- This topic has 16 replies, 6 voices, and was last updated 4 weeks, 1 day ago by .
15/01/2024 at 6:44 pm #72210AIFlatchatter
My husband and I are first home buyers and we are interested in buying a unit (to live in) in NSW. Upon reading the strata report we realised that one person has 3 properties in the complex of 10. According to Domain 35% of the properties in the building is an investment. This person is one of two committee members. At the last 4 AGMs, 3to 5 people attended.
Is this something we should be very concerned about? The idea that one person that we haven’t even met, seemingly has a lot of power over the building we may own in, makes us feel uneasy. But we are completely new to this and wanted to see what other, more experienced people thought of this.
Thank you for your input 🙂
- This topic was modified 1 month, 2 weeks ago by .
17/01/2024 at 2:31 pm #72220BoroniaFlatchatter
I live in a block where one owner has 15 out of 21 lots. They run it as their own little self-managed fiefdom.18/01/2024 at 1:29 pm #72242kaindubFlatchatter
It can be good. It can be bad.
If the major owner is a “ good guy” he may have the interest of the property at heart, given they have a large investment in it.
On the other hand , they could be the owner for hell, and refuse to any investment in the building and support rules that support their interests.
Have a good look at the property. Is it in good condition? Or is lots of obvious maintenance required.
Look them at the meeting minutes. You won’t be able to tell who voted for what, but are there lots of motions that are reasonable being voted down.
look at ALL the correspondence. Is everyone getting a fair say, or is one owner dictating to all the others.
It could be a good investment. With some due diligence it’s not hard to pick the good from the bad.19/01/2024 at 5:37 pm #72282CharleeFlatchatter
Are the families related to the original owner/builder? If yes stay well away.
Who is on the strata committee – is it just a representative of those three units, are there any members from the other units? How often do they have strata committee meetings? If no or very few strata committee meetings that’s a red flag.
Yes there is a possibility that you can get someone “good” representing those lots but it’s really hard to figure that out before you sign – and if the family owners are a pain to deal with and there has been drama within the OC it’s not as if the vendor will disclose that (because it will impact their selling price).
This is coming from experience – you’re lucky you have this info before your purchase… I and other recent purchasers in a building similar with a. similar ownership structure didn’t actually know as the strata reports we got weren’t that good. And now we spend a lot of time fighting.19/01/2024 at 11:14 pm #72299
Good afternoon Al,
(1) According to Domain 35% of the properties in the building is an investment.
Don’t believe everything you read on Domain or other sales websites as often the information is out of date. Furthermore, what difference does it make if the unit are owner occupied or investments? I am sure owners (occupiers or not) want to maximise the value of their properties and will act accordingly;
(2) At the last 4 AGMs, 3to 5 people attended.
Do you mean 3 -5 attended in person or a total of 3 – 5 were represented in person and by proxy?
Also, how many turn up is not indicative of whether the scheme is a democracy. It is only indicative of interest or lack of exhibited by owners.
(3) The idea that one person that we haven’t even met, seemingly has a lot of power over the building we may own in, makes us feel uneasy.
Objectively, whether you meet him or not is not relevant.
Your concern about one owner “seemingly has a lot of power” is misplaced. If he owns three lots and you one lot, regardless of the number of lots in the strata scheme, do you expect to have the same “power” as him? Of course he has “power” but no more than if he had one lot and was mates with others who would always vote with him.
The issues you should focus on are (i) are levies reasonable; (ii) is the state of the building reasonable; (iii) Are there minutes of meetings you can inspect?; (iv) is the place expensive to upkeep eg are there lifts? A pool? A gym? caretaker? and (v) is there a strata managing agent or does the committee run the place?19/01/2024 at 11:15 pm #72304
Your concern about one owner “seemingly has a lot of power” is misplaced.
How do you know? Three votes out of 10 is an effective veto on by-law changes that the owner of the three units may not like. That’s a lot of power for one owner.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.19/01/2024 at 11:16 pm #72300
Thank you for your input! 15 out of 21 is a lot. I will do some research and learn about self-managed strata.19/01/2024 at 11:16 pm #72301
I looked at meeting minutes but the information was not sufficient to suss out what this person was like. I used the link the agent provided to obtain the strata report, via ‘Before You Bid’. Do people visit strata manager and look at the records available at their offices, or do they just read the strata report provided, which is what I did?19/01/2024 at 11:18 pm #72307
Do people visit strata manager and look at the records available at their offices, or do they just read the strata report provided, which is what I did?
Savvy purchasers pay for a forensic report by an experienced person who will dig through minutes to detect contetious issues and plans, for instance, to change by-laws.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.19/01/2024 at 11:19 pm #72302
Thanks for your input. Yes, the agent said this person was the builder for the building ( I didn’t have this information when I made the post). For my education, could you please share why this is not good?
I did not think to check the frequency of the strata meeting, I will do that. Thank you. The strata committee is made up of two people, the person who owns the 3 properties and another seemingly unrelated person.
I am sorry to hear about your situation. And thanks for sharing.19/01/2024 at 11:20 pm #72309
For my education, could you please share why this is not good?
Do a search for posts by Flatchatter “Faraway Girl” – her issues will tell you everything you need to know about how things can go wrong.
The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.21/01/2024 at 11:56 pm #72324
Jimmy, it seems I was unclear. Of course 3 out of 10 votes is powerful and a possible veto wielding situation. What I meant was that it doesn’t help Al, the original poster, to dwell on such matters as (a) she can’t control and (b) is a function of democracy.21/01/2024 at 11:56 pm #72325
Further to Jimmy’s point on hiring an experienced person to look into the minutes etc, while that is a good idea, be aware of situations where, as I have experienced, some committees choose not to hold strata committee meetings and hence while there may be significant issues at the scheme and they may or may not be attended to. Importantly, without meetings there are zilch minutes so nobody outside the strata committee would have a clue what’s really going on at the scheme.21/01/2024 at 11:59 pm #72332
some committees choose not to hold strata committee meetings and hence while there may be significant issues at the scheme and they may or may not be attended to.
In which case you you don’t buy in. There are no schemes in Australia that don’t have or have never had problems. It’s better to find records of a scheme that’s had issues and resolved them than to find no recorded issues at all.22/01/2024 at 4:54 pm #72335
Hi TrulEConcerned, Thank you for offering your perspectives. I am completely new to buying a property so points you made were very helpful for me to know. I understand that I cannot dwell on everything that could potentially go wrong, but trying to equip myself with knowledge to manage risk.
Hi Jimmy, Thank you so much for your input. I read through Faraway girl’s topic, what a mess! I did not expect the man himself to make comments on my humble post, and they were much appreciated. I read your newsletter religiously and I am grateful for this great website/forum you have built. It is truly like standing on the shoulders of giants.
Thank you everyone who went out of their ways to comment on my post. We have decided to walk away from this property. Our journey of buying our first property continues, and I hope that we continue to learn along the way. I hope you all have a beautiful day. Thanks again 🙂25/01/2024 at 12:23 pm #72350kaindubFlatchatter
Just a piece of advice to anyone who gets to the bottom. Whilst the minutes record the formal decisions made, a lot of “ talk” in strata goes on via email. It’s so easy to send emails today that people tend to not censor. When inspecting the records of the strata, make it absolutely a point to look at the emails. Emails form a part of the strata record and any interested party has a right to see them. There are some strata managers who deny such access. That’s a red flag. Also many so called strata inspection companies fail to look at the emails. It could take hours to troll through thousands of emails, when they are being paid a fixed fee.
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