buying units due diligence

[RedApple]

Hi All,


I'm about to place an offer on a 38 year-old 2BR apartment. Is it as important to do building and pest inspection on apartments/units as it is when purchasing houses since there is already strata in place ?

Please advise what are the due diligence required when buying a unit to
ensure that there won't be any nasty surprises on the property's health
condition after the deal is done ?

Any inputs much appreciated.

 

[jingo]

Hi All,


I'm about to place an offer on a 38 years old 2BR unit. Is it as
important to do building and pest inspection on units
as it is when purchasing houses since there is already strata in place ?

Please advise what are the due diligence required when buying a unit to
ensure that there won't be any nasty surprises on the property's health
condition after the deal is done ?

Any inputs much appreciated.

Hi RedApple,

I'd go ahead and get both the building and pest inspection done. Also have a careful read of the latest meeting of the Body Corporate. In this, there will be details of any impending repairs etc. I saw one recently with over $50,000 in repairs to be undertaken to a block of units. There were only 6 on the block, so the owners would be up for a bit of money on this!

The other thing to check for is that each of the units has a separate water meter. It isn't uncommon to find that there is only one meter for the entire block. In this case the bill is split amongst the owners. This also means that you won't be able to pass the usage component of the bill onto the tenant.

Regards Jason.

 

[Doovalacky]

For something that age.
Roof condition, especially if flat.
Ceiling condition, a lot of the older ceilings start to sag and the plaster comes off the battens.

Electrical inspection. Especially if its going to be an IP you may have to add RCD protection etc.

 

[chilliblue]

Have a professional strata report undertaken and then read it.

It will inform you of any issues that the entire building has, whether there are any upcoming major expenses and whether there is enough money in placed aside.

It will also give you a fairly good idea on how the body corporate is run.

 

[Propertunity]

Hi Red,

Have a read of this thread, where same issue was discussed:
http://www.somersoft.com/forums/showthread.php?p=698253

All the best with the purchase.

 

[santaslayer]

The strata report should indicate any building defects or pest problems in the PAST. So might be worthwhile getting them both done.

 

[The Y-man]

Hi All,


I'm about to place an offer on a 38 years old 2BR unit. Is it as
important to do building and pest inspection on units
as it is when purchasing houses since there is already strata in place ?

Please advise what are the due diligence required when buying a unit to
ensure that there won't be any nasty surprises on the property's health
condition after the deal is done ?

Any inputs much appreciated.

HI RedApple,

Is that a "unit" in Melbourne speak (eg townhouse/villa type thing) or an "apartment" (which every other state seems to call "units")?

The Y-man

 

[RedApple]

Thanks Jason, haven't thought aboutt the common water meter issue before.

Also how do we access the latest strata\body corporate meeting ? I've asked the agent for this before and he says the minute is reviewed by the solicitor when doing strata search !

Hi RedApple,

I'd go ahead and get both the building and pest inspection done. Also have a careful read of the latest meeting of the Body Corporate. In this, there will be details of any impending repairs etc. I saw one recently with over $50,000 in repairs to be undertaken to a block of units. There were only 6 on the block, so the owners would be up for a bit of money on this!

The other thing to check for is that each of the units has a separate water meter. It isn't uncommon to find that there is only one meter for the entire block. In this case the bill is split amongst the owners. This also means that you won't be able to pass the usage component of the bill onto the tenant.

Regards Jason.

 

[RedApple]

Hi Doovalack,


What is RCD protection ? Is roof condition check still essential if the unit apartment is not on the top floor ?

Will definitely look into the ceiling condition check. Thanks

For something that age.
Roof condition, especially if flat.
Ceiling condition, a lot of the older ceilings start to sag and the plaster comes off the battens.

Electrical inspection. Especially if its going to be an IP you may have to add RCD protection etc.

 

[RedApple]

Hi chilliblue,

How can professional strata report be obtained ? Is it already available with the strata manager or can be done by a qualified trades person ?

Have a professional strata report undertaken and then read it.

It will inform you of any issues that the entire building has, whether there are any upcoming major expenses and whether there is enough money in placed aside.

It will also give you a fairly good idea on how the body corporate is run.

 

[RedApple]

Hi Y-man,

It's actually an "apartment" in Melbourne speak, but apparently is called unit according to the ads and agents .... I think it's what they call it in Sydney

The property is located in an inner Sydney suburb.

HI RedApple,

Is that a "unit" in Melbourne speak (eg townhouse/villa type thing) or an "apartment" (which every other state seems to call "units")?

The Y-man

 

[Doovalacky]

RCD otherwise known as "residual current device", "earth leakage protection" or in layman's terms a safety switch.

Not sure about other states but in WA they are a requirement for rentals.

The roof well still a minor concern in that age building depending on style. Some of the flat ones develop leaks and cost a lot to repair. Costs that the body corp have to cover somehow.

 

[chilliblue]

Hi chilliblue,

How can professional strata report be obtained ? Is it already available with the strata manager or can be done by a qualified trades person ?

Your solicitor can arrange it or look it up on yellowpages.com.au. Its not that expensive.

Best of luck.

 

[ashalim]

Definitely get a building inspection along with the strata report. Sometimes dodgy strata managers and/or owners don't report issues so you can't see it on the Strata Report.

I have a unit (sydney speak hehe) in a 7 year old building with a worn waterproof membrane. The repair quote goes up to $70k. From the looks of the pictures and contractor's descriptions it has been going on for sometime and yet does not show on ANY of the last 6 years of Strata GM.

$70k divided by 12 units = OUCH

 

[RedApple]

Chilliblue: thanks !!

Ashalim: sorry to hear that.... geeze a $5.8K repair bill sure sounds painful ...thanks 4 sharing the experience though ...hope the unit's cap growth has compensated for that expensive repair bill ..... It never crossed my mind that a building of 7 years could have such costly wear & tear ...

Thanks everyone for the very useful advises ... I got so much research to do ...

Definitely get a building inspection along with the strata report. Sometimes dodgy strata managers and/or owners don't report issues so you can't see it on the Strata Report.

I have a unit (sydney speak hehe) in a 7 year old building with a worn waterproof membrane. The repair quote goes up to $70k. From the looks of the pictures and contractor's descriptions it has been going on for sometime and yet does not show on ANY of the last 6 years of Strata GM.

$70k divided by 12 units = OUCH