› Flat Chat Strata Forum › New to strata – or just strata-curious › What checks should a buyer undertake before purchasing a strata lot? › Current Page
Yes, I agree. You should engage a specialist strata searcher to search the books and records and provide a report with respect to the financial position of the strata scheme, whether there are any past or current disputes (both legal and personal), by-laws including those conferring rights of exclusive use of common property on one or more lot owners; amount of levies set per quarter for sinking and administrative funds and the potential for special levies.
You may also wish to check out austlii website and search for any cases before the Tribunal or Courts concerning the strata scheme in which you propose to purchase. The results of such search will provide an indication as to whether the Owners Corporation could be potentially liable for damages and costs (for instance against an aggrieved lot owner).
Primarily, your strata searcher should look closely at the last budget and the balance sheets to ensure that the Owners Corporation's spending is in line with the budgets agreed upon by the owners at the last Annual General Meeting and review any unusually large expenditure (both current and proposed). Generally, the financial accounts speak for themselves.
In addition, review the Executive Committee minutes of meetings and ascertain the types of decisions the EC is making. For instance, is it unreasonably litigious or agreeing to inappropriate items of expenditure. Question whether the Executive Committee is restricted in its powers by the Owners Corporation including any limitations on spending.
Finally, the strata searcher should review any reports such as engineer's reports with respect to the structural integrity of the building and ascertain if any claims have been made on the strata scheme's insurance.