Young strata and problems

We're currently in the cooling off period for a unit. We found out the strata is only three years old (on a 35 year old unit) and there's a problem that will cost about $50k to fix. Being a young strata, the money isn't there.

We're investigating further but I'm thinking going ahead is a bad idea. Thoughts?
 
We're currently in the cooling off period for a unit. We found out the strata is only three years old (on a 35 year old unit) and there's a problem that will cost about $50k to fix. Being a young strata, the money isn't there.
$50K cost shared between how many units in the SP?

We're investigating further but I'm thinking going ahead is a bad idea. Thoughts?
Bad idea IF there are only say 10 units in the complex. This is only $5K ea - and if you take that into account with your offer price, I don't see a problem.
 
Six units in the complex. If they put a levy on I'm thinking it will reduce the value of the unit a bit. Would they do that or ask for the money? It's something that needs fixing rather quickly I think.
 
If they put a levy on I'm thinking it will reduce the value of the unit a bit.

Why would it reduce the value? Having a building unsafe or damaged is likely to decrease the value. Performing repairs or maintenance will increase the value if anything. Unfortunately it will mean less money in everyone's pocket.

I'd ask for a discount from the vendor to cover the cost or threaten to pull out of the contract that's in cooling off. The vendor will be paying for it if the contract is cancelled and they loose the sale.
 
Hetty might have meant it should reduce the asking price.

Well done on uncovering that, Hetty. Lots of people buy flats and then a little way down the track get hit with a surprise Special Levy. Aren't strata reports great.
Any chance of negotiating a price reduction in light of the issue? If the deal stacks up in every other way I would proceed - with a discount. It will scare a lot of other people off. It may already scared people off and the agent will be keen to get it off his hands.
 
Yes, sorry, that's what I meant, asking cost.

We're getting an extension on the cooling off period to start with. Will they have to disclose this to other buyers if we pull out?

I think we should be able to negotiate.
 
Looking at the building report there's a hole in the roof and water is getting in, that's a strata issue as well isn't it?
 
...Will they have to disclose this to other buyers if we pull out?
This unit is not in Glebe down near the water is it? If it is the one I'm thinking of, that one of our clients was considering buying, run away and do not look back!

To answer your question, they only have to disclose if someone asks.

I think we should be able to negotiate.
That'd be the best option possibly.
 
No, not in Glebe.

There's also an issue with water coming up under the apartments and doing damage. Now I'm thinking it'll be better to back out, the builder said there's going to be lots of issues down the track.
 
No, not in Glebe.

There's also an issue with water coming up under the apartments and doing damage. Now I'm thinking it'll be better to back out, the builder said there's going to be lots of issues down the track.


This sounds like a unit block that has been in private hands for 30 something years and has recently been strata titled and sold off without the necessary maintenance being done. The vendor is attempting to shift poor/no maintenance being done for 30+ years onto 6 suckers........ahem, I mean property 'investors'.

The current boom market is ideal to dump dog properties onto, if that was your plan as a vendor.

In your position, I'd move on. There are other properties to buy that don't have these issues and won't be a black hole for cash over the coming years ahead.
 
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