Buy with confidence: what the owners’ corporation certificate can reveal about a property
By Alex Smale
Included in your Section 32, will be an OC certificate which should highlight any potential issues with the property. However, without knowing what to look for, purchasers may be lost in a sea of information.
Most owners when purchasing a property will be concerned with the cost of strata fees. However, it is worthwhile looking beyond the sales agent’s statement of information so you can determine not only what the fees are cur- rently, but whether they are likely to increase.
The certificate will include a statement of the financial position. You should be concerned if the financial statements show a deficit. Conversely, a healthy maintenance fund is a good sign as it shows the property is prepared and the likelihood of special levies needing to
be raised is reduced. There will also be a section where any work which may lead to additional charges will be declared. Here any defects or major projects should be disclosed, and the previous year’s annual general meeting (AGM) minutes should also be reviewed for more details.
OC certificates are required to disclose any building orders or building notices imposed on the property. Works the council imposes can lead to costs and this is one of the places where you may see combustible cladding disclosed.
A different problem is difficult personalities which can have a huge impact of the quality of life of residents. It is difficult to tell when purchasing a property if the other residents are friendly. However, there are giveaways that may be included in the certificate. The first is the committee election in the AGM minutes. In most OCs, everyone who nominates will be voted on. If the minutes note that committee members are voting against each other, it can indicate that the committee is fractured.
Another giveaway is in the number of com- plaints received. Any formal complaint must be recorded at the AGM. Purchasers should consider the content and frequency of any com- plaints received. For example, a simple parking dispute should not dissuade you. However, complaints can also include allegations of anti- social behaviour. Further if they are numerous and vexatious, it can indicate deeper issues within the property.
Finally, the certificate will also include infor- mation on the current contracts between the OC and another party. Here you can find out whether there is an embedded network or if the OC is a party to any long-term contracts that may not favour you.
While conveyancers may be able to point some of the above out, they are not typically OC experts and therefore it is worthwhile looking through this documentation yourself and familiarising yourself with the areas where potential issues could be disclosed
Want to learn more about OCs? Head to: theknight.com.au