Units, townhouses and community schemes

Strata purchases

When you buy into a strata scheme you buy a lot, a share of the common property and a share of the scheme’s problems. The contract tells you about the lot. The strata records tell you about everything else.

General information, not legal advice. This page sets out how the law generally applies. It does not take account of your circumstances, and you should get advice about your own situation before acting on it. The official sources this page is written from are listed on it; where they differ from anything here, they are the authority.

Who this page is for

You are buying a unit, and the building comes with it

Buying into strata is buying into a small organisation. You get a lot of your own and a share of everything around it: the roof, the lifts, the pipes, the driveway, the pool, and the decisions of whoever sits on the strata committee. Those things are funded by levies that you will pay, and governed by by-laws that you did not write.

So a strata purchase has two reviews, not one. The first is the contract for the lot, which is the same work as any residential purchase and is covered on our residential purchase page. The second is the scheme, and it is done from the scheme’s own records.

Those records are where the real information is. Minutes show what the owners have been arguing about. The financial statements show whether the scheme is solvent and what it has saved. The capital works plan shows what is coming and roughly when. Insurance records show whether the building is properly covered. Correspondence and any tribunal file show whether there is a defect claim, a builder in dispute or a neighbour problem that will become yours.

A strata report done by somebody who knows what they are reading is one of the cheapest pieces of protection available in a property purchase, and it is worth having before you bid or make an offer, not after. If it turns up a problem, that problem is either a reason to negotiate or a reason to walk, and both are better decisions than finding out at the first general meeting.

How we help

What the work actually is

Reading the strata report properly

A strata report is raw material, not a verdict. We read it for the things that change the price or the decision: planned works, special levies, defects, disputes, under-funded capital works, insurance gaps and unusual by-laws.

Checking the lot against the plan

Whether the car space, the storage cage, the courtyard or the balcony you were shown is actually part of the lot, is common property, or is subject to an exclusive use by-law. This is the single most common surprise in a unit purchase.

By-laws you will have to live under

Pets, parking, renovations, flooring, short-term letting and use of common property. If something matters to you, we check the by-law for that scheme, and we tell you if what you are planning would need the owners corporation’s approval.

Levies, the capital works fund and special levies

What you will pay, what the scheme has saved, and whether a special levy has been raised, resolved or foreshadowed. A levy struck before settlement and payable after it is a question of who bears it, and the contract answers that.

Defects, building work and the developer

Whether the scheme is dealing with defects, whether there is a claim on foot, and what the records say about the building’s history. For a newer building, whether the protections available to a new strata scheme are in play.

The contract, exchange and settlement

Everything a residential purchase involves, plus the strata-specific adjustments at settlement, including levies apportioned to the day, and the notice to the owners corporation that ownership has changed.

Questions

Questions people ask first

What is a strata report and do I need one?

It is a report on the scheme’s records — minutes, financial statements, levies, insurance, correspondence and the capital works plan — prepared by someone who has inspected them. You are not required to obtain one, and buying a unit without one means buying without knowing the building’s finances or its history. Most buyers get one.

Can I inspect the records myself?

You can arrange to inspect the strata records with the seller’s permission, on payment of a fee, through the strata manager or the secretary of the owners corporation. The practical difficulty is knowing which of several hundred pages matters.

What is a section 184 certificate?

A certificate issued under section 184 of the Strata Schemes Management Act 2015 (NSW) giving information about the lot and the scheme, including financial information and the office holders. It is commonly obtained as part of a strata purchase and is a snapshot rather than a full history.

The levies look low. Is that good?

Not necessarily. Levies fund maintenance and the capital works fund, and a scheme that has kept levies low by deferring work still has the work to do. When it can no longer be deferred, the money is raised as a special levy, and the owner at that time pays it. Read the levies together with the age of the building and the capital works plan.

Is the car space mine?

It depends on the plan. It may be part of your lot, it may be common property, or it may be common property you have exclusive use of under a by-law. Each of those means something different for what you can do with it and whether it can be taken away. It is checked against the registered plan, not against what the agent said.

Can I renovate?

It depends on the work and the by-laws. Minor work, work needing the owners corporation’s approval and work needing a by-law are treated differently under the Strata Schemes Management Act 2015 (NSW). If you are buying with a renovation in mind, tell us before you exchange and we will check what the scheme requires.

What if the building has defects?

Look at what the records say first: minutes, engineers’ reports, correspondence with the builder and any proceedings. A scheme actively dealing with defects may be a scheme facing significant cost, or one that has already secured a remedy. Which of those it is changes the value of the lot, and the file usually shows it.

Is a townhouse always strata?

No. Townhouses and villas may be in a strata scheme, or in a community or neighbourhood scheme under the community land legislation, or occasionally on ordinary Torrens title with no scheme at all. The obligations are different in each case, and the registered plan tells us which one you are dealing with.

What to send us

For a unit we need the contract and the scheme. The second one is what people forget.

The contract for sale in full, with its attachments.
The strata report, if you have already obtained one.
The strata plan, and which lot number you are buying.
Any section 184 certificate provided to you.
The levy notices or the levy figures you have been quoted.
The by-laws for the scheme, if they were given to you.
What you intend to do in the property: pets, a renovation, parking a second car, letting it out.
The agent's name, and the auction date if there is one.
Anything you were told about special levies, building works or defects.