Scary or Normal Building and Pest?
- Thread starter firstie
- Start date
Happy to look over it.
Yeah, if you want to flick it over to me, I'll have a look and make comments.
No need for the kudos or smiley faces though
I see these things every day of the week. So, by the way, will your solicitor. Have you asked him/her for their opinion?
Cheers.
No need for the kudos or smiley faces though
I see these things every day of the week. So, by the way, will your solicitor. Have you asked him/her for their opinion?
Cheers.
I suspect if I got a building and pest report on my PPOR, it would list pages and pages of problems. And none of them are really of much consequence.
OK firstie, for the benefit of the others reading this, I will post my comments here without identifying either the building or you
Strata report:
Harmony in the building - no disharmony (good)
Insurances in place (good). Building insured for more than the valuation (good).
Levies: Admin fund $625pq + Sinking $62.50pq = $687.50pq (OK but starting to get higher than the $620pq I would have expected).
Special levy of $12K was recently raised for roof repairs - good for you (not so great for existing owners, but this is what you have to do when you are a unit owner).
Cash: $24K in admin fund, nearly $5K in sinking fund = $29K all up shared between 7 units = $4K per unit = good. (as long as the $5K in the sinking fund is not after everyone has paid $12K for the special levy, which looking at the accounts, it is). But still, they have cash. Some BC reports I have read show 22 units and no cash at all in any account.
10 year plan on how to spend the sinking fund is not in place = bad, and they really should get on and do it.
No evidence of Fire Safety compliance = bad, and they really should get on and do it.
Pest & Building report:
They note roof repairs in the order of $15K required - the strata report says they have accepted a quote to do this (this is what the special levy was raised for) = all OK.
They say roof tiles may need replacing at cost of $100K - the roof tiles look OK to me from the photos they provided. It does need repointing on the ridge capping - simple to do.
It looks to me as though they will be needing to raise further special levies as time goes on, to fix:
Windows
Electrical - exposed wiring
Plumbing - old iron pipes
Front doors are not fire-rated
Railings are not up to building code
I can see from reading the reports why a novice may be scared off but really this is all pretty consistent with purchasing in a 75 year old building.
Depending on the price you are paying for the unit, and provided that you are prepared for ongoing repairs and maintenance required in a building of this age, then I see no problems with it, apart from:
1. The main road address (and traffic noise)
2. The fact that it is only a 1brm
- but this will all come back to the price you are prepared to pay
3. ....and I am not sure of the floor m2 area. Is it more than 50m2??
Ahhhh - I just looked it up. Rents for $420pw and costs under $400K - nice
Let us know how you get on.
Cheers, Alan
Strata report:
Harmony in the building - no disharmony (good)
Insurances in place (good). Building insured for more than the valuation (good).
Levies: Admin fund $625pq + Sinking $62.50pq = $687.50pq (OK but starting to get higher than the $620pq I would have expected).
Special levy of $12K was recently raised for roof repairs - good for you (not so great for existing owners, but this is what you have to do when you are a unit owner).
Cash: $24K in admin fund, nearly $5K in sinking fund = $29K all up shared between 7 units = $4K per unit = good. (as long as the $5K in the sinking fund is not after everyone has paid $12K for the special levy, which looking at the accounts, it is). But still, they have cash. Some BC reports I have read show 22 units and no cash at all in any account.
10 year plan on how to spend the sinking fund is not in place = bad, and they really should get on and do it.
No evidence of Fire Safety compliance = bad, and they really should get on and do it.
Pest & Building report:
They note roof repairs in the order of $15K required - the strata report says they have accepted a quote to do this (this is what the special levy was raised for) = all OK.
They say roof tiles may need replacing at cost of $100K - the roof tiles look OK to me from the photos they provided. It does need repointing on the ridge capping - simple to do.
It looks to me as though they will be needing to raise further special levies as time goes on, to fix:
Windows
Electrical - exposed wiring
Plumbing - old iron pipes
Front doors are not fire-rated
Railings are not up to building code
I can see from reading the reports why a novice may be scared off but really this is all pretty consistent with purchasing in a 75 year old building.
Depending on the price you are paying for the unit, and provided that you are prepared for ongoing repairs and maintenance required in a building of this age, then I see no problems with it, apart from:
1. The main road address (and traffic noise)
2. The fact that it is only a 1brm
- but this will all come back to the price you are prepared to pay
3. ....and I am not sure of the floor m2 area. Is it more than 50m2??
Ahhhh - I just looked it up. Rents for $420pw and costs under $400K - nice
Let us know how you get on.
Cheers, Alan
Last edited:
firstie, just doing a bit more research on this one, I note:
1. They tried to sell it last year in April, May & June.
2. Now they have been trying to sell it since July this year.
I'm pretty sure that the reason they've not been able to sell it has got less to do with the building report and more to do with the fact that:
1. It's on a main road
2. It's only 1brm
3. It has no car parking
4. It may be difficult to finance, if it is under 50m2
1. They tried to sell it last year in April, May & June.
2. Now they have been trying to sell it since July this year.
I'm pretty sure that the reason they've not been able to sell it has got less to do with the building report and more to do with the fact that:
1. It's on a main road
2. It's only 1brm
3. It has no car parking
4. It may be difficult to finance, if it is under 50m2
You cut out the pool of lenders who will look at it for sure. But if it has a car space/balcony then some lenders will do it.
Yeah I had to double check, but it says up to $100K depending on the type of roof tiles selected ........and it looks like a pretty standard 3 storey unit block.
........and it looks like a pretty standard 3 storey unit block.Admin fund looks way too high and sinking fund way to low. Are you sure they are the correct way around. Makes more sense if AF = $5K and SF = $24K
ADMIN FUND
Is for day to day expenses and should cover insurance, BC manager fees, and other annual costs. Having $24K in the admin fund is way over the top as annual charges shouldn't be more than $7K.
SINKING FUND
Is for repairs and maintenance and is woefully inadaquate at $5K for a 70 year old building. This means you are going to be hit repeatedly for one off special levies for any repairs that are required as the sinking fund is inadequate. For example if the roof repairs goes ahead at $100,000 each ower will have to pay approx $15,000.
ADMIN FUND
Is for day to day expenses and should cover insurance, BC manager fees, and other annual costs. Having $24K in the admin fund is way over the top as annual charges shouldn't be more than $7K.
SINKING FUND
Is for repairs and maintenance and is woefully inadaquate at $5K for a 70 year old building. This means you are going to be hit repeatedly for one off special levies for any repairs that are required as the sinking fund is inadequate. For example if the roof repairs goes ahead at $100,000 each ower will have to pay approx $15,000.
It's the admin fund that general maintenace comes from. The sinking fund is used to replace things that will last a long time - painting, fire doors, replacing concrete in driveway, guttering etc.
It's not unusual to see the admin fund way higher that the sinking fund - particularly if there has been sinking fund types of expenditures happening.
I know that in the blocks I am involved in we have upgraded the doors to fire doors. Installed emergency lighting. Installed linked smoke alarms. Replaced all the guttering. Painted the basement level car park and externals etc So unless you raise special levies to restore the sinking fund then it is going to deplete.
Personally I would much prefer if there is no or little money because then the Strata Manager can't simply fire off half cocked spending money on silly requests without coming back to the Executive. Also people tend to be much more involved and focused if you raise a special levy.
