What information do pre-purchase strata reports contain?
A pre-purchase strata report is a document produced by an independent company which should give a potential bidder on a property vital information about the building, its structures and related financial information. This information needs to be known before a property goes to auction, and needs to be accurate and relevant.
The company producing the strata report should ideally be locally based and know all the relevant local housing legislation. They should consist of qualified conveyancers, inspectors and strata reporters, and should have considerable experience in this area.
The report should be available within a maximum of 48 hours of being requested, and the company should make the author of the report available to the purchaser for any questions or clarifications about the information it contains.
Pre-Purchase Strata Reports
A strata report should contain a number of sections, which clearly identify the layout of the strata and its management.
Strata Plan Information
This section of the report should set out the number of lots in the strata plan, the number of units, the date the strata plan was registered, the owner of the lot and their address, and if available any mortgage details. It should also specify the total unit entitlement of the scheme, the unit enticement of the lot at an aggregate and the percentage of the total lot entitlement.
Managing Agent
The managing agent plays a significant role in how well the strata is run, both on a daily and weekly basis, and its long-term management as well. It is important to know the name of the company, the address and telephone number, email and the name of the specific strata manager. If available, check the license number of the agent, and when they were appointed.
Financial Information
This is where a strata report needs to be really specific. There are a number of annual levies that could be applicable to the strata, and these need to be clearly identified. The total amount in the owner's funds need to be specified, which will comprise the administration fund and the sinking fund.
The standard annual levies for the previous year should be clearly shown. This is likely to be an admin fund levy on the building, a sinking fund levy on the building, an admin fund levy on the lot and a sinking fund levy on the lot. The levies on the lot are normally payable annually or quarterly.
The section on levies should also show whether there are any future special levies planned, if there have been any past special levies struck the previous three years, and what levies if any are currently in arrears in relation to the building or any of the lots.
Other Financial Information
There is likely to be other financial information detailed in the report, largely relating to the accounting records of the strata, confirmation as to whether the accounts are audited or not, and any other information pertinent to the financial management of the units.
Other information
The rest of the strata report should contain a high degree of relevant information, although its content is likely to vary depending upon the nature of the strata, and any specific information that the purchaser may request to be included.
This is likely to include things such as any relevant bylaws, whether or not animals are allowed to be kept, whether or not smoking is allowed on the property, availability of visitor parking and confirmation that the buildings insurance on the strata is in place and up-to-date.
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