A small but significant number of our inspections have reported the strata committee is floating the idea of dissolving the strata plan and either selling the land and building to a developer or funding a redevelopment of the site themselves. Some unit owners do not want the uncertainty of a rebuild or a sale to a developer or do not want to invest more money as nothing is certain.  These unit owners want to sell.  If they sell early enough they are likely to get more for a sale than a sale to a developer.  When one of these units is listed for sale there is extensive evidence of intent, the selling agent promotes it as an opportunity to be part of a rebuild, investment, great opportunity, blah, blah, blah.  In these cases the unit is usually so poorly presented that it is obvious the building is in its final days and there is usually a representative who is keen to discuss the sale options with any prospective purchaser. But what if an apartment was being sold for $900K.  This building stands on a 25m cliff face. It has extensive water views and a lock up garage for every lot.  This apartment was well presented, showed no signs of a building typically needing re-development.  And, what if the selling agent was not aware of the discussions to sell to a developer and more importantly, at the very time the apartment was for sale the Council was debating whether they should issue a demolition order! A block of 4 apartments in Sydney. The strata building was self-managed i.e. no strata manager. There was only one building report in the records. This building report suggested the building needed minor works, routine maintenance, to correct a few minor issues.  Other than a payment of $3,000 to a Geotechnical engineering company found in the financials there was nothing on file that gave the slightest impression of the uncertain future this building faced.  Our inspector asked for a copy of the Geotechnical report as we were certain this report was critical to our inspection.  A vague deflection lead us to track down the report from the engineering company ourselves (without too much help from the committee) and that lead us to speak with Council. Complaints of rock falls had been made to the Council by the owners of the property below.  Council appointed a Geotechnical engineering company to inspect the cliff face and a huge amount of cliff face was deemed to be unstable and needed urgent works.  Council wanted the cliff face to be stabilised quickly or the building was to be demolished.  There had been no action by the committee to get this work done and no correspondence from Council was found on file. We were left extremely suspicious of the motivations of this committee.  This was not the action of a slack committee who innocently did not present all records at the inspection, this was a deliberate act to sanitise and conceal information and when our inspector asked questions the committee became uncooperative.  No quotes for repair were found on file. No correspondence between Council and the strata committee was found on file. With our report in hand our Client rescinded the contract without penalty.  Shortly afterwards the real estate agent withdrew and the property was removed from sale. The details of this inspection are factual. We are aware that there is a lot more to this than we were made privy to. We have changed a few details to ensure the building identity is not disclosed.  Report and all supporting documentation held on file. Buying a strata apartment?  A report is essential to be certain you are not getting less than you expect
© Purchasers Strata Inspections Pty Ltd 1976 - 2015
Unit for Sale As strata buildings become uneconomical to maintain, owners can decide to re-develop the site.  One option is to knock down the building and rebuild it.
Purchasers Strata Inspections Pty Ltd
Email psi@strata.com.au Phone 1300 363 774  Fax 1300 365 774
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