If you are thinking of buying into a strata scheme, you may have heard of a pre-purchase strata report and wondered exactly what it is. You need to know more, as it is a very important document and it will help you make your decision correctly. What exactly is involved with this report?
The Importance of the Report
Before you ever buy into a strata property, you must gather as much management and financial information about it as possible, and all of this is contained within the so-called section 108 report. There is no requirement for you to access this report, but it makes a lot of sense for you to do so.
Report Inclusions
This document can be quite lengthy and will contain a wealth of information. It will give you an idea of the strength of the management team, how the finances look, what insurance protects the structure and how much money is allocated for 'rainy day' capital works. You'll be able to see what maintenance and repair works have been carried out to the building and how much was spent in doing so. You will also be able to see how much you need to pay into the budget as part of an owner's fee.
Time Allowance
Allow plenty of time to go through this due diligence and remember that these section 108 strata reports can take a while to access. Ask your solicitor to help you get the relevant letter of authority from the property vendor so that you can search for the report.
Assessing the Cost
You may have to budget some money towards obtaining the report, as it can be quite complex to compile. However, this cost can pale into insignificance if it saves you from making an error. Just think how much the value of your purchase is in relation to how much the report ends up costing you.
Subject Clauses
If you do plan to put down some kind of deposit or sign a contract on a property, make sure that you add a clause that makes everything subject to your viewing of the pre-purchase inspection report.
Due Diligence
As the old saying goes, caveat emptor, or buyer beware. Make sure that you take every step necessary to protect yourself before entering into any long-term commitment. For added security, get your attorney to have a look at the report once you've finished with it.
Share21 June 2017
If you are interested in buying your first property, you will want to make sure that you make the right choice. My name is Kenny and last year, I finally got my foot on the property ladder. It was a long journey which took many years. First, I had to save a deposit which took a long time. Once I had my deposit, I had to find a property which I liked and which I could afford. I contacted a real estate company who helped me as I conducted my search. I am pleased to say that I am really happy with my new home.
