Buying an apartment involves more than inspecting the individual lot. You are also buying into a shared building, contributing to its ongoing costs and becoming part of an owners corporation.
That makes the strata report one of the most important parts of your apartment due diligence.
A strata report in NSW can help you understand how the scheme is managed, how financially prepared it is and whether there are issues that could affect your costs or enjoyment of the property. It may include financial statements, meeting minutes, levy records, insurance information, by-laws, maintenance documents and correspondence relating to the scheme.
The volume of information can feel overwhelming, particularly when you are working within a short sales campaign or preparing for an auction. The key is knowing where to focus.
Here are five areas every apartment buyer should check before committing to a strata property in NSW.
1. The scheme’s finances, levies and capital works plan
Start by looking beyond the advertised quarterly levy. Low levies can sound appealing, but they do not necessarily mean a building is inexpensive or well managed.
An owners corporation generally maintains two main funds:
- The administrative fund, used for regular operating expenses such as cleaning, utilities, insurance and routine maintenance.
- The capital works fund, used for major repairs, replacements and longer-term building expenses.
Review the balances of both funds, recent income and expenditure, levy arrears and the scheme’s current budget. You should also check whether any special levies have recently been raised, are currently payable or are being discussed.
Pay particular attention to the 10-year capital works fund plan. In NSW, this plan is used to identify and budget for major work to common property. Compare the work forecast in the plan with the money available in the capital works fund. If expensive projects are approaching but the fund balance is low, owners may need to contribute more through higher regular levies or a special levy.
Financial red flags to look for
- A low capital works fund balance without a clear funding strategy
- Significant levy arrears across the scheme
- Repeated or unusually large special levies
- Major forecast work that does not appear to be adequately budgeted
- Sharp increases in insurance, maintenance or legal costs
- Financial statements or plans that are missing, unclear or out of date
It is also important to confirm the lot’s unit entitlement, as this commonly affects the share of levies and other owners corporation costs payable by that lot.
2. Building defects, repairs and planned major works
A strata inspection report should help you identify known building issues and understand what is being done about them.
Review meeting minutes, maintenance records, reports, quotes, invoices and correspondence for references to problems such as:
- Water ingress, failed waterproofing or recurring leaks
- Concrete cracking or structural concerns
- Balcony, façade or roof repairs
- Fire safety defects or compliance work
- Lift, plumbing or electrical problems
- Mould or drainage issues
- Combustible cladding
One mention of a repair does not automatically mean you should walk away. Buildings require maintenance, and a scheme that identifies and addresses issues may be better managed than one with very little recorded activity.
The more important questions are:
- Has the cause of the problem been properly investigated?
- Is there a qualified report or defined scope of work?
- Has the owners corporation approved a repair plan?
- How much is the work expected to cost?
- Is sufficient money available?
- Is the matter covered by insurance, a building bond, defect insurance or a builder or developer claim?
- Has the same issue appeared repeatedly without resolution?
For newer developments, check whether there are records relating to the Strata Building Bond and Inspections Scheme or any relevant defect insurance. These protections may assist in certain circumstances, but buyers should still understand the status, scope and funding of any outstanding rectification work.
Remember that a strata report is not a substitute for a physical building inspection. Your conveyancer, strata inspector and relevant building professional can advise which additional checks are appropriate for the property.
3. Meeting minutes, disputes and the scheme’s decision-making history
Financial statements show where money has gone. Meeting minutes often explain why.
Read the minutes from annual general meetings, extraordinary general meetings and strata committee meetings. Do not limit your review to the most recent meeting; recurring concerns may only become clear when you look across several years.
Minutes can reveal:
- Planned upgrades and major expenditure
- Proposed or approved special levies
- Recurring maintenance complaints
- Building defect investigations
- Disagreements about repairs or spending
- Changes in strata or building management
- Legal advice, mediation or tribunal proceedings
- Concerns about noise, parking, pets or short-term letting
- Whether important decisions are regularly delayed
Disagreement is not unusual in a community of owners. However, persistent conflict, unresolved legal action or repeated delays to essential maintenance may create additional financial and practical risk.
Look for evidence that the scheme follows issues through: clear resolutions, assigned actions, obtained quotes and recorded progress. Consistent, transparent decision-making can be a positive sign that the committee and owners corporation are actively managing the building.
4. Insurance cover and claims history
The owners corporation is responsible for arranging compulsory insurance for the strata building and may hold other relevant policies. Your strata report NSW review should confirm that insurance is current and appropriate for the scheme.
Check:
- The policy period and insurer
- The building sum insured and date of the latest valuation
- Public liability and other relevant cover
- Any exclusions, excesses or special conditions
- Recent or recurring claims
- Whether a major claim remains open or disputed
- Significant changes in premiums or excesses
A history of claims does not necessarily indicate poor management. The nature and frequency of claims matter. Multiple water-damage claims, for example, may point to an underlying maintenance issue rather than a series of unrelated incidents.
Strata building insurance also does not replace cover for everything inside your apartment. Buyers should obtain advice about their own contents, fixtures, improvements, liability and landlord insurance needs, where relevant.
5. By-laws and responsibilities affecting the apartment
Before buying an apartment in NSW, make sure the scheme’s rules fit the way you intend to use the property.
Review the registered by-laws as well as any recently approved changes. By-laws may cover:
- Keeping pets
- Noise and use of common property
- Parking and visitor parking
- Smoking
- Renovations and hard flooring
- Moving procedures and lift access
- Short-term rental accommodation
- Use of balconies, courtyards or storage areas
- Waste disposal and shared facilities
You should also check for any common property rights by-law or other arrangement connected to the lot. These may grant exclusive use of an area or make the owner responsible for maintaining particular items. Renovations completed by a previous owner should have the necessary approvals recorded where required.
Compare the contract, strata plan and strata records carefully. Confirm that car spaces, storage cages, courtyards or other areas promoted with the apartment are legally attached to the lot or supported by an appropriate right—not simply used informally.
What if the strata report reveals a problem?
Very few buildings have a completely spotless history. The aim of a strata report is not to find a perfect scheme; it is to help you understand the risks and likely responsibilities before you buy.
If something concerns you, ask:
- What is the issue and how serious is it?
- Has the owners corporation agreed on a solution?
- What is the estimated cost and how will it be funded?
- What portion may be payable by this lot?
- Could the issue affect your finance, insurance, intended use or future resale?
Raise any concerns with your solicitor or conveyancer before you exchange contracts or bid at auction. Depending on the issue, they may recommend further enquiries or advice from a strata inspector, building consultant, engineer, accountant or insurance professional.
A strata report is an essential part of apartment due diligence
A well-prepared strata inspection report gives you a view beyond the apartment walls. It can show whether the building is financially prepared, whether maintenance is being addressed and whether the scheme’s rules and decision-making align with your expectations.
When conducting apartment due diligence, focus on the relationship between the records. A planned repair may be manageable when it is supported by expert advice, a clear timeline and adequate funds. The same repair becomes a greater concern when costs are unknown, funding is insufficient or decisions have been repeatedly deferred.
Taking the time to understand the strata report – and seeking qualified advice where needed – can help you make a more informed decision about the apartment and the community you are buying into.
Considering a strata property? Explore the Strata Plus resource hub for practical information about levies, repairs, by-laws and living in strata across NSW.
This article provides general information only and does not constitute legal, financial, property or insurance advice. Buyers should obtain advice appropriate to their individual circumstances before purchasing a property.
FAQs:
What is a strata report in NSW?
A strata report summarises or compiles information from an owners corporation’s records. It may include financial statements, levy information, meeting minutes, insurance details, by-laws, maintenance records and information about disputes or building defects.
What should I look for in a strata inspection report?
Review the scheme’s finances, levies and capital works plan; known defects and planned repairs; meeting minutes and disputes; insurance; and by-laws or lot-specific responsibilities. Consider how these areas connect rather than assessing any single figure or document in isolation.
Is a strata report compulsory when buying an apartment in NSW?
A buyer is not generally required to obtain a strata report, but reviewing the strata records is an important part of due diligence. A solicitor, conveyancer or professional strata inspector can help you understand the records and identify where further advice is needed.
Does a strata report show upcoming special levies?
It may show special levies that have been proposed, approved or raised through meeting minutes, budgets, levy records or financial statements. Buyers should ask their conveyancer to confirm what has been struck, what remains payable and how liability is dealt with under the contract.
