What’s in a Strata Title Search and Report and Why do You Need One

Buyers often shy away from getting a strata title search and report because of the expense, or because they don’t understand why it is important to get one. However, we suggest that whenever you are considering purchase in a strata titled property that you obtain a strata report.

Why? When you receive the strata title search and report, it contains the financial records for the strata scheme as well as for the lot you are considering purchasing. This shows how much is in the administration fund, how much is in the sinking fund, and if there are any outstanding fees against the lot.

This report will also include detailed minutes of the last strata meeting andAnnual General Meeting and should include information including:

• Building defects that have been identified
• How much money is in the sinking fund or capital works fund to cover repairs?
• If there have been any special levies put in place or any special levies are being discussed

Special levies can be used if there are major works to be done and not enough money in the sinking fund to cover the works. These levies are split between the number of properties owners within the scheme based on their allocated interest.

A strata title search and report will also show how much money has been spent on various aspects of running the scheme including consulting fees, accounting fees, legal fees and administration fees. If there have been fees spent on consulting and legal, it is a wise idea for your lawyer to find out why. Sometimes there may be a long-standing dispute in the corporate records of the owners, other times there may be disputes between the owners and any on-site manager. You need to know and understand the history and what is being done to fix the issue.

When you buy into a unit, townhouse or apartment, you become a part of the scheme, so it is important to go in with your eyes open, educated and have an understanding of how everything is run. Obtaining a report may save you thousands.

Byron Bay Property Lawyers has over thirty (30) years of experience in managing conveyancing for strata property purchases. Our experts will take the time when you are looking to buy a unit to clarify your obligations under the strata scheme. We will guide you through the steps involved in buying your strata titled property and make sure that any potential costs such as strata levies are transparent to you.

Steps Involved in Buying a Unit

Much like buying a house, there are steps involved in buying a unit, townhouse or apartment, including:

The Agreement: This is the purchase agreement you will sign to confirm your purchase. At Byron Bay Property Lawyers, we will go through an explain the contract to you, make sure you understand, ask the Vendor’s (Seller) solicitor to may any necessary modifications and have you sign the contract.

Inspections and reports: There are a few inspections and reports that are recommended for you to undertake before exchanging contracts including:

• Pest Inspection Report – We recommend that the property be checked thoroughly by a qualified pest inspector. This will give you information on any damage, such as an infestation of termites.
• Building Inspection Report – To let you know its structural condition, we recommend that a qualified building inspector thoroughly check the property.
• Strata Roll Inspection – This considers the importance of the property, including the levies from the strata, money requirement and administrative funds alongside the other property information.

It is important to note that in a strata titled property, any inspections will only be carried out on your lot – they will not include the common property. This is why it is important to have a strata report done.

Financials

We will need to provide your finance provider with copies of certain documents if you are borrowing money to help buy the property. To avoid unnecessary delays in getting your finances approved, we can speak to the financial provider directly.

Deposits

Usually, before you commit to purchasing the strata-titled property, you will have to pay 10% of the purchase price to the real estate agent of the vendor. An agreement for a smaller deposit to be paid is sometimes reached. Please contact our office if you are unable to pay a deposit, to discuss the option of paying a deposit through a Deposit Bond.

Contract exchange

We will confirm with you that you are happy to proceed once all of the above matters have been dealt with. We will exchange the Agreement signed by you with the Agreement signed by the Seller. The property is off the market then!

Cooling Off Period

You’ll be given five days to ‘cool off’. This means that you can still back out as long as you have not agreed to waive your cooling off rights if you change your mind about buying the unit. If you cool off, you will forfeit 0.25 per cent of the purchase price to the seller, but you will get your deposit balance back and are free to walk away from the contract.

Between exchange and settlement

In the period between exchange and settlement, we will conduct enquiries into the strata titled property. This usually includes any searches with the local Council and Water Authority. We will ensure that any outstanding rates and levies are either paid up to date or adjusted in the settlement price.

At Byron Bay Property Lawyers, we will prepare the transfer paperwork and have it stamped prior to settlement by the Office of State Revenue. We will also prepare a notice to the Strata Managing company to inform them that you are the new owner of the property; this is sent on settlement

We also work (if applicable) with your finance provider, ensuring that everything is in order for settlement to take place on the appointed day.

The Week Prior to Settlement

In the week prior to settlement, we calculate any outstanding rates or levies that the vendor owes and either request for the solicitor to have these fees paid or adjusted in the settlement figure. Before your purchase settles, we recommend that you arrange a final pre-settlement inspection to ensure the property is in the same state as when you signed the contracts. We will remind you of this inspection as settlement date approaches.

Settlement

Settlement day can be nerve racking, particularly if this is your first purchase. On settlement day we will ensure that the correct title and transfer documents are exchanged and provide the vendor’s solicitor with the balance of the purchase price. We will advise you once settlement has taken place, and you can then arrange with the real estate agent to collect the keys to your new home and move in

Every property is different, and often requires various searches to be performed. It is important to have an in-depth discussion with your property lawyer about the property. This ensures they can determine which strata title searches and reports need to be carried out. It is also important to have your lawyer look over the contract to make sure everything is in order.

Considering buying or selling your strata titled property? Contact us at Byron Bay Property Lawyers to find out how we can help with your conveyancing matters.