Buying a Strata Property?  What to Check Before You Sign

Buying an apartment or townhouse can look straightforward. You inspect the property, check the location, agree on a price and review the contract.

But when you buy into a strata scheme, you are not just buying your individual property. You also become part of the Owners Corporation which is responsible for shared areas and expenses, including the building structure, lifts, gardens, pools, driveways and other common property.

That means problems elsewhere in the building can potentially become your problem too.

Before you sign a Contract to buy a strata property in NSW, you should have the contract reviewed by a qualified lawyer, review the strata report, inspect the building condition, investigate the finances and upcoming expenditure of the Owners Corporation and review the by-laws.  Doing your research before you buy can reveal expenses, restrictions or problems which are not obvious at an inspection.

Read the Strata Report

A strata report can provide valuable information about how the building is being managed and its financial position.

Depending on the records available, it may help identify:

  • current strata levies;
  • previous or proposed special levies;
  • the financial position of the owners corporation;
  • planned major expenditure;
  • insurance information;
  • disputes or recurring issues;
  • meeting minutes; and
  • maintenance or repair concerns.

Do not simply look at whether the current quarterly levies appear affordable. A building with relatively low levies may still have substantial work approaching.

Check the Capital Works Fund

Strata schemes need to plan for larger, longer-term expenses such as major repairs and replacement of common property.

From 1 April 2026, NSW introduced standardised requirements for 10-year capital works fund plans, with the aim of improving planning for future maintenance and expenditure.

A prospective purchaser should understand what major work is expected over the next few years, and whether is there enough money available to pay for that work.

If significant expenditure is approaching and the scheme does not have sufficient funds, owners may ultimately need to contribute through increased levies or special levies.

Inspect for Building Defects and Major Repairs

A freshly renovated apartment can still sit inside a building with expensive underlying problems.

Issues involving waterproofing, roofing, concrete, balconies, fire safety, plumbing or other common property can potentially result in substantial costs for owners.

Purchasers should obtain both a strata report and a building inspection report before purchasing.

For newer developments, purchasers should also pay attention to the building’s initial maintenance schedule. New requirements applying from 1 April 2026 are intended to improve how these schedules are prepared and how future maintenance is planned.

Check for Special Levies

A special levy is an additional contribution owners may be required to pay when ordinary strata funds are not sufficient for particular expenditure.

This can become an unpleasant surprise for a new owner, particularly where major repairs have already been discussed or approved before the property is purchased.

Meeting minutes, financial records and the capital works plan should provide an indication as to whether any special levies are forecast.

If major works appear to be on the horizon, understand the likely cost and whether any levy has already been approved before committing to the purchase.

Read the By-Laws

Strata ownership also means living by the rules of the scheme, in community with other owners.

Before buying, check whether the by-laws suit the way you intend to use the property.

Depending on the scheme, by-laws may deal with matters such as:

  • pets;
  • parking;
  • renovations;
  • use of common property;
  • noise;
  • moving in and out of the building; and
  • other day-to-day aspects of strata living.

This is particularly important if you are already planning renovations, if you have a pet or if you have a specific requirement which is important to you.

Have the Contract Reviewed Before You Commit

The best time to identify an issue is before you are legally committed to the purchase.

You should engage professional and experienced advice to help you understand the Contract, title, strata information and any issues which should be investigated before exchange, even if it is proposed that the Contract is to exchange with a cooling off period.

This is particularly important if you are buying at auction, where you should obtain legal advice and complete your investigations before bidding because there is no cooling off period if you purchase a property at auction.

Buying the Apartment Means Buying Into the Building

The apartment itself may be exactly what you are looking for, but the condition and finances of the strata scheme can have a significant impact on the true cost of ownership.

Before you buy, look beyond the kitchen, balcony and floor plan. Check how the building is maintained, what expenses may be coming, whether the owners corporation has adequate funds and whether the by-laws suit your plans.

You should also review the strata report to see if there has been any disharmony in the building.  Sometimes purchasers find the apartment of their dreams, only to discover that a nightmare neighbour owns the apartment next door.

WMD Law’s Property Law team can review the Contract and strata information before you commit to a purchase, helping you understand any issues which may need further investigation. Click here to contact us or call 9525 8688.

By Rebecca Flynn, Director, Principal & Notary Public, WMD Law

Rebecca Flynn