Sam Saad

So ultimately, the purpose of a strata report is to provide you with a full understanding of the situation you're walking into.

By reporting on details such as current and past finances, insurance issues, building defects, as a buyer, you'll be much more informed and have a clearer picture of what you're going into before you buy a property.

The strata reports cover quite a bit of comprehensive information, a lot more than what a contract can tell you in relation to a building.

Strata reports cover things such as strata role information, the bylaws, if there's any evidence of disharmony in the strata scheme, if there's any legal proceedings in the building that are going on between any parties and the owner's corporation, the financial records, whether the sinking funds and the admin funds, which are the funds that basically support the building if they're healthy or unhealthy.

what the current levy amounts are, details of the committee, if there's any defect works or council orders against the building.

So they're quite comprehensive in what they cover and they're super important.

One of the biggest things that people find out in these strata reports is whether there's any special levies.

So as people may know, when you buy a strata complex,

or unit, you're going to be paying strata levies on a quarterly basis.

And usually they're quite a high amount.

The last thing that you want is to have a special levy, which is a significant portion of what you're going to be paying or double or triple sometimes to cover shortfall of funds that are not available in the building.

This is a question I get asked all the time.

These documents are both as important as each other, but they both serve different purposes.

Whilst the contract governs the relationship you have with the buyer or seller when purchasing a property, the strata report tells you the background about the property and the history of the building.

Often, if a strata report has disclosures about a bad fund management or significant long-term issues within the building, they're likely going to be significant additional expenses for you as the buyer as additional levies may be raised by a strata scheme.

If a client came to me without a strata report and only a contract, I would strongly advise them against buying a property because you're more likely to get caught out with the things that are disclosed in the strata report than matters that are contained in the contract.

Contract, the more disclosure matters and how the transaction is going to happen.

A strata report is going to be more about the property itself and what's going on in the background.

Yeah, I've seen a number of clients burnt in this space before where they haven't chosen to do strata reports because the property market's been so hot and everything that they need to get done didn't get done in time and they just wanted to be getting the property and just get into the market.

And the emotions took over and they didn't think about these situations.