Why does every potential buyer have to pay for a strata report?

Yeah…..but everyone is out to make a buck off everyone else aren’t they? That’s life! How do you know the strata report purchased isn’t biased anyway? The behaviour of crazy neighbours that force the vendor to sell isn’t usually documented anywhere official, and for the purchaser it really is ‘buyer beware’.

In Vic we need to provide our own search as part of our vendor statement which is provided to buyers upon request. The cost is around $150-250 depending on the number of OCs involved, cost is borne by the vendor and payable to the strata manager.  The format is standard and the contents are completed by the strata manager.  It generally takes the strata manager 2 weeks to complete, with a quicker turnaround time anywhere up to doubling the cost.

Only before settlement does the buyer purchase a revised statement to ensure that adjustments are correct.  So there are generally up to 2 statements per transaction in Vic – one of the vendor, the other of the buyer.

Other parts of the vendor statement include extracts from Land Victoria records that include among other things lot surveys and lot liability tables, these available to all prospective buyers who ask at no cost as they are included in the vendor statement.

I cannot imagine paying for my own strata statement as a prospective buyer.  It seems very inefficient, setting aside the cost aspect which would be prohibitive.

kaindub wrote:

I see many properties for sale which have a strata report supplied by the owner. The question I pose is, if you were the vendor, would you commission a report that paints an adverse picture of that strata?.

Hi Kaindub, thanks for your reply.  I appreciate all your contributions to this site!  I think we have a different understanding of the strata report.  In Vic, the report completed by the OC manager includes all lot-specific things like levies owing and the like, issues specific to the lot or affecting the lot, special levies struck, anticipated future levies based on the current financial condition, the most recent minutes from the OC and details specific questions and answers which any reasonable buyer might want to know before committing to purchase (e.g. our most recent sale included a transparent but unhelpful (for us) statement from the OC manager that there was a cladding issue on site – albeit it did not affect our unit).  The information supplied also includes the full maintenance plan for the site which looks at all the nooks and crannies of the complex.  So the vendor pays for this information once and it is available to all potential buyers at no cost as part of the vendor statement.  I think this is fair, reasonable and transparent for all.  There is no need for any buyer to pay for such a report unless they are under contract and need an updated financial position prior to settlement.

Jimmy-T wrote:

We have a similar system in NSW. But a proper strata report is something else entirely and can be a deep dive into the minutes, agendas and decisions of the committee, as well as a look at correspondence and finances.

Thanks for the clarification, I now understand where you and Kaindub are coming from. I guess I view the vendor disclosures and the strata reports (ours in the above example totalled something like 50+ pages when the full 10 year maintenance plan was included) as ample for most buyers, but a more forensic report would be helpful for the buyer and perhaps demonstrate the sound or otherwise governance in place.  That kind of report is something that current owners would find very insightful too, so perhaps something that could be a part of an annual/biennial ‘strata audit’ of sorts (if such a requirement existed, it would be a great report I think but could discourage committee members from signing up).  How that report would clearly be able to identify that the committee was ruled by a dominant chair or that decisions were made to largely favour of a few vested interests and that the report writers would be able to write that as being the case, I can’t quite see though.

Thanks too for your work in putting together this site, Jimmy.  It is a great resource for the strata community.