Before signing a contract for the purchase of a home unit that is on a strata or community title, a person should make sure they understand the operations and finances of the strata corporation. On application by an owner or prospective buyer, a corporation must provide information on the following:
- How much money must be paid for the upkeep, maintenance and management of the common areas, including arrears owing on the unit being purchased.
- Assets and liabilities of the corporation.
- Details of any expenses incurred or about to be incurred by the corporation, such as painting or gutter replacement.
- Copies of minutes of general meetings and management committee meetings for the last two years.
- Statements of accounts and financial records of the corporation.
- Articles or by-laws of the corporation currently in force.
- Current insurance policies.
The corporation may charge a fee for providing copies of this information.
Before you buy a unit or lot, ask yourself these questions
Have I sought independent advice on the documents relating to the corporation?
What system does the corporation have for resolving disputes?
What are the rules about having other people visiting and parking?
Are there any unpaid contributions owing on my unit or lot?
How do the contributions and other charges compare with other corporations?
Is there a ‘sinking fund’ or reserve of money held by the corporation for emergency expenses and major maintenance costs such as painting?
Will the unit, building or site be accessible if I am disabled and require a wheelchair or walking aid? If not, can suitable modifications be made easily?
What maintenance services are provided? What are the charges for these?
What are the restrictions on the use of my unit/lot and the common property?
Can I store my caravan/boat/bicycle?
Are pets permitted?
Is the corporation planning any major expenditure that I may be asked to contribute to?
Are there any structural problems in the building?
Have I seen a copy of the plan that defines my unit or lot? Do the boundaries of the unit/lot agree with boundaries shown on the plan?
If a community scheme, what level of the scheme am I buying into? Is it a primary, secondary or tertiary scheme?
For further detailed information about strata titles, including changes to the Strata Titles Act that commenced in 2013, is available here. Additional information about community titles is found here.
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.