How to interpret a Strata Report

Hi all,

Im in the process of purchasing my first property and was wondering how do you interperet a strata report.

Ive read through a few reports before but they all mainly appear factual and dont really give any clear answer to whether the property is ok to purchase or if you should start running.

What are the main things you should look for and what are the red flags? or is it all subjective?

 

Low strata funds, go over any mentions of issues reported in meeting minutes, particularly things like waterproofing issues and structural defects, concrete cancer, any discussion of special levies, those would be some of the big ones.

 

Meeting minutes will also give a clue as to whether the owners corp is functional or dysfunctional.

Issues that appear over and over again with no resolution suggest dysfunction. Minutes also show who has attended meetings - a good turnout suggests owners are interested in their homes and investments.

Agree with @Hetty on discussion of special levies as a warning - but interpret with care, I have seen special levies put on the agenda for no other reason than an attempt to get owners to attend the meeting.

 

I would also look at who is managing the complex and how proactive they are...

What the static costs are such as general maintenance of the complex.. i.e. cleaning/gardening/management fees

 

How old and what size of block are the buildings you are looking at?

 

Strata reports are so long..... I don't want to be a lawyer with books up to my head...

 

I do strata maintenance, and am also an owner in serveral complexes.....

Often the largest cost is the strata management, particularly if there is a building manager (strata manager just defers all issues to the building manager, ergo doubling the costs!!!)
Sure this is more applicable and suitable to 100+ lot blocks.
But plenty of much smaller complexes have a building manager costing many thousands (to do most of the job a strata manager was/is employed to do).

The cleaning/gardening costs are tiny by comparison !

One complex recently had a quote to replce a broken entry tile at $800+, as there was a tiler on site who would do it for a carton of beer ($45) to replace (supplied tile and grout) yet got voted off the committee at the AGM because I made the decision between the two without committee approval !!!!WTF !!!!
Am selling out of that complex due to a bunch of selfish owners who think the internal garage fire exit doors need to be "immaculate" over that one foyer entry tile !!!!!!

 

Your solicitor will usually engage someone to review the strata minutes and report any anomalies.