The strata report should disclose whether the strata roll is properly kept, whether the initial period is completed. It should provide details of the insurance policies currently held by the Owners Corporation, the amount held by the Owners Corporation in the administrative fund and the sinking fund, the amounts of current levies payable to the Owners Corporation in relation to the property, whether the Owners Corporation has any loans, whether there have been any recent changes in by laws, the details of the managing agent and whether there appears to be a likelihood of any special levies.
Typically strata reports also give an outline of the history of plumbing problems, disputes, water penetration problems and building defects in the building. They also often give an outline of the important issues that would have been dealt with by the Owners Corporation or the executive committee over recent years. Accordingly the report can assist you in making your decision whether to proceed to purchase or not. If you do go ahead and purchase then the strata report will provide you with details of some of the issues facing the owners in the building.
If you are buying newly constructed strata property or if you are buying "off the plan" then of course you are taking a risk that you will have to deal with the "teething troubles" of the building. In those circumstances you should be familiar with the concept of the "initial period", the holding of the first annual general meeting of the Owners Corporation and the limits that the law places on the powers of the original owner during the initial period.
As an owner of a strata unit you will be entitled to vote at meetings of the Owners Corporation. Your voting rights are in proportion to your unit entitlement. You are entitled to put motions on the agenda for general meetings and speak in favour of such motions. You are also entitled to speak against motions that you do not wish to have passed. You should be familiar with the role of proxies in the management of an Owners Corporation and it may be helpful if you have some knowledge of the way in which meetings should be conducted.
As an owner of a unit in a strata development you may be entitled to be nominated for election as an executive committee member. Regardless of whether you become a committee member it would be useful for you to understand the powers of the executive committee as against the powers of owners at general meetings of the Owners Corporation. As an owner you will be entitled to receive minutes of executive committee meetings.
It has become more common for larger strata developments to have caretakers and building managers. The appointment and powers of caretakers and building managers must be specified in the bylaws of the Owners Corporation and in any management agreements. If caretakers or building managers do not perform satisfactorily or if their charges are unfair or if the management agreement is harsh, oppressive, unconscionable or unreasonable then the owners, through the Owners Corporation, may apply to a tribunal for relevant orders.
As an owner of a property in a strata development you should be familiar with the functions, duties and powers of any strata manager which the Owners Corporation may choose to appoint. Normally the strata manager will be your point of contact for getting things done around the building.
The law requires that the Owners Corporation maintain a strata roll and keep certain financial records. The Owners Corporation must also hold relevant insurance policies and maintain administrative and sinking funds from levies raised against the owners.
As an owner of a property in a strata scheme it is most likely that your property consists only of air space. That part of the strata development which is not owned by owners individually will be owned by the Owners Corporation and known as the common property.
Generally the common property consists of floors, walls, ceramic tiles, pipes in the common property, electrical wiring in the common property, parquetry flooring and floor boards, ceilings and cornices, balcony doors, driveways, gardens, plumbing and sometimes lifts, tennis courts, swimming pools, gymnasiums, shared air conditioners and the like. It is often important to identify whether part of a strata scheme is part of a lot or common property in order to determine the parties responsible for its maintenance and repair.
You as owner and any tenants you have in the property will be subject to the strata by-laws applicable to the particular strata scheme. Commonly strata by laws adopted by strata schemes are in a standard form however many strata schemes have their own individual by laws and sometimes additional by laws customized as appropriate. Before proceeding to purchase in a strata development you should check the form of the by-laws.
If you are purchasing a strata unit in a commercial development and you wish to conduct a business then you must check that the business is permitted under the by-laws. If you are purchasing a strata home unit and you wish to live in it with a pet then it is most important that you determine whether you have the right to have a pet in the property.
Living or operating your business in a strata development means that you will be in very close proximity to your neighbours and you can expect that you might see them often. If you see a dispute arising you should at the earliest opportunity familiarise yourself with the dispute resolution mechanisms provided in the strata legislation.