No Building Inspection Report for Strata Unit

Hi Guys,

I’ve viewed this property 3 times now.

Moderate interest from what I gather.

The unit is part of a block of 4 red double brick late 1960’s construction with concrete floors and balconies.

The strata is self-managed.

I’ve noticed some structural cracks in the Lower Ground lock-up internal/ partition wall - also brick.

I’ve also noticed rebar has been ground out from the soffit of the balcony above to address concrete spalling (it’s directly below the A/C condenser - I suspect this may have something to do with the spalling). Property is not coastal and I couldn’t detect any other obvious signs of concrete cancer.

I’m interested in purchasing the property and I’ve invested a bit of time plus a deposit to have the contract conditions negotiated.

Property is set to go to auction in a couple of weeks but the strata manager (one of the occupants) does not have any Building Inspection or Pest Inspections reports.

I know one of the options is obviously to commission an independent report and I know $1,000 in the scheme of what it’s valued at ($1mil+) is a small price to pay, however, are there any other alternatives that anybody has experienced or successfully deployed?

Appreciate any advice.

 

Generally you wouldn't have a building report done on a unit purchase because the property you're buying is all pretty much internal and anything else that is part of the structure falls under common property (this is broad brush, by laws can be different). However you would definitely pay for a strata report which you should have done by now - this will highlight the financials of the corporation and any and all building or maintenance issues they've had (minor and major) which will go a long way to helping you understand not only the building itself, but the political workings of the BC (which can definitely be a deterrent if it's dysfunctional).

Ask the agent if you can purchase a strata report or go to the strata manager directly. That's your next step if you haven't already. Ensure adequate insurance is in place on the building (paid by strata via lot own contributions) and make sure there is enough in the sinking funds to cover ongoing maintenance for the building with some fat for unforeseen expenses. It really works no different to owning torrens title in terms of financial management, it's just that you don't make all the decisions.

- Andrew

 

Normally what Andrew says above would apply but with a small block of 4 units that are self-managed, I can understand your concerns and potential lack of info.

If you can reach the strata manager or one of the other active owners, have a chat to them on whether they've investigated the spalling issue. It looks like some investigation may have been done so see if they can send you a copy of the report and/or any quotes. Have a chat to the company that did the report for an estimate of rectification measures if possible.

Short of doing a building inspection, you could go to a concrete or strata remediation specialist to see if the will conduct an inspection for a lesser cost to shed some light.

 

Normally I’d go off the strata records - I think I’ve only once got a building inspection because of a red flag in the strata minutes.

The fact it’s self managed would just add the concern that the strata records may not be as complete and accurate as you’d like. (Eg, “Let’s not minute that, it could be negative for any potential purchasers and our homes values”). If it was me, and you’ve seen some problems, I’d get a building report.

Its only a block of 4, so anything major you’ll be up for ~25% as an owner.

Thats not to say don’t buy if there’s an issue, if you understand the issue and the likely cost and can balance that against purchase price, just go in with eyes wide open.

 

I wouldn't worry about that so much..... The real issue is one people don't think about. I own an apartment in an old block like this. Strata went from 700 a quarter when I bought it to over 1000 a quarter now. As blocks get older they cost a bomb to maintain. So those things are things that crop up in the future so be careful. And if land tax comes in .....fun times.

 

Thanks everybody. Really appreciate the feedback!

I own a unit 20 seconds away and the Strata Report was comprehensive enough for me to make an informed decision based on the management of the property and any existing building maintenance issues.

My concern, as others above have highlighted, is that the Strata is self-managed, less than comprehensive and if there are any structural issues etc. we’ll be up for 25% of the costs.

I’ve ordered and paid for the inspection. For peace of mind and to be able to bid with confidence or not, I think $500 now could potentially save us from chipping in $50k-$100k for underpinning, repointing and concrete cancer repairs in the near future.

 

Let us know what comes out of the report - make sure they send someone with good structural knowledge as its not your typical single dwelling building report.

 

I will do Mel.