There are two important documents, which are received in relation to the purchase of a strata lot:
- A Section 184 certificate under the Strata Schemes Management Act 2015; and
- A strata report.
Section 184 Certificates are helpful to any purchaser as they:
- Set out levies to be paid;
- Set out levies that have been unpaid by the previous owner;
- Set out how much has been kept in the administration fund and capital works fund; and
- Identify the level of insurance.
The strata report is done for three really important reasons:
- To identify defects in the building which are currently being discussed amongst the strata scheme;
- To identify the functionality of the strata scheme; and
- To identify what is in the capital works plan so that the person can determine whether they are going to suffer a special levy in the near future.
Owner’s corporations love to fight amongst themselves. They love to make complaints and identify defects whether they exist or not. All this stuff forms part of the strata register and is a clear indicator to any prospective purchaser.
We have found, lately, that persons purchasing property are very diligent about looking at the strata report. Buildings that have a low capital works fund, a capital works plan that sets out a fortune in future work, a non functioning strata scheme and a whole pile of defects, will devalue property.
All lot owners should recognise that when they complain to the owner’s corporation, send correspondence, or brawl in open meetings, all it does is devalue their property. This is not just for now, we are finding that purchasers are wanting to go back anything up to five years to ensure that they aren’t buying into a strata scheme which is going to cost them more than their purchase price. Moreover, they don’t want to go into something which is dysfunctional. People want peace and good order; they don’t want to live in World War III.
Is there any value in brawling in the owner’s corporation? If it will get something important done, yes, brawling is valuable. If it is petty, however, all that occurs is the devaluation of your property.
This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.
To get in touch with Bailey, please email email@example.com or call 1300 438 538