You are buying the lot — and every decision already made.
A strata report is an inspection of the owners corporation’s records: the minutes, the levies, the funds, the insurance and the by-laws. It tells you how the building has been run and what the other owners have already committed you to.
In short
- A strata report is a records inspection, not a building inspection. It tells you how the scheme has been run and what the owners have decided, not whether the concrete is sound.
- The capital works fund is the number to test against known defects. Work that is not funded arrives later as a special levy, payable by whoever owns the lot when it is struck.
- Repeated adjournments of a repair decision, litigation on foot, high arrears and unapproved works by other owners are the patterns worth stopping for.
- By-laws bind you from settlement. Pets, short-term letting and renovation approvals are the three that most often change what a lot is worth to a buyer.
- Order the report before exchange. A purchaser has no standalone right to inspect the records, so the authority comes from the contract, and after exchange the result is yours either way.
A strata report — more precisely, an inspection of the owners corporation’s records — is someone reading the building’s books on your behalf and writing down what is in them. It is not a building inspection. It tells you how the scheme has been run, what it costs to run, what has already gone wrong, and what the other owners decided to do about it.
That last part is the value. You are not only buying a lot; you are joining a body of owners who vote on money, and inheriting every decision they have already made. What follows describes how the inspection works, not advice on any particular contract.
Who has the right to look
Section 182 of the Strata Schemes Management Act 2015 (NSW) gives the right to inspect the records to an owner, a mortgagee or covenant chargee, or a person authorised by one of them, on payment of the prescribed fee. A purchaser is not on that list. The standard contract for the sale of a strata lot deals with this by including a term under which the vendor authorises the purchaser to make the inspection — another reason to have the contract before you book anything.
Separately, a section 184 certificate can be obtained from the owners corporation and gives a snapshot of contributions, arrears and certain other matters as at its date. It is a summary rather than the history, but it comes from the owners corporation itself and carries evidentiary weight the report does not.
What the records contain
- Minutes of general meetings and of the strata committee, usually several years back. This is where defects, disputes and money problems first appear in writing.
- Levies — the contributions for the lot you are buying, the payment history, and the arrears across the scheme.
- The administrative fund and the capital works fund, and the plan of anticipated major expenditure the Act requires the owners corporation to prepare and keep under review. It is a long-range plan, not a one-year budget; its absence, or its age, tells you something.
- Insurance — the policy, the sum insured, when it was last valued, and whether the excesses or exclusions suggest a claims history.
- Registered by-laws, including any added since registration of the strata plan. Adding or changing one takes a special resolution, so each addition records something the scheme mustered the numbers for.
- Correspondence and orders — defect reports, notices from council or Fair Trading, NCAT applications, and anything from a lawyer.
The warning signs
| What you see in the records | What it may mean |
|---|---|
| A thin capital works fund alongside known defects or ageing common property | The work still has to be paid for. What is not in the fund arrives as a special levy, and you will own the lot when it is struck. |
| The same repair item adjourned meeting after meeting | An owners corporation that cannot agree. The defect is not going away, and fixing it later is rarely cheaper. |
| Litigation or NCAT proceedings on foot | Legal costs, an uncertain outcome, and sometimes a problem the minutes describe only obliquely. |
| Unapproved works by other owners | Alterations to common property made without a by-law or resolution. Enforcement, rectification and the argument about who pays land on the current owners. |
| A special levy struck, foreshadowed, or “to be considered” | Ask when it falls due and who is liable for each instalment. That is an adjustment question, and it needs answering before exchange. |
| High arrears across the scheme | Budgeted work does not get done, and the owners who do pay carry it. |
The by-laws are the rules you are buying into
By-laws bind the owners corporation, the owners and occupiers of a lot. Three sets matter to most purchasers.
- Animals. The Act has been amended so that a by-law cannot simply ban the keeping of an animal, and an owners corporation cannot unreasonably prohibit one — but conditions can still be imposed, and older schemes often have registered by-laws that never caught up. If the pet is not negotiable, read the by-law and check what has been approved for other lots.
- Short-term letting. The Act allows a scheme to adopt a by-law preventing a lot being used for short-term rental accommodation where the lot is not the principal place of residence of the person granting the right to occupy. If you plan to let by the night, check the by-laws and the planning rules before you commit.
- Renovations. The Act sorts work into tiers: cosmetic work you may generally do without approval, minor renovations requiring the owners corporation’s approval, and structural or common-property work, which needs a by-law passed by special resolution. Waterproofing and structural change sit outside the minor renovations tier, so a bathroom is rarely the simple case. If the purchase only makes sense after a renovation, price in the approval, not just the builder.
A defect history in the minutes is worth more than the building’s age. A well-run 1970s block with a funded capital works plan and a documented repair programme is a better proposition than a five-year-old tower where the minutes record water ingress, a consultant’s report and no decision. New buildings have their own statutory protections — the strata building bond scheme for new residential strata work, the duty of care under the Design and Building Practitioners Act 2020 (NSW), and the statutory warranties implied by the Home Building Act 1989 (NSW), which run for different periods depending on whether a defect is a major defect. Each of those is time-limited, and the clock started before you arrived, so the useful question is what date it started.
Why the report is ordered before exchange
Because after exchange, the answer is yours. On a private treaty sale the cooling-off position is set out in the statement in the front of the contract, and rescinding during that period is not free. A sale by public auction is treated differently again, the position can be brought to an end early by a section 66W certificate given on the purchaser's behalf, and an off-the-plan contract runs on its own footing — which matters here more than most. Check the statement in your own contract rather than assuming.
The records inspection, the building and pest reports and the contract review all belong in the same window — before the contract is signed and dated. Our purchase page sets out how that sequence runs, and on a purchase we act for you and for one side of the transaction only.
Bring us the report rather than the summary page. What matters is usually one sentence in minutes two years old, and rarely the sentence the front page highlights.
Questions purchasers ask us about strata.
Is a strata report the same as a building inspection?
No. A strata report is an inspection of the owners corporation’s records — minutes, levies, funds, insurance, by-laws and correspondence. A building inspection is a physical examination of the property. They answer different questions, and on a strata purchase you generally want both: the records tell you what the scheme knows about its own defects, and the inspection tells you what is in front of you today.
Can I order the strata report after exchange?
You can, but by then the information cannot do much for you. After exchange the price, the property and the completion date are fixed, and depending on how the sale happened there may be no cooling-off position left to rely on. The records inspection belongs in the same window as the contract review and the building and pest reports — before the contract is signed and dated.
A special levy has been foreshadowed. Who pays it?
It depends on when the levy is struck, when each instalment falls due, and what the contract says about adjustments. A levy already struck before completion is treated differently from one merely discussed at a meeting. Tell us what the minutes record and on what date, and send the contract with them, because the answer usually sits in the interaction between the two.
How far back should the minutes go?
Far enough to see whether a problem was raised, discussed, costed and then resolved — or raised, discussed and quietly dropped. Several years of general meeting and committee minutes is the usual scope. Age alone tells you little: what matters is whether the scheme identifies defects, obtains reports, makes decisions and funds them, or repeatedly defers.
Tell us what's happened.
Send us the contract and the full strata report before you sign anything, and we’ll go through what the minutes actually record and what it means for the purchase.
Information on this site is general in nature and is not legal advice, and may have been overtaken by a change in the law. Contacting us does not create a solicitor–client relationship.