Question 1

Is the property actually in a strata scheme?

Accepted Answer

Not every unit is strata titled. You can check the title and buy a copy of the strata plan through the Land Information System Tasmania at thelist.tas.gov.au, which is free to register for. Your conveyancer will normally do this, but if you are at the inspection stage and want to know what you are looking at, you can find out yourself in a few minutes.

Question 2

What will I own, and what is common property?

Accepted Answer

The registered strata plan defines the boundary of your lot. Everything outside it that is part of the scheme is common property, and it is the body corporate's responsibility, funded by all owners. The boundary is not always where people assume: balconies, courtyards, car spaces, external walls, windows and the roof are the usual points of confusion, and they vary between schemes. Read the plan rather than relying on what the agent believes.

Question 3

What records should I ask for before buying?

Accepted Answer

Ask for the last two or three years of minutes, including any special general meetings; the current budget and financial statements; the certificate of currency for the building insurance; the levy schedule for your lot; a statement of any arrears attaching to the lot; the by-laws, if the scheme has registered its own; and the balance of the sinking fund. A well run scheme produces all of that quickly. A scheme that cannot produce it is telling you something.

Question 4

Is the building properly insured?

Accepted Answer

Ask for the certificate of currency and check two things: that the policy is current, and when the sum insured was last set by a professional valuation rather than by adding a percentage to last year. Underinsurance is the failure that turns a fire or a storm into a special levy on every owner. Over insurance is less dangerous but you are paying for it in your levies every year.

Question 5

What levies will I pay, and is anything owed on the lot?

Accepted Answer

Get the current levy figure for your specific lot rather than a scheme average, because unit entitlements mean lots differ. Then ask separately whether there are arrears on the lot, and whether any special levy has been struck or discussed. Unpaid levies generally attach to the lot rather than to the seller, so an amount left unpaid can become yours. This is a question for your conveyancer to put formally, not a conversation at the open home.

Question 6

Is there money set aside for major works?

Accepted Answer

Look at the sinking fund balance next to the age and type of the building. A thirty year old block with a modest balance and an original roof is telling you that a large bill exists and has not been funded yet. Low levies are attractive until you understand that in some schemes they are low precisely because the scheme is not putting anything aside, and the shortfall arrives as a special levy with a due date.

Question 7

What do the minutes tell you?

Accepted Answer

More than anything else on this list. Minutes show whether the scheme meets, whether decisions get made, whether there is an unresolved defect or water ingress problem, whether major works are being discussed, and whether the owners are in dispute with each other or with a builder. Recurring items that never reach a resolution are the pattern to watch for. Two hours reading minutes is the best value in the entire purchase.

Question 8

What do the by-laws say about pets, parking and short stay letting?

Accepted Answer

If the scheme has registered its own by-laws they govern; otherwise the model by-laws in the Strata Titles Act 1998 apply. Check specifically for pets, which under the model by-laws need body corporate approval, visitor and allocated parking, whether short stay letting is restricted, and any rules on renovations and floor coverings. Buyers most often come unstuck on pets and on short stay letting, because both are commonly assumed to be permitted.

Question 9

What if the body corporate has never met?

Accepted Answer

This is common in small two and three lot schemes in Tasmania, and it is the issue we are asked about most. A dormant body corporate has no funds, no records and often no insurance, but it still exists and the obligations still apply. It becomes a problem at the point of sale, when a purchaser or a lender asks for records that were never kept, and it becomes an expensive problem if there is a fire in an uninsured building. A dormant scheme can be brought back into order, and it is far easier to do before a sale than during one.

Question 10

Who do I ask if the answers do not add up?

Accepted Answer

Your conveyancer for anything touching the contract and the title, your accountant for the tax treatment, and the scheme's strata manager for the records and the numbers. If the scheme has no manager and no records, that is itself the answer to several of the questions above.

Buying into a Tasmanian Strata Scheme

What to check before you buy into a Tasmanian strata scheme