When you buy an apartment or a strata title townhouse, you're not just buying your unit. You're buying a share of the building and joining a community of owners who collectively own and maintain the common property. The strata report is the document that tells you what kind of building and community you'd be buying into, and it's one of the most important pieces of due diligence you can do. Here's how to make sense of one.
What a strata report is
A strata report is a review of the records of the owners corporation (sometimes called the body corporate). It covers the building's finances, its maintenance history, any disputes, planned works, and the rules that govern the property. You typically arrange one through a strata search company before you buy, and it draws on the official records of the building. Think of it as the building's health check and financial statement rolled into one.
Start with the money
The financial health of the owners corporation is the first thing to understand, because it directly affects your costs. Look at the levies: how much do owners pay quarterly, and is that in line with similar buildings? Then look at the two main funds. The administrative fund covers day to day running costs. The capital works fund (sometimes called the sinking fund) is the savings pool for major future maintenance like painting, roofing, lifts, and waterproofing. A healthy capital works fund suggests the building is being managed responsibly and that big future costs are being planned for. A near empty one can mean a special levy is coming, where owners are asked to pay a lump sum to cover work the fund can't.
Look for special levies and planned works
The report should reveal any special levies that have been raised or are being discussed, and any major works that are planned or have been quoted. This matters enormously. Buying into a building that is about to charge every owner thousands of dollars for remedial work is a very different proposition to one with money set aside. If major works are on the horizon, you want to know before you buy, not after.
Check the building's history
A good strata report reveals the building's track record. Look for any history of significant repairs, particularly water ingress, waterproofing failures, or structural issues, since these can recur and are expensive. Look at whether there's a pattern of disputes among owners or with the building manager, which can signal a difficult community to be part of. And look for any insurance issues or building defects that have been raised, especially in newer buildings where defect disputes are common.
Read the by-laws
The by-laws are the rules of the building, and they affect how you can live there. They might cover whether you can keep a pet, whether you can renovate and under what conditions, rules about short term letting, noise, parking, and use of common areas. If something matters to you, such as keeping a dog or renovating the bathroom, check the by-laws allow it before you commit.
The bottom line
A strata report turns an apartment purchase from a guess into an informed decision. It's worth obtaining and reading carefully, or having someone explain it to you, before you make an offer. Your own inspection of the unit and the building tells you how the place looks and feels. The strata report tells you whether the building is financially sound and well run, which is just as important and far harder to see with your own eyes.