We cannot stress enough how important it is to read strata documents if you are purchasing a condo or a townhouse.
Reading the strata documents will give you a really good idea of the following:
- If there are any upcoming special levies.
- how well the strata council runs the budget,
- how much money there is in the contingency reserve fund,
- if there are any major repairs coming up in the strata or if any major repairs have just been done.
- This is particularly important if you are buying a property in an older building or complex.
When we help you buy a strata property, we request 2 years of strata documents from the listing Agent and these include the following:.
Council minutes: We request 2 years’ worth of minutes from meetings that are held throughout the year where just the strata council meet.
Annual General Meetings: These are minutes from the AGM held once a year with strata council and strata owners. At these meetings owners get to vote on any matters put forward by the strata council.
Special General Minutes: These are minutes of meetings that are held with council members and owners to vote on any matters that cannot wait until the next Annual General Meeting.
Form B: This document confirms the amount of strata fees payable as well as the parking stall & storage locker number (condos), how many units in the complex that are rented and how much money is in the contingency reserve fund – CRF. (The amount of money that strata has to pay for expenses that come up through the year that are not in the budget).
Insurance Summary: You will need this summary when you get your quote for your personal insurance. It sets out the summary of coverage in place for the building and the deductible amounts that would be payable for various occurrences such as water damage. Your insurance broker will be able to give you a quote based on the information set out in the insurance summary.
Financials/Budget: Each year the strata council put together a budget for consistent items that need to be paid for throughout the year. At the AGM owners can vote to approve the budget. The budget you see lists the items that are being paid for and how much is being spent on them. This could include items such as the strata management company, landscaping, garbage pickup etc.
Depreciation Report: This is put together by an engineering company that would be experienced in depreciation reports. They look at all of the components of the building, such as roof, balconies, windows, exterior cladding etc. They also look at the age of the building and put together a proposal on how the strata council could budget for the repair or replacement of the various components in the future.
Engineering/Warranty Reports: Depending on the age of the building there could be a variety of engineering or warranty reports contained withing the strata documents covering various components of the building.
Strata Plan: This is the plan that is registered once the building/complex is complete. It shows the layout of the whole strata and location and size of all the units. Please remember that the strata plan number for the home you are buying is not necessarily the same as your unit number.
It may be a lot of reading but it is essential!!