Question: Why isn’t the strata company required to provide details of the 10 year maintenance plan or disclose known liabilities during the purchase process?
Under the Strata Title Act 1985, when purchasing a strata property the strata company is required to provide two documents, Section 110(1) and (2). These documents provide a good overview of the strata company and indicate the finances. However, is there a requirement to disclose the 10 year maintenance plan?
We recently purchased a strata property. The Section 110 documents indicated some fundraising for the 10 year plan. We requested the 10 year plan from the strata manager and were told to ask the vendor. The vendor said to ask the strata manager. The strata manager refused. When we settled and received the 10 year plan, it showed significant and costly maintenance was required. Additionally, we’re faced with significant costs associated with replacing an asbestos fence. Both the seller and strata management were aware of this before settlement.
Why doesn’t WA Law require the vendor to disclose known liabilities?
Answer: The Section 110 certificates are not designed to be used for due diligence!
Section 110 requires a strata management company to provide a certificate to the property seller so they can disclose very limited information about the apartment for sale.
Currently, the only information required under Section 110 relates to:
- levies due for the relevant lot/apartment (how much you pay),
- insurance for the building (basic compliance),
- information relating to the strata management contract (who to contact)
- and certain information about leases or exclusive use provisions (any specific rights).
Section 110 does not require disclosure of the financial accounts, meeting minutes, 10-year maintenance plan, defects reports or any other relevant documents held by the strata management company.
Why? We think it’s because the Section 110 certificates are not designed to be used for due diligence! They give the lawyer preparing the contract confirmation of a few core facts about the property for sale – and nothing more. In our view, it is impossible to gauge the status of the building from the limited information provided in this certificate.
However, there is a way to find more detailed information about the building, such as upcoming projects, financial position, 10-year maintenance plan, disputes, defects, annual reports, recent works, etc. You can arrange an inspection of the strata records under Section 107(1)(b) and Section 109 of the WA Strata legislation. There is a cost for this process.
We recommend anyone buying into a strata scheme arrange an inspection and receive a report covering a wide range of issues associated with the building or complex. Sellers can also arrange a strata report so that all potential buyers can benefit from this service more quickly and with less cost.
This post appears in the August 2024 edition of The WA Strata Magazine.
Michael Ferrier
EYEON Property Inspections
E: michael.ferrier@eyeon.com.au
P: 02 9260 5510
Hi .. I own a strata titled villa in in a group of 4 built in 1985 in Hamilton Hill
There is no strata body or strata scheme .
I want to render the front façade , do I need approval of the 3 other owners ?
Hi Greg
This article will assist: Question: What must be included in a lot owner’s renovation request submission for the next AGM?
I have shown the council strata manager the article on Personal Possessions of the strata written by Leary & Partners, namely washing machines and how they are financed in the 10 year plan. They just say we dont see it that way and that I need to get a lawyer to prove it. .Over time they have put a cost on using them and eventualy put the cost up and outsourced the running to a contractor.. There is no mention of additional costs above U/E when buying a unit. There is no bylaw about additional costs. Our U/E is weighted to cover all running and maintenance cost but they say I have to prove this.They know the legal costs are prohibitive and use this to disuade any issues instead of reading and listening and making correct decissions.
Hi William
Thank you for your comment.
Scott Bellerby from B Stratahas responded to your comment on this article: WA: Q&A Can one owner stop a senseless strata decision?
to Michael Ferrier- Eyeon Property Inspections
Re: $150.00 fee for Strata Information + gst- ” imposed by WA Parliament”
Michael- where did this come from ?? I am not aware of this is new Strata Reform Act ……..
10 Yr plans are only mandatory for lots of over 10 units or value > $ 5m – a very small % of total WA strata market.
It is now mandatory that a Sellers disclosure including Levies/planned Improvements/ 10 yr plan – if applicable and minutes of AGM’s and meetings- this is the responsibility of Selling Agent or Selling Party
Hi Andrew, Thanks for your comments. The costs for access to strata records by anyone authorised by an owner are set out in the regulations for the WA Strata Reform laws. The information required to be provided by sellers is very limited – most recent accounts, minutes of last AGM/EGM, current levies, amounts owed by the owner and by-laws. In my view this doesn’t provide a decent picture of what’s going on in the building. Our service will provide a more detailed report on what’s been happening in the building over the last 3-5 years. I think all buyers should be interested in this information. Michael.
Hi , I am the owner of a flat , the strata has asked me to remove my pot plants from my front door. I have had them there for 9 years and until now have never been asked to move them . My question is can the strata fine me …?as everyone got an email and it said in the email that bikes and pot plants and anything else on common property have to be removed or they would issue a fine , I have to wait until my husband comes home from working away as they are very heavy and I have no idea where I can move them too . Can the strata company fine me , thanks in advance
Even though the plants are heavy to move, someone could knock in to them and hurt their knee then sue all owners because it was on common property. Hence why the rule is in place. That is why we have bike corrals and the like. People are very litigious these days.
I love plants and they do make the building look great but you can understand the reason for the rule being in place. The rule being: that nothing is stored on common property.
Perhaps you can replant the plants in the front yard, along the driveway and still enjoy them. Planter boxes inside the house is another effective way. If you have time watch “WOMAN IN THE WINDOW” images starring Edward G Robinson. Excellent use of planter boxes in lounge-room.
What are the relevant forms I should give to the buyers?
Hi Marc
This article should help: Seller’s Duties of Disclosure under WA’s Strata Title Reforms
When buying a strata industrial unit , what am I buying and own that will be my responsibility to repair or replace,
eg do I own only the inside of the unit, ,the metal roof is that my responsibility if it leakes or a strata expence ,
Hi Mary
We have responded to your question in the above article as a Q&A.
Should the selling agent have disclosed the strata complex in which I have purchased an apartment, has defects for example, water egress in the roof & electrical faults for which I have had to pay a lump sum for three quarter strata fees
Hi Lyn
Thanks for your comment. We have received the following reply from Shane White, Strata Title Consult:
I can only refer to the Strata Titles General Regulations 1996 (STGR) which is at present the current Regulations until the amended Strata Titles Act (STA) is proclaimed.
The responsibility for Disclosure rests on the Vendor as required in the Form 28 Disclosure Statement.
With the sale of any strata property, a Form 28 is required to be given to the Purchaser.
This Form is provided to the Purchaser by the Vendor or through the Vendor’s Agent. At all times it is the Vendor who has the responsibility to disclose and not the Agent.
The Vendor is only bound to disclose the minimum amount of information as required by the Form 28.
Part 3 of the Form includes statements by the:
* Vendor that this information has been given.
* Purchaser acknowledgment that the information has been received.
* Statement by the selling Agent. (As per below)
Statement by selling agent
I, …………………………………………………..(name of agent),
of …………………………………………………..(name of firm),
as selling agent, hereby certify that the notifiable information for this property, as provided by the vendor, has been given to the prospective purchaser(s).
Selling agent’s signature …………………………………….
Date ……………………………….
It may be that the Vendor was not aware of any defect?
The Agent is only responsible for passing on the required information provided to them by the Vendor.
It always remains the Vendors responsibility to disclose the required information and any other additional information if so requested.
Hence, the recommendation that further information, comprising of requests for copies of the Notices of any AGM’s or EGM’s and the minutes may prove very helpful.
Section 43 of the STA permits the following:
43. Supply of information and certificates by strata company
(1) Upon application made in writing to a strata company by a proprietor or mortgagee of a lot, or by a person authorised in writing by such a proprietor or mortgagee, and on payment of the prescribed fee (if any), the strata company shall do such one or more of the following things as are required of it in the application —
The purchaser may ask for a wide range of documents and information that are not covered in the Form 28, (these are sometimes referred to as Purchaser Requisitions forming part of the Purchaser’s conditions on the Offer and Acceptance) such as “are there any current Applications before the State Administrative Tribunal (SAT) that have not been resolved or have been heard at the Tribunal in the last 24 months.
Are there any amounts of Levies outstanding or in arrears, although this should be found out when the Settlement Agent does a Sec. 43 enquiry so that any arrears can be adjusted at settlement.
I trust this gives you a greater insight into the responsibilities of an Agent and what the Purchaser may request to satisfy themselves.
You can view and download Form 28 here.