Homebuyers hit with massive fee rise
Inspection of strata records is crucial to enable prospective owners to glean information about the scheme before they buy their apartment.
However from July 1 these inspection fees are almost doubling in price. Amid huge affordability issues, no reason has been given for the outrageous increase, albeit the first in nine years.
It is all the more of an odd decision by Anoulack Chanthivong, the Better Regulation and Fair Trading Minister, given structural, waterproofing and fire safety defects wreak havoc across as much as half of NSW's strata buildings.
Transparency, accountability and increased engagement are vital to ensure home buyers don't naively buy into a strata nightmare.
The fees for inspecting strata records online or in person will increase from $31 to $60 for the first hour, and from $16 to $30 for each half-hour after the first hour.
The increase will apply to prospective buyers of apartments, townhouses and villas. Fees will stay the same for current owners.
It is strata managers under the watch of the strata committee who are responsible for making and keeping all the records. They must keep all financial records and statements for at least seven years. Likewise they must keep a record of all communications sent and received by the strata committee and owners corporation for seven years along with meetings records.
Since June last year, records strata schemes are required to keep must be stored electronically.
The recently unveiled batch of new strata laws and fees also require electronic access to records to be through secured means.
Current owners must authorise prospective buyers to see the strata roll, financial records and other records by contacting the strata committee or strata manager.
These potential owners – or more likely hired strata searchers – face a costlier exercise to inspect a strata scheme's records ahead of purchase.
Pre-purchase reports all mount up especially if the buyers miss out at auction, with no reform attempt since the former Kiama MP Matt Brown unsuccessfully sought to reduce the costs incurred about 15 years ago. Back then Brown noted the typical strata report cost was $300 to $350. These days buyers typically pay up to $299 for reports on strata schemes of less than 100 lots, and this jumps higher per report for even bigger strata schemes.
There is also a shared marketplace using a share cost model that is seeing reduced costs for pre-purchase reports for the buyers as low as $89.
And some innovative estate agencies make a prepared online strata report readily available to buyers. It is a cost their seller incurs but it helps the prospective buyer in moving quicker to make an offer with the confidence they need.
'By giving buyers the information upfront, you remove the friction that slows deals down,' Before You Buy founder Rhys Rogers says.
Requests to see strata records and make copies must be given within 10 days. The owners corporation must put the fee into their administrative fund and pay their strata manager their agreed fee for its supply.
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