What to check before buying an apartment: strata and owners corporation

Read the owners corporation, not just the apartment

An apartment is two purchases in one: the lot you live in, and a share of a building run collectively by its owners corporation. Most buyers inspect the first and ignore the second — which is backwards, because the larger and less visible risks live in the shared building and its finances. Before the unit, read the owners-corporation records for these:

• Maintenance / sinking fund balance — is there enough set aside for the building’s age and the works it will need?
• Special levies — any raised recently, or foreshadowed in the meeting minutes?
• Quarterly fees — the ongoing cost, and the trend: are they rising, and why?
• Insurance — is the building insured to full replacement value, and is the premium climbing?
• Disputes & defects — litigation, building-defect claims, or major works on the horizon.
• By-laws / rules — restrictions on pets, renovations or short-term letting that may affect how you use or rent the apartment.

Where to find it

These details sit in the owners-corporation certificate and the meeting minutes, which are disclosed with the contract — in Victoria, within the Section 32. You can also commission a specialist strata report. Read the minutes specifically for the words special levy, defect, litigation and major works — that is where the building tells you what it is about to ask of its owners. A deferred major work, in particular, is usually a special levy waiting for its moment.

The sinking fund is the tell

For an apartment, the financial read often matters more than the unit itself. A healthy maintenance (sinking) fund means the building can pay for the lift, the roof, the repaint and the common-area works out of accumulated contributions. A thin fund against an ageing building means those costs arrive as special levies — one-off charges that can run into five figures per lot — and they land on whoever owns at the time, which could be you in year one. A cheap apartment in a building with an empty fund is rarely the bargain it looks: you are buying a share of the shortfall along with the unit.

Then check the building itself

The strata records tell you the money story; a building inspection tells you the physical one. In apartments, the physical risks cluster in three places:

Waterproofing and balcony membranes

Failed waterproofing — in bathrooms, and especially in balcony membranes — is consistently one of the leading defect categories in apartment buildings. It is expensive to put right because access often means common property and multiple lots, which is exactly why it tends to surface as a special levy rather than a quiet repair.

Combustible cladding

For towers and mid-rise buildings constructed in the 2000s–2010s, combustible cladding is a live issue. Check the owners-corporation records for a cladding assessment, any rectification works, and whether a related special levy has been raised or is foreshadowed — the cost of replacement can be very large.

Builder defects

Newer buildings carry the risk of original builder defects — waterproofing, fire separation, structural and services issues that emerge in the first years. The minutes will often show whether defects have been identified, pursued, and resolved, or are still in dispute. See red flags by era for what newer buildings tend to hide.