If everyone who was ever considering buying a strata apartment read this page there would be a lot less problems than there are! This list is not exhaustive, but we have pointed out some of the ideas that we think are important.

The following ideas will assist and get you started:

• By-laws: Read the by-laws that apply to the building. You can learn a lot from the existing by-laws. For example, is it easy to renovate, are the conditions onerous. If there are no by-laws, that might be cause for concern. By law, the complete set of by-laws must be attached to the contract. The by-laws will also indicate if there are likely to be other problems, eg if the strata scheme is “pet friendly. Don’t trust the real estate agent to provide you with advice on what by-laws apply to the strata scheme – read them yourself.
• During the inspection: Look around the building, look at the notice-board. There should be a set of minutes on the board, or else notices etc. Look around also for parking spaces, visitor spaces, internet connections etc.
• Check the strata plan: Make sure that you are actually purchasing the same apartment that is shown to you, and the same car space. If you cannot read a plan (really well), a surveyor will confirm the strata plan for you for a nominal fee. Many people have purchased apartments and have been horribly surprised to find that they have actually purchased an different car space to the one that they thought that the Agent showed them. There are horror stories of people even buying the wrong apartment.
• Check out your neighbours: Recognise that there is a dramatic difference between strata apartments and houses, your neighbours are much closer in a strata apartment, there can be far less privacy and noise can be far more intrusive. Visit the scheme at different times of day and night in order to be able to better assess your new neighbours. You might like to even say hello to some of the neighbours before you purchase.
• Strata search: Always engage a professional strata search company to review the records. Our opinion is that we would not entrust this entirely to someone and expect to get a great result for say $200 or the going rate. We would always advise that you go along at the same time (or independently) and read the minute books myself. Professional search reports can be very clinical and important detail can be missed. Some strata apartments maintain a “perfect” set of minutes but the actual building might have numerous problems. Remember that strata search companies do not actually inspect the building so the reports can portray a picture of the building that is not entirely accurate. Large problems (including financial liabilities) might have been identified in say Minute Book 5 (three years ago) but never acted on. A few years later (by say Minute Book 10) these issues have been largely forgotten (or at least not mentioned) by the executive committee who have put their “head-in-the-sand”. Most strata search companies will only read the last Minute Book or two and these searches have been known to miss major issues and large liabilities.
• Section 109 certificate (s109): By law a legal document called a “section 109 certificate” must be attached to every contract of sale of a strata apartment in NSW. If you are in any doubt as to the finances of a strata scheme, you should pay for an additional s109 certificate to be produced before you pay a deposit or sign a contract. The cost is normally minimal (less than $100.00) and it will provide significant peace-of mind for a prospective purchaser. Many strata managers provide a form or instructions on their website outlining the process. If you follow the normal course of events, you will only receive the s109 certificate a day or two before settlement and that is often too late, particularly for example if there are large debts owed by the previous owner or else the by-laws have recently been changed. There is nothing to say that you cannot order a extra s109 certificate very early in the process. It is good insurance. Often, just asking for a s109 from the strata manager shows that you are serious.
• Use your brain: Always take a good look at the general level of repair and maintenance of the building (in particular new buildings). There is nothing worse than buying an apartment only to find that levies have to be increased dramatically (say double) soon after you purchase. Take a critical look at lifts, fire safety measures, concrete cancer and the like. If the lifts are 25 years old they will have to be “modernised” or replaced (by law) within the next few years. If there are cracks in the walls you will have to pay your share, so take a walk around the building and look carefully. Does the building have a fire system, if not then you can almost guarantee that the local council will demand that one be installed before too long. Check to see if there is money in the bank – if the bank is empty special levies will have to be called or a large loan taken out to finance the repairs. Look for a similar building and compare levies if you are doing lots of inspections.
• Building and pest inspections: You can often sensibly save money on inspections, many strata buildings will already be doing a range of building inspections as part of their normal business of running the building. For example many strata buildings have an annual pest inspection and treatment. Copies of these reports will often be filed with the Minute books. You can often potentially save yourself a lot of money if you obtain a letter from the real estate agent to say that you are a potential purchaser, then inspect the site and read the records to see if building inspections have already been done and paid by someone else. You will probably not get this level of information from a strata search.
• Talk to the Strata Manager / or Chairperson: Finally, it is often good to talk to the strata manager or else the chairperson of the executive committee. The way they answer the phone will often say a lot about how the building is run. Are they welcoming or do the run the building like a prison.

Finally, if you are in any doubt, always get professional advice. There are a lot of professions that can assist you before you purchase. Seek help wisely.