STRATA ROLL

Background
An owners corporation is required to keep a number of records. The “Strata Roll” is one of those records. The legislation requires the Strata Roll to contain details of such things as the original owners of lots, the current owners and mortgagees of lots, tenants and their real estate agents and the entitlements allocated to the various lots. The owners corporation or its strata managing agent must keep an up-to-date Strata Roll. In many cases the Strata Roll is not kept up-to-date. If the missing or outdated information does not affect the day to day administration of the scheme (e.g. residential tenancies or mortgages are not recorded) there is no need for a purchaser to be concerned. However, if the information does affect the day to day administration of the scheme (e.g. the name and address of the selling owner are not shown on the Strata Roll), then the purchaser should be concerned to ensure that the Strata Roll is updated as part of the conveyancing process. The purchaser’s solicitor or conveyancer will usually attend to this.

It is most important that the Strata Roll accurately records the name and address of the owner of a lot so that the owner will receive the various notices from the owners corporation (e.g. levy notices and meeting notices in particular).

Some reports do not deal with all of the following headings. Where this is the case it means that the Strata Roll was either incomplete as regards the material under the missing heading(s), or there were no entries under the heading(s).

Is there a Strata Roll?
This section reports on what was found on the day of the inspection. This is a simple YES/NO question. If the answer is “No”, then this needs to be followed up by the purchaser’s solicitor or conveyance because the total absence of a Strata Roll affects the validity of levies and general meetings, apart from having other practical implications on the day to day management of the scheme.

Owner?
The details of the Owner come directly from the Strata Roll. Usually if the person selling is residing in the lot, it is common to find that these details are correct. If the details are not correct, then the purchaser’s solicitor or conveyancer will need to check the title search to ensure that this is a problem with the Strata Roll and not an ownership problem. In New South Wales it is critical to have the correct owner shown on the Strata Roll because the usual (and easiest) way for the purchaser to get their name onto the roll is for the existing owner shown on the roll to provide a notice of change of ownership in accordance with the legislation. If the person selling is not the person shown on the roll, then they are unable to give the notice.

An “Agent” is a person authorized by the owner to act on the owner’s behalf and a “Nominee” is a person appointed to represent a company that is an owner.

Mortgagee?
If an owner mortgages the lot to a bank or other financier, the bank or financier (Mortgagee) may notify the owners corporation about the mortgage. Details of the notification appear on this part of the Strata Roll. These details need to be confirmed because when the lot is transferred the mortgage will usually be discharged and the mortgage must be removed from the roll. The appropriate notice will need to be served on the owners corporation for this purpose. The purchaser’s solicitor or conveyance will attend to this updating of the Roll as part of the conveyancing process.

If the Strata Roll shows that there is a “Mortgagee in Possession”, then this indicates that the owner has defaulted under the mortgage and the mortgagee has taken possession of the property, usually as a precursor to a mortgagee sale of the property. The purchaser’s solicitor or conveyancer should be aware of this because the contract of sale should show the mortgagee as the party selling the lot.

Other Entries?
This will describe any other entries that may appear on the Strata Roll, such as a transfer of mortgage or lease or the grant of a power of attorney. These entries (apart from those relating to a power of attorney) are not very common because the relevant notices are rarely given and bodies corporate rarely follow up on them.

Lessee?
The Strata Roll may record details of current Leases. If a lease is shown, the purchaser’s solicitor or conveyance will be concerned to ensure that vacant possession of the property is obtained on settlement, unless the sale is subject to the lease. If the purchaser is buying the lot as an investment and intends to lease the lot, it is strongly suggested that the purchaser give notice of the lease to the owners corporation once the tenant moves into the lot. This will allow the owners corporation to deal directly with the tenant if any problems arise and thus, at least to some extent, shield the owner from issues between the tenant and the owners corporation. In addition, failure to give the notice is an offence under the legislation and may lead to a prosecution.

Real Estate Agent?
This is part of the information required in relation to a tenancy. This is the real estate agent that is acting for the owner. Again, This will allow the owners corporation to deal directly with the tenant (or agent) if any problems arise.

Was the Roll in compliance with the requirements of Chapter 3, Part 5, Division 1?
These are YES/NO questions. The legislation sets out certain requirements, which are represented by the various questions. It is not uncommon for there to be an occasional “No” answer, although if a number of “No’s” appear this is an indication that this aspect of the management of the owners corporation’s affairs is not being efficiently handled. If the report shows other administrative issues, then the purchaser may be concerned about how efficiently the owners corporation is being managed overall.

Whether the combined inefficiencies are a matter for concern, or in a worst case, a matter entitling action under the contract (e.g. termination or a damages claim), is for discussion and resolution between the purchaser and their solicitor or conveyancer.