bank and if there is insufficient money in the capital works fund or/and administrative fund a Special Levy or additional levy may need to be raised and if this levy has not been raised prior to you purchasing, you will be responsible for your share of any levies.

Capital Works Fund reports (formerly known as Sinking Fund Forecast reports)

Where a Capital works Fund forecast report has been obtained, we include a copy for you to review. We highly recommend that you review this and compare the contents to the current capital works fund balance and also the history of expenses; these reports are usually prepared independently by experts and were introduce to ensure that complexes were raising sufficient funds for capital works over a 10 year period.

Fire Safety Compliance

Southside Strata Inspection’s reports includes the current fire regulations and it  is imperative when buying into a Strata Scheme that it complies with the relevant fire regulations. If the building is older and does not comply with the current regulations as an Owner you need to know this, because should council impose an order to upgrade the current services at the complex, the Owners Corporation must comply with the order and this can cost a significant amount.

General Information

When getting a pre purchase strata report it is important that you get at least 5 years history, you need to ensure that you find out the current levies, are there any proposed special or additional levies, when the levies are paid to and when they are due; any history of major structural issues or building defects and any proposed expenses or evidence of current issues.

Insurance

You also need to know if the Strata scheme is adequately insured, we provide the most recent Valuation for the property and it is important to compare the valuation amount to the sum insured amount to ensure that there is adequate insurance. Valuations are required to be updated at least every five years.

Due Diligence

A confident smart buyer will do due diligence research to help them decide if the opportunity is really right for them; A strata report is an important part of the due diligence research when buying a strata property.
Key areas to peruse is the financial position of the property, if there are any building defect or major structural works, any disputes between owners/occupiers, any regulations or special requirements in relation to moving in and out of the property, undertaking renovations, approval for pets etc.  Also, if there are any current or past legal issues and any orders imposed by local council or other authorising agency.

Window Compliance

There are changing being made in relation to Windows safety within strata complexes.

From 2013, amendments to the National Building Code assist to prevent children falling from bedroom windows in newly constructed buildings. These requirements are also applicable to where windows are replaced in existing buildings. New window safety laws to help prevent children falling from residential strata buildings were passed through Parliament and will come into force on 13 March 2018.

Residents will still be able to open their windows as presently, but the lock will be available to be engaged when children are present.

Due to this risk and to prevent injuries and deaths, the new requirements are applicable where:
* The building has lots used for residential purposes and the window can be accessed from a residence
* The floor is located more than 2 metres above ground level, and
* The window is located below 1.7 metres from the floor inside the dwelling
For all applicable windows; a locking device must be fitted to ensure the window opening is greater than 12.5cms or window bars are fitted to ensure the maximum gap is less than 12.5 cms or a barrier or mesh is fitted over the danger area.

We have observed in some inspections that a large number of Strata Managers are adding to Annual General Meeting agendas a motion in relation to obtaining a report on the windows. Where this is discovered we endeavour to obtain a copy of the report and any subsequent quotes or action that may have been undertaken.

Balcony Compliance

Something to be mindful of is the height of the balcony railings at the complex. In older blocks the balconies may be too low and not comply with the current building codes; there is no requirement to undertake upgrade works unless an order is imposed by council. However, we have noticed in some of our inspections that some complexes are taking a proactive approach in relation to this issue and either engaging a professional to provide a report on the balcony railings or by going ahead and obtaining quotes for the replacement of the balcony balustrades.

Quarterly Levy Payments

We take note of the quarterly schedule for the levy payments for the unit being purchased. Each year at the Annual General Meeting a new budget to determined and the levies are set. Although a levy notice may be sent by the managing agents; we advise our clients when they purchase their new property that they make a note of when the levies are due to avoid paying  interest and/or legal costs