Why a Records Search is Essential When Buying
Buying an apartment, townhouse or a community title property can be exciting, but it’s also a major financial commitment. Beyond inspecting the property itself, one step many buyers overlook is the record search, [also termed a ‘strata search’]. This is a simple yet powerful tool that can protect you from unexpected costs and headaches down the track.
In Australia, strata schemes & community associations (also called owners corporations or body corporates, depending on the state or territory) manage shared buildings and the associated common or community property. A search gives you a snapshot of the financial, legal, and operational health of the scheme.
Here’s why it’s so important:
What is a Search?
A search is a review of the official records of a strata or community scheme.
It includes:
Financial documents: budgets, levies, outstanding debts, and any special levies.
Meeting minutes: decisions made by the owners corporation, disputes, and upcoming projects.
Insurance details: coverage levels for the building and common areas.
By-laws: rules residents must follow regarding pets, renovations, noise, and other matters.
Litigation or disputes: ongoing legal actions or conflicts between residents or with the scheme itself.
These documents help you understand not just the community you are buying into, but how it’s managed and what challenges it may face.
Why a Search Matters?
1. Avoid Unexpected Costs
Special levies or unpaid debts in a scheme can end up on your shoulders as a new owner. A search shows you if the building has upcoming repairs, renovations, or legal disputes that could result in large bills.
2. Understand the Building’s or Scheme’s Condition
Minutes from meetings often reveal structural and defect problems, maintenance issues, or upcoming capital works. Knowing about these in advance lets you factor potential costs into your decision. Also look at a lack of Minutes as a sign of disinterested owners and management.
3. Insight into Governance and the Community
A search highlights how the scheme is managed and whether disputes are frequent. Are by-laws enforced fairly? Is the committee responsive? This information can be crucial for your future enjoyment of the property.
4. Reduce Risk
Skipping a search is like buying a car without a test drive or a house without an inspection. You might end up with hidden problems that cost thousands or move into a scheme filled with difficult neighbours. A search helps you make a fully informed decision and negotiate with confidence.
Real World Example
A subscriber contacted us on an unfortunate issue where the owners corporation recently voted on a major roof replacement. Without checking the records, they did not know a special levy of $35,000 per lot was coming. This was a very unexpected cost for the buyer. A search would have revealed the upcoming levy and allowed them to plan, negotiate or reconsider the purchase.
How to Conduct a Search
Engage a professional: Conveyancers, solicitors, or specialist search agents can obtain and interpret the records.
Timing: Ideally, arrange the search before exchange of contracts or include it as a condition in the contract.
Cost vs. benefit: Strata searches typically cost a few hundred dollars; a small price compared to potentially thousands in unforeseen expenses or a regretted purchase.
You can of course do a search yourself, as a buyer you will need a letter of authority from the selling agent, the vendors lawyer or the vendor themselves. Generally, there is a small statutory fee for conducting a search via the office of the strata managing agent or at a place arranged with the secretary of the scheme. Searching yourseld This can sometimes be the best way.
Jessica Rippon is the Founder & Director of Construction Legal
Jessica has over 22 years in the property and construction industries and founded Construction Legal, a multi award winning firm, in 2018. Jessica has acted for a broad range of clients across both the government and private sectors, including NSW Building Commission, NBN Co, Deicorp, JQZ, Castle Group, Poly Global, Winten Property Group, Downer EDI and Growthbuilt.
Her passion is to drive change in the NSW residential building sector by championing better regulation and quality construction.
Disclaimer:
This article is intended for general educational purposes only and does not constitute legal or financial advice. Readers should seek independent legal and professional guidance relevant to their specific circumstances and jurisdiction.