[scotlandx]

If you are concerned about the prospect of additional costs associated with the unit you should assess the situation based on your circumstances and perhaps get someone in to look at the building and offer their opinion.  One thing you can consider if you are very keen is to reduce your offer to take into account the prospect of expensive rectification works in the future.  For example, say the builder was not liable and works were to cost $2 million, this averages out at about $20K per unit, although this will vary depending on unit entitlement.  In the general scheme of things that is not a very large amount of money.  By way of comparison I live in a strata where we estimate we need to undertake works that will likely cost $800/900K and there are only 9 of us.  Personally I am not a fan of strata loans – the interest rate is high relative to market rates and it is not a way of pushing liability on to the next owner, as any remaining liability will be factored into a future sale price.  Keeping strata levies low will not pay the loan off faster.  In that situation I believe you are better off borrowing the money yourself to pay a special levy.

 

Note if your mother is a tenant and pays market rent and you have this as an investment property, any costs are likely to be deductible for tax purposes.  You should seek advice from an adviser on those issues.

 

More generally if you owned a house then you would also incur expenses from time to time to maintain it, it always puzzles me that people in strata schemes don't consider that.  However – you may not want the uncertainty associated with the building and that would be the overriding factor for me.  This kind of thing can be very grief-making!

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