Strata Records Inspection Reports

In Ontario, a buyer, their agent or anyone at all, has the right to inspect a Status Certificate with the payment of a fee that cannot exceed $100.

It is common for the buyer to ask for a Status Certificate and the buyer's real estate lawyer may give it a quick look-over but aside from that, I have never heard of a buyer, or a buyer's agent, requesting to examine the corporation's records although common sense says that it is the prudent thing to do.

Why is it not done? I can think of a few reasons:
1. No one suggests that the buyer do so.
2. The buyers don't know what to ask for.
3. The buyers are unable to understand the records.

Section 76 of the Ontario Condominium Act lists the documents that make up the Status Certificate.

It appears that Australian strata acts call for far more disclosure that Ontario does and that companies have been formed to assist owners examine the condos' documentation and give an informed opinion on what they contain.
—editor CondoMadness

If you are crazy enough to do your own Strata Records Inspection Report here are some tips
LookUpStrata
Paul Mulligan
25 October 2015

Paul Mulligan, Founder and Licensed Real Estate Agency of Find Our Home provides detailed step-by-step instructions on how to carry out your own strata records inspection report.

If you are crazy enough to do your own Strata Inspection here are some tips on searching the records. We have listed a number of things to look out for, however a Licensed Real Estate Agent [or lawyer] who has the experience to carry out the report should know when the alarm bells are ringing!

A Strata Inspection Report is generally carried out by an experienced person who should at least have the minimum qualifications of a Real Estate Agent. Most Strata Inspection Companies hold no real estate experience and generally are contracted by companies who have not worked in the Real Estate Industry. Sounds crazy but it’s true!

First things First
You will need to obtain a Letter of Authority from the seller or their solicitor, most Strata Management companies [property managers] will require this before they will allow you to inspect the records.

Contact the Strata Managing Agent and book in a suitable time. They will generally ask if you are from an inspection company or if you are a prospective purchaser. You will need to provide the Strata Plan Number and Lot Number. This information is on the Contract of Sale.

The fee that you will be required to pay is currently $34.10 per hour (pro rata) you will also be charged additional costs to take photocopies. We recommend you take along a scanner or download a scanning app to your phone. We use tiny scan. You will also need a notepad or laptop to make notes.

When you arrive at the strata manager’s office you will be either provided with a computer or paper files. The initial documents that will be provided are:
•
 The Balance Sheet which details how much funds are in the sinking and administrative funds (make sure this balances);
•
 An income and expenditure statement for the current period detailing recent expenditures;
•
 A Lot levy notice (the levies that relate to the subject Lot). This will detail the current levies and where they are paid to;
•
 A Strata Roll (this will detail the current and past owners, the entitlements for the lot and other information.

What’s Next?
It depends on whether the files are paper records or computerised! We are going to talk about paper records in this article, as to explain inspecting records with electronic filing system in a new kettle of fish.
•
 Look for compliance documents such as Annual Fire Safety Statement (if the building does not comply this could be very costly)
•
 Is there a Work Health & Safety Report?
•
 Is there an Asbestos Management Report?

Is there a Sinking Fund Forecast Report? (this report will give you an indication of what the levies should be over a number of years). Are the levies set within this document?

Is there a WorkCover Certificate for the lifts?


Is there a compliance certificate for the swimming pool/s?

Is there a legal file? Are there any current legal matters?

Is their disharmony within the building?

Has the building been issued any notices to comply from Council [municipal fire or building inspectors] ?

Is there a quotes folder? Is there any major proposed expenditure in the quotes folder?

Is there a quotes folder? Is there any major proposed expenditure in the quotes folder?

Are there any by-laws?

Is there a current valuation? Has this been done in the last five years?
Is there current building insurance? Is this equal or greater than the current valuation?

Are there any defect reports? Have the defect issues been resolved? (defects can run into $10,000’s or $100,000’s of dollars).

Ensure that you flick through every file that is provided to you! Look out for anything that might raise alarm bells. Remember also there may be files that have not been provided! Do you know what to ask for if there are files missing?

The Meeting Minute Book
The Minute Books should paint a picture of what is happening within the Strata Scheme [condo corporation].
•
 Are there any proposed or current special levies?
•
 Is there a Notice of a Meeting that has not been held? (read the agenda and look for any items on the agenda carefully).
•
 Are there financial statements (income and expenditure) for the past 3 years?
•
 Is there any major work proposed in the Minutes?
•
 Are there any items noting quotes for major expenditure?
•
 What were the annual levies for the current year compared to the past 3 years (this will give you an indication of where the levies are positioned).
•
 Have there been a deficit in the Income & Expenditure Statements over the past 3-5 years? (this generally indicates the levies are too low or that unplanned expenditure has occurred).
•
 Is there an Executive Committee?
•
 Are there any notes regarding compliance that could be costly?
•
 Is the Minute Book in good order?

Decide very carefully about your due diligence for the sake of a few hundred dollars you can obtain a professional report that could save you buying a unit within a Strata Scheme that has many problems, it is very difficult to sell a property with major ongoing problems and this may be the reason the property is being sold.

What is a Strata Inspection Report?
LookUpStrata
19 June 2014

This article has been supplied and written by Paul Mulligan, Find Our Home.

A strata inspection report (also known as a strata search, Owners Corporation Records Inspection or Section 108) is a report that all purchasers of a strata titled, community titled or company titled property should invest in whether this be a residential or commercial property.

The Strata Inspection Report I refer to is similar to a building report when someone buys a house.

The records of the Owners Corporation must comply with the Strata Schemes Management Act. By no means do we suggest that this replaces a building inspection report. The big difference is a Strata Inspection Report will report on the building, also known as the Strata Scheme. It should provide precise details of what is happening within the building or complex. Things such as:
•
 Who is the current owner?
•
 What are the quarterly levies for the property? [monthly in Canada]
•
 What are your voting rights? What is your unit entitlement?
•
 When are the levies paid to?
•
 Have there been? Are there any current or proposed Special Levies (additional contributions outside your quarterly levies that may be raised for building defects or major works)?
•
 Does the Strata Scheme comply with Fire Requirements, Work Health & Safety Obligations and Asbestos Management?
•
 Is there any information in the records approving animals? Are animals permitted?
•
 How much is in the sinking fund and Administrative Fund? Are any of the funds in deficit?  [Reserves & Operating funds]
•
 Are there any current legal matters? Have there been any legal matters in the past three years?
•
 Building Defects or Home Owner Warranty Claims for Defects;
•
 Breaches of By-Laws (Rules and Regulations for this building);
•
 Is there any disharmony?
•
 Major Income and Expenditure over the past 3 years;
•
 Proposed Major Expenditure;
•
 What is the current value of the building?
•
 Is the building insured and if so adequately insured? (details of the insurance and cover);
•
 Are there any compliance related matters within the records such as window and balcony compliance?
•
 Is there a Sinking Fund Forecast? (a report prepared detailing what the levy contributions should be over the next 10-15 years including detailed maintenance);
•
 Are there any known disputes within the Strata Scheme;
•
 Copies of Annual General Meeting Minutes, Extraordinary General Meeting Minutes and Executive Committee Meeting Minutes;
•
 Copies of building reports, extracts from compliance reports.
Every buyer considering the purchase of a strata titled property, whether it be Residential or Commercial, must engage the services of a fully qualified inspection company with an extensive property background.

Before engaging a Company to conduct and inspection of the Owners Corporation Records make sure you ask the company what property background their inspectors have. Many inspection companies use contractors who have very little or no property background, such as university students or stay at home Mum’s and Dad’s.

About the Author: Paul Mulligan is a Licensed Real Estate Agent and has been in the Real Estate Industry since 1996. Paul is the CEO & Founder of Find Our Home, a property based company that provides expert Strata Inspection Reports, buyer agencies services and helps property sellers select their real estate agent.

Comments
nikki (admin) says
July 1, 2014 at 12:23 pm

I have just received this comment via the sites comment form from Jeanette Anderson, Strata Data WA:

I am constantly amazed that people go to so much trouble when spending $25K (or less) on a a new vehicle to inquire about the “Bells and Whistles” however when spending 100’s of $1,000’s on a strata investment do not do basic research about the strata corporation they will be investing in.

In Western Australia (WA), the information provided by the agent on the Form 28 & 29 only covers information pertaining to the lot [unit]. It does not included information of what is happening within the building complex. Only a search of the strata company records will give a Purchaser a “feel” for the culture of the strata company they will be investing in. Savvy Purchaser’s are looking at the decisions made by the strata corporation/COO and how those decisions will impact on their lifestyle/investment.

J Anderson
Strata Date (WA)

Paul Mulligan says
July 1, 2014 at 3:24 pm

I agree with Jeanette a Strata Inspection Report will generally give a prospective purchaser more information than a building report. It is a full history of the building since the Strata Scheme was established.

One of the latest stories I have been advised of is a young man purchasing a property on the Northern Beaches of Sydney. The property had a Fire Order from Council which rectification costs can run into $100,000’s. The disappointing part of this story is the Real Estate Agent who sold him the property resided in the building as an owner and did not disclose this.

For the sake of a few hundred dollars I recommend any prospective purchaser in Australia seek the services of a qualified Strata Records Inspector in their respective State. It could be the saving grace of huge headache.

Watered down issues in strata files can catch out unsuspecting buyers
LookUpStrata
By: Paula Byrnes
28 September 2015

This article concerning what strata inspectors find when conducting a strata report has been supplied by Paula Byrnes, Metropolitan Strata Reports.

I did an inspection last week where there was an issue that I didn’t pick up until I was summarising the minutes back at my desk: simply because the wording used in the minutes had been watered down.

The minutes (for several past years) referred to an ongoing issue as “dampness” … when really the term “water penetration or water ingress should have been used … which gets my attention every time … the word “defects” has me on the edge of my seat!

So when my next job came in and the buyer told me; “call me straight away if anything jumps out at you” I thought; do you mean like a 1.5 million special levy in a block [building] of 30 units or that the owners corporation are having formal discussions about selling the building to a developer … or do you mean a few occurrences of the word “dampness”?

My actual response to this buyer included an old analogy … “sometimes you can’t see the woods for the trees” (hence the reason I summarise the minutes).

I have come across all these issues in recent weeks and the bottom line on the “dampness” issue is that it will lead to very expensive remedial works.

It’s important that your strata report [status certificate] has a list of matters that have been summarised from the minutes and any important letters or reports that are on file. This shows you that the Strata Inspector is paying attention.

It’s also a good idea to ask if the Strata Inspector who’s inspecting the records, if they understand the impact that issues to do with plumbing or roofing can have … because watered down issues (pardon the pun) in a strata building can easily go unnoticed if the person doing the inspection has no strata experience.

For more information on matters such as what strata inspectors find when conducting a strata report or information about purchasing strata, visit our

FactSheet: Strata Plan & Strata Inspection Report
and/or
FactSheet: Renting / Selling / Buying Strata

Can Owners Corporations really hide files to cover up serious issues in the building?
LookUpStrata
04 October 2015

This article concerning what can be uncovered in a strata records inspection has been supplied by Paula Byrnes, Metropolitan Strata Reports.

I did an inspection of an apartment building on the Northern Beaches. Looking at it from the outside, it can only be described as bespoke and luxurious … ah, but never judge a book by its cover!!

several minute books were missing

The owners ran the block like they were running BHP so needless to say there were volumes and volumes of records to wade through – all in the space of an allocated 1.5 hours. Lucky the records were hard copy because it was easier to detect that several minute books were missing.

The current strata managers said that the old managers didn’t hand them on. The old managers proved that the new managers signed for the missing minute books. The new manager finally told us that the Secretary had the missing minute books. I later realised that other critical reports and documents were also missing from the files.

A week later, the missing minute books were available to inspect back at the strata managers office. It became obvious why these books had gone ‘underground’.

The words “Resolved that the Secretary will hold the minute books … ” jumped out at me … this means that the owners had decided to collect the minute books from the strata managers office and keep them at an inaccessible location. This resolution was in one of the missing minute books.

serious water penetration

I went through the missing minute books and found several resolutions defeating motions to take the recommendations of a qualified engineer to address serious water penetration – a result of building defects that were identified in the first few years.

Thanks to one owner taking control of the issue, the owners went from one band-aid approach to the next as the issues got worse.

I empathise with owners who are faced with the prospect of raising a huge special levy however the owners corporation has an obligation to maintain the building and mitigate further financial loss … which begs the question, can a new owner avoid paying a future special levy if he/she can prove the owners corporation didn’t carry out identified repairs, thus allowing the building to dilapidate?

On this occasion, it was the vendor (owner) who commissioned the report for an auction campaign … and several buyers who were given a copy called to ask me “how bad is it?”

I don’t think anyone can answer that question until there are comparable tenders at hand from qualified remedial builders.

A strata report should either provide copies of the past five years of AGMs or show the levies raised each year at the AGM for the past five years … which is really good to know as it will give you an idea about the financial history and whether the owners corporation have raised sufficient funds each year and whether or not they have followed a Sinking Fund Plan. The other upshot is that it tells you that the person conducting the inspection has sighted all the minutes and not just the ones that have been presented.

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