Ep 8. There’s No Such Thing As A Perfect Building
This episode is a continuation of strata reports and building maintenance. The importance of looking through building maintenance reports is the main focus to ensure you don’t get sprung with unaccounted maintenance down the track.
Here’s what you’ll learn from today’s episode:
What to look out for in a maintenance report
What kind of defects may be present within a building
Legal requirements of the reports
What is recorded in the reports
Speakers in today’s episode:
Michelle May - Michelle May Buyers Agents
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VIEW TRANSCRIPT
Hi and welcome to Buy Your Side property podcast that helps you buy better. My name is Michelle, and today I'm going to continue talking strata and apartment buying. So you've bought your strata report, you know all about the Sinking Fund Forecast (or the Capital Works Forecast I should say), you know if there have been any special levies. Let's look into the building maintenance and other indicators of well a run strata, because it doesn't just stop there.
Let's look at defects under homeowners' building warranty, and major remedial works not included in the H.O.W, because it's important to understand that there's no such thing as a perfect building. Much like buying a house, an apartment complex needs to be maintained. So don't be scared of reading a report where there's been, you know, issues with water penetration or other things like that, because it is very common to see in a lot of strata reports. But what is important is what have the executive committee or the owner's corporation done with the issues and how have they rectified them, and how long has it taken them to do so? It's about putting it into context basically. It's unrealistic to think that a property in an apartment complex will have no issues whatsoever because that's not realistic at all. But it's important to have an engaged and committed executive committee.
So look at what the building maintenance has been like within that report. So you should get at least a 5 year history to give you a good idea. But also look at how often does the owners corporation meet? They only have to meet once a year at the AGM, and then immediately following they normally have another meeting. But have a look at also how many people come to those meetings. So the maximum number of committee members is 9 in any sized building. How many people are on this committee, for example, but how many other people show up, and how often do they meet? Some buildings they meet every 2 months and 20 people out of 30 show up. That's huge involvement, and that's great to see because that means, you know, that things get sorted quickly and hopefully without conflict or disharmony. So that's also something that will be recorded in the strata report because obviously these meetings all get recorded, and some, trust me, they do read a little bit like war and peace. Janet in Unit 2 doesn't get on with Dave in Unit 6, and Charles in Unit 20 is keeping an illegal cat, we've allowed for him to keep it until it dies, but that's it. So it makes for some interesting reading, but it's important to read it before you commit yourself to being part of that community. I think it would be a mistake to think that other people would do this for you. I think if you are going to be living in an apartment, it is the responsible and right thing to do to get involved and to be part of the decision making. It's almost a bit like compulsory voting in Australia. You know, you can't really complain because you've got a voice to use it. So definitely look at all those things. How often do they meet? When is the next AGM (the annual general meeting), and how in-depth are the notes?
The other thing I'd like to talk to you about is the actual legal requirements of the building, and there's quite a few of them, and not all will be applicable, of course. But the first one I would talk about is the annual fire safety statement. It is a legal requirement for the buildings to have that done every year, and in parts of Australia, there is such a thing as a fire order where local councils are going through every single building to ensure that the buildings are up to code with current fire safety standards. Which is a fantastic thing, but it also means that the buildings will be up to, you know, 20, 30 or $50,000 worth of remedial repairs to ensure that the building is indeed safe to continue living in in the future. But that all starts with the annual fire safety statement. So it makes sure that it is cited and current and attached to the report. The other thing to look at is that the Capital Works Fund Forecast is adhered to. So, again, look back at how much money you have got in the fund, and what is the recommendation that was done by the external party so that you know that there will be money in the kitty moving forward. Then there is this thing called an asbestos report. Now, some buildings that were built pre 90s may have asbestos in them. So it is a good thing to have the building checked for any potential asbestos in the building. It is better to know what you're dealing with than not. But obviously, this is not going to be relevant for every building out there.
Another legal requirement, however, is window safety devices. So this was to ensure that no small people could be falling inadvertently out of high windows, and so this was brought in a number of years ago, and it's actually a legal requirement for apartment buildings to be compliant for this. And so they have to actually have a certificate of compliance and that should be attached to the report. The same with a Pool Safety Certificate. So if you have your own home, you should also have a safety certificate, and that's the same for an apartment building. They have to be compliant, and obviously, if any of these things are not up to date, the owners corporation could be slapped with a huge fine, and look, that would be the least of your problems, because if somebody gets hurt, that would be a lot worse. Now, since the Granville Towers disaster in London, we have had a combustible cladding register here as well. So buildings that have cladding on them need to be registered so that people are aware of that. And there will be remedial works to ensure that that is all safe as well.
Now, a few more you wouldn't have thought that there's so many things that buildings have to adhere to, but they are, and it's important to check if they're in your occupational health and safety report. They're not always a legal requirement. It depends if common areas are looked after by contractors, but it's good to know whether your building is actually safe. You know, are there any uneven tiles, are there things obstructing a clear exit, for example? So a lot of buildings get this report done to check it out and make sure that that's all a-OK. And then, of course, if the building has a lift, has it got a lift maintenance certificate? Obviously, that needs to be up to date as well.
So I think I've given you enough to look out for, but this sort of report really should be your best friend. Read it through. Some of them can be 300-400 pages long. So it is a bit of a home, but it is worth your time because you need to understand that not only are you going to love living in the apartment, but you're going to be part of a great community who are going to be looking after you and your investment in your home as well. So take the time to do it. I hope that was helpful. If it's brought up lots of questions, get in touch please. My email is hello@buyyourside.com.au. I look forward to hearing from you, and thank you for listening.