Body corporate properties
Are you purchasing or looking into purchasing a property with a body corporate scheme?
If so, then you should get a report done to look at all the minutes and body corporate records in detail.
In theory you could do this yourself, but you could easily miss any key issues raised in the minutes.
Such a report can give you a clear picture of the scheme and give you the confidence to proceed with a purchase.
Sinking and admin funds
You want to be sure that the accounts are up to date and in good order, and that the administration fund and sinking fund are well capitalised. How much should be in the respective funds?
It depends on the size of the development in question, what work has been done lately, and what work might need to be done in the future. Ideally, there should be a reasonable buffer, because if not then there could be a levy raised to top up the funds.
You also want to look at budgets for the years ahead to make sure that no unexpected special levies are set to be raised.
And these are just the financial issues.
Other material issues
Within reason the minutes could show any number of issues that you hadn't considered.
For example, a developer might have proposed to build a tower block directly in front of your view!
Or there may be unruly tenants in the block, or overuse of Airbnb lettings.
And then there are fire safety inspections, structural reports, pest inspections, insurance, by-laws, and more. In short, you just want to know that you aren't buying a body corporate lemon.
If there has been a material issue, then it should be in the minutes somewhere.
A comprehensive purchaser's report might cost a couple of hundred dollars plus GST.
But it could be the most valuable money you ever spend if it picks up a major problem with the scheme.
You could request that a solicitor reviews the records for you, but this is likely to be expensive.
You may well prefer to use a specialist company to run a report for you.
To find out more about the steps in the purchase process, download our free e-book here.