Sunday, February 24, 2013

Strata Searches

As with any major investment decision in life, it is crucial to do your research. Before purchasing a house, buyers may be aware of organising a building inspection and pest inspection. These are to ensure the integrity of the proposed purchase and identify any current or potential shortcomings or liabilities that may soon be present.

In Strata Titled properties, one of the tasks in completing proper research and due diligence would require you to arrange an inspection of the records and accounts of the Owners Corporation by a suitably qualified strata searcher. This is called a Strata Search and is covered under Section 108 of the NSW Strata Schemes Management Act 1996.

The Strata Search report should include:
The financial status of the scheme
Pending building works
Special levies
Past works history
All expenses for the past two years
10-year budget analysis
General information on:
Any disputes
Any other areas under investigation

What are the current balances in the Administrative and Sinking Fund account?
Are there any current or proposed litigation matters involving the Owners Corporation?
Are there any limitations or restrictions on the use of common property which may affect me?
Are there any outstanding public liability claims involving the Owners Corporation?
Are animals permitted? and if so, are there any restrictions or conditions?
Have any alterations to the unit been approved by the Owners Corporation?

These can be arranged by you or your conveyancer and are really a must do item for purchases of such value. A physical inspection of the property when you are shopping around will give you a good indication of some things, but without a proper executed Strata Search you would be purchasing without all the facts at hand.

Furthermore, when purchasing property and you can see a lot of work required to be done to the building and common property, you are able to negotiate a lot more aggressively on the eventual sale price. It leaves the buyer in a position of strength and enables a cheaper purchase price, or at least safety in the knowledge that the purchase made is at a fair price.

After you have gained entry into a building you then have the ability to elect yourself on the committee and have a voice in the day to day and also strategic management of the building. This can only improve your awareness and increase the value over time.

About Elevate Property Group

The team at Elevate focus on ethics, excellent customer service and ultimately, better relationships with clients - whether they be vendors, buyers, landlords, tenants or a myriad of other people involved in a property transaction.

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