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The critical strata checks Victorian buyers can’t make
Victorian buyers may enter strata purchases without access to the full information needed to make an informed decision, with a new analysis revealing major gaps in due diligence before contracts are signed.
An analysis by strata intelligence platform Cohabit found that Victorian buyers did not have all the information necessary to purchase an apartment or townhouse through their strata report.
The analysis examined the Victorian Owners Corporation Certificate, the disclosure document supplied inside the vendor’s section 32 statement and found that the strata report only provided three pieces of information against 14 in their interstate counterparts.
Cohabit found that the Victorian certificate delivered the most recent annual general meeting (AGM) minutes, the building’s insurance details, and current fund balances and levy amounts.
Cohabit strata expert, Dion Bonanno, said that while the remaining 11 categories exist, they are not required to be put in front of a buyer before they bid or sign.
“While preparing strata reports nationally, Victoria stands out for how little a buyer can learn about a building before they commit,” Bonanno said.
“In states like NSW, a purchaser can review years of owners corporation records well before exchange.
“In Victoria, access generally isn’t available until after a contract is signed, leaving pre-contract buyers with only an owners corporation certificate: a narrow snapshot of the last AGM, insurance and current finances, with little visibility of levy history, major works or disputes – of what you’re really buying into.”
According to the analysis, in Victoria nearly none of the building’s financial history was included in the certificate, leaving buyers without a clear picture of how costs have been tracked or whether budgets have been met.
Similarly, Cohabit said that arrears were only disclosed for the lot being sold, while the insurance figure gives no indication of whether it has been independently valued within the required five-year period.
It said the current report merely disclosed the building’s physical condition, with no maintenance plan, fund balance, engineering, or consultant reports, defect records, lift certificates or Annual Essential Safety Measures Report (AESMR) included.
On governance, Cohabit said the certificate gives buyers a snapshot rather than the full picture, with only the latest AGM minutes provided and no committee minutes, earlier AGMs or special general meetings, while contracts and legal proceedings are disclosed without the detail behind them.
“The consequences fall on the buyer after settlement,” Cohabit said.
“A special levy for defect rectification, a maintenance fund that cannot cover a lift replacement, or a sum insured set years ago and never revalued are all knowable before purchase and none of them are in the document buyers are actually handed.”
To provide more information to buyers, the cohabit strata reporting tool has been extended to Victoria.
Through the platform, buyers can now have access to all the information required to purchase, including the 11 extra categories included interstate, such as the building’s financial position, physical condition and compliance status, with a Building Health Score summarising the result.
Cohabit chief executive officer Thom Richards said Victoria’s legislation has been blocking buyers from completing due diligence prior to signing a contract.
“The process to purchase is stressful enough. Adding in the prospect of special levies, defects and management issues can turn an exciting purchase into a nightmare.
“Cohabit’s dataset has solved this, enabling buyers to undertake comprehensive due diligence with the assistance of an independent strata expert before they make any offers.”
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