Brief overview on what to look for when examining strata records - What to look for when reviewing strata records.

Reviewing fund balances is important. However, much can be learnt from reading Meeting minutes. You will get a sense of the issues within the complex. Many strata reports do not go to this level of detail. However, some strata records are accessible online

Beyond strata records, an experienced property inspection person is essential. Many headaches can be avoided with a detailed inspection. Often the report allows you to reframe an offer to take into account the issues the report raises.

Some issues reports will not reveal.

I have seen instances where the vendor company has been struck off by ASIC, complicating a transfer. In both cases, the investment did not proceed for other reasons so dealing with an asset effectively vested in ASIC did not have to be resolved.

One odd experience was an apartment purchase where the neighbour suffered mental health issues. He had forced a next door neighbour to sell after throwing their newspaper on their roof for months. It became apparent that no tenant would stay beyond an initial six month tenancy. The issue was ultimately solved by finding the right tenant and seven years of peaceful tenancies ensued.

The strangest aspect of that example was that the tenant who moved in and lived there quietly for seven years was from another apartment in the complex. The neighbour had past disagreements with him but, when he moved in next door to him, became quite friendly with him and they actually shared the daily newspaper for many years. (Probably a lesson for the person who lived in the house next door who ultimately sold up and left.)

There are, of course, procedures for resolving disputes between apartment owners. But there seemed little point in pursuing this route given the difficulties of proving that the other owner was responsible for tenants not renewing leases and he was unlikely to attend any mediation process or adhere to any agreement. Better to find a tenant who could deal with the situation.

Sometimes the practical solution is more effective than the legal solution.

July 2020

The content of this publication is intended to provide a general overview on matters which may be of interest. It is not intended to be comprehensive. It does not constitute advice in relation to particular circumstances nor does it constitute the provision of legal services, legal advice or financial product advice.