Flat Chat Strata Forum Living in strata Current Page

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  • #65164
    nemisis
    Flatchatter

      One thing that REALLY ticks me off, is when you go to inspect a property, and the agent insists the only way to receive a strata report of a property, is by purchasing it – the laws need to change.

      Why doesn’t an owner (or an agent) wish to be transparent? I sold an apartment a year or so ago, and for that sale, I handed over a “sales pack” for the agent to deliver electronically, this “sales pack” to potential interested parties – strata report, the last 5 copies of AGM/EGM’s, works done to the building, etc.

      WHAT ARE YOU HIDING SELLERS/AGENTS?

      • This topic was modified 1 year, 10 months ago by .
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    • #65220
      Sujenna
      Flatchatter

        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’.

        #65228
        Jimmy-T
        Keymaster

          Best to get your own strata search done with parameters set by you.  Or a shared search from one of the companies set up to provide low-cost, independent searches.  You would hesitate before paying good money for a strata search provided by the vendor’s real estate agent, that’s for sure.

          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.
          #65260
          86_strata
          Flatchatter

            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.

            #65280
            kaindub
            Flatchatter

              86 strata

              in NSW we have the same as you describe.

              But this is not a strata report. A strata report, as we understand it in NSW , is not a mandatory part of purchase. It’s ordered by a purchaser to look at the finances, the minutes, the correspondence and any other records. It usually tells the story of the strata.

              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?.

              Thats why a purchaser should always get their own independent examination of the strata records.

              #65360
              86_strata
              Flatchatter

                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.

                #65365
                Jimmy-T
                Keymaster

                  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.

                  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.

                  There is at least one thread on this site where a purchaser was not told that, even though the block had pet-friendly by-laws, they were actively considering banning pets. And, in fact they did so between the purchaser making an offer and finalising the purchase.

                  A proper strata report would have revealed that and save a lot of stress and distress (all of which is redundant now, of course).

                  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.
                  #65369
                  86_strata
                  Flatchatter

                    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.

                    #74817
                    stratasolutions
                    Flatchatter

                      I completely understand your frustration regarding the need for potential buyers to purchase strata reports individually. It’s an issue that many prospective buyers face and feel strongly about. Here’s a breakdown of the situation:

                      Lack of Transparency: Many potential buyers share your sentiment that sellers and agents should be more transparent. Providing a comprehensive “sales pack” with all relevant documentation, including strata reports, AGM/EGM minutes, and details of any works done, would indeed foster trust and streamline the buying process.

                      Cost and Convenience: Having to purchase a strata report for each property can become expensive and time-consuming, especially for buyers who are considering multiple properties. This added expense can deter serious buyers and creates an unnecessary financial burden.

                      Why It Happens: There are a few reasons why the current practice persists:

                      • Legal and Regulatory Requirements: In some regions, there are specific legal requirements dictating how strata information must be disclosed. Unfortunately, these regulations often place the onus on the buyer rather than the seller.
                      • Agent Practices: Some real estate agents may prefer this method as it reduces their workload and shifts the cost burden to the buyer.
                      • Market Norms: In many places, this has become a market norm, and changing entrenched practices can be slow and challenging.

                      Potential Solutions:

                      • Legislative Change: Advocacy for legal reforms that mandate sellers to provide comprehensive property information upfront could be a long-term solution. This would ensure that buyers have all necessary information without additional costs.
                      • Industry Best Practices: Encouraging real estate agents and sellers to adopt best practices voluntarily, such as providing a “sales pack,” could improve transparency and buyer experience.
                      • Consumer Advocacy: Buyers can collectively voice their concerns through consumer advocacy groups to push for changes in industry standards and regulations.

                      Ultimately, greater transparency benefits everyone involved in the real estate market. Sellers might find their properties selling faster when buyers have more confidence in the available information, and buyers can make more informed decisions without incurring unnecessary costs. Your approach when you sold your apartment sets a positive example that, if widely adopted, could significantly improve the property buying process.

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