Did you know that you could use the contents of a pre-purchase strata report to negotiate for a better purchase price when you want to buy a unit in a strata property? This article discusses some information that you should look for in a strata report so that you can ask for a reduction of the purchase price.
Existence of Defects
The strata report that you receive may have a section referring to a possible structural defect on the building. For instance, an exterior wall may not be standing straight. Chances are high that a professional will confirm the existence of a structural defect, such as a failing rafter system. That defect will be fixed using contributions made by the owners of units in that building. Ask the seller to reduce the selling price in order to accommodate the possible levy that you will be asked to pay in order to fix the structural problem once you start owning the unit.
Existence of Creditors
Under normal circumstances, the common property on a strata property is maintained using funds that are set aside for that purpose each year. It may therefore be baffling to find that the strata community has creditors who conducted repairs and are yet to be paid. It may be likely that a new levy could be imposed in order to cover those debts. You should only be responsible for debts that were incurred while you were a member of that strata community. It would therefore be fair for the seller to reduce the price of the unit in order to offset all or part of the cost that you will incur as those creditors are paid off.
Lack of Maintenance Projections
Strata communities usually have projections of how much money will be required to maintain the property for a given number of years. The funds for those repairs are usually put on a special account from which maintenance expenses are met. You can try to ask the seller for a discount in case the projections are missing from the strata report. Your justification for that deduction can be that the levies imposed to meet those maintenance costs may turn out to be much higher than you had expected.
The suggestions above may only be useful if you negotiated a purchase contract that has a clause permitting you to review the terms in case the pre-purchase strata report reveals information that can affect your final decision to buy the unit. Engage a strata solicitor so that that professional can do everything possible to unearth any information that may be helpful in negotiating a lower purchase price for that strata property.