Sloppy strata!

[Jacque]

Hi all- hoping someone with more experience can help me out here....

Am in the process of purchasing a 2 bed unit in a block of four in a coastal town. Block is structurally sound so no problems there. I got my solicitor to do a strata search and he found the following that needs attention:

1. There is no professional management company for the strata as one of the owners is doing it, and has been for some time. Trouble is there hasn't been a recorded AGM held since 1999 and the funds in the bank ($3K) seem low. Her minutes are all handwritten and not terribly specific.

2. The last valuation on the block seems to have been done in 1997! I was under the impression that valuations had to be done every year for insurance purposes- isn't this the responsibility of the manager?

3. There also appears to be no Workers Compensation on the place. Is this a huge concern? Surely most licensed tradesmen have their own wc?

I will be looking into this further when I actually get the report but for now, I'd appreciate any advice by those more experienced in strata and all its intricacies.

Also, where would I find the details of the other owners (so that I can contact them) if not on the strata notes?

Thanks in advance,

 

[Jas]

Hey Jacque,

Originally posted by Jacque

1. There is no professional management company for the strata as one of the owners is doing it, and has been for some time. Trouble is there hasn't been a recorded AGM held since 1999 and the funds in the bank ($3K) seem low. Her minutes are all handwritten and not terribly specific.

There does need to be an annual AGM. The reason why there might only be 3K in the bank (aside from the nasty idea of fraud/embezzlement) is that no one has done a budget to show at the AGM. So, no increase in rates, no increase in the bank balance for the big items. That's ok if nothing ever needs repairs...

2. The last valuation on the block seems to have been done in 1997! I was under the impression that valuations had to be done every year for insurance purposes- isn't this the responsibility of the manager?

Every 5 years is the minumun. But with building costs skyrocketing, every year (or every other year) might be better until things calm down again.

3. There also appears to be no Workers Compensation on the place. Is this a huge concern? Surely most licensed tradesmen have their own wc?

Yeah, they are supposed to. The word there is 'supposed'. Think of what would happen if they didn't and they sue...

More policies included this one cheap, so throwing it in shouldn't cost much.

Also, where would I find the details of the other owners (so that I can contact them) if not on the strata notes?

Title search through the council. Ask the woman who manages.

Feels like this woman has been doing her own thing and everyone is uncaring/happy with the situation. Jumping in and making changes will be hard work...

Not sure I'd do it. Plenty of other places out there without these hassles.

Jas

 

[handyandy]

Hi Jacque

3k in the bank isn't to bad as at least their not spending all the levy money plus some.

You say there appears to be no problems with the building so from that it does sound like the building is being maintained adequetly.

The self managing of the strata can be very good as the woman doing it is on site (I assume) so will be right on top of things and personally involved. The draw back will be that things aren't done by the book but as long as the insurance cover is adequet and as Jas mentioned the WC is included, no a worry.

Have you tried to speak to the woman who is managing he strata? She may give you all the info you require verbally and you can also guage whether you can 'work' with her or simply leave it up to her to continue running the joint.

All up as long as there are no glaring oversights I don't see it as a real issue.

Cheers

 

[dcarr]

this can work

I've seen a similar situation with a relative's property (that I may buy from them next year). One old gentleman down the road owns three of the five units. Years ago he got sick of the strata, took the matter to court and got the lot converted to torrens title. Now he does all the lawns etc for a cash pittance from the other 2 owners, and any common repairs that come up are agreed amicably. Very benovolent, never abuses his majority position of power.

So a system like this can work, but you really need to talk to all the owners and get a feel for the way things run. Why is the place being sold? Perhaps the current owner got fed up with the way it was run? Try to find out!

-DC-

 

[abcdiamond]

Hi Jacque

Handyandy said : Have you tried to speak to the woman who is managing the strata? She may give you all the info you require verbally and you can also guage whether you can 'work' with her or simply leave it up to her to continue running the joint

I think that is your best first move. You will get a reaction that may help to decide whether to continue with this purchase or not.

Good luck