I posted a poll on Instagram: “Strata report says ‘no proposed special levies.’ That’s good enough for me. Yes or no?” The results? 71% said “no,” but 29% answered “yes”—a worrying number, suggesting that many people are okay with (or maybe unaware of) overlooking the details. This indicates that many buyers don’t fully know what they’re getting into with strata. Strata properties often come with hidden complications, and without experience reading these reports, it’s easy to miss the warning signs.
For most buyers—especially first-home buyers—the important details within strata reports, often hundreds of pages long, aren’t obvious. And a strata inspector’s job is only to report the facts, not to interpret them. Inspectors typically pull from strata documents without adding context, leaving it up to the buyer to connect the dots. For example, a “no proposed special levies” line might seem reassuring but doesn't necessarily mean that special levies are unlikely. A buyer’s agent helps you read between the lines, ensuring you understand what you’re signing up for so you can make confident decisions.
Here are the hidden issues to look out for:
1. Deferred Maintenance or Repairs
Some strata reports will say “no proposed special levies,” which is technically correct. Buyers might take this to mean there aren’t any unusual costs ahead. But the reality? Sometimes, repair costs are so high that the strata committee delays approval until they can accumulate the funds or get additional quotes. In these cases, it’s not that repairs aren’t needed—they just haven’t been approved yet due to budget constraints. So technically, yes, there are no special levies, but they’re most likely on the horizon.
2. Unusually High Levies
If a strata property is advertised without the strata levies listed, it might be because the levies are unusually high, and the agent wants to avoid scaring off potential buyers. When the levies seem excessive—say, $3,000+ per quarter for a standard two-bedroom unit no additional facilities—buyers should dig to understand why. High levies could indicate ongoing major repairs or funds being accumulated for upcoming projects.
3. Suspiciously Low Levies
Ultra-low levies might be marketed as a positive, but they can be a cause for concern. If owners aren’t building up funds through sufficient levies, how will they cover essential maintenance or remedial works when they’re due? Low levies can indicate a lack of proactive planning and care for the building, which may lead to special levies or a scramble for funds when issues inevitably arise.
4. Understanding the Capital Works Fund: Big Numbers Aren’t Always Enough
A healthy Capital Works Fund (CWF) is encouraging, but the numbers can be misleading without context. A $1.5 million balance might seem solid, but if there’s a $15 million quote for future repairs, that $1.5 million only covers 10% of the costs. This imbalance could mean that owners will be hit with significant special levies to make up the shortfall.
5. Special Levies as a Window Into the Building’s History
Large special levies in a building’s recent history often signal one of two things: unforseen remedial works, or owners have neglected maintenance, allowing issues to escalate over time. These special levies reveal more than financial outlay—they provide insight into how well (or poorly) the building has been built and managed.
I dig into strata documents, including meeting minutes and financial records, to uncover the building’s repair history. If I see a pattern of recurring special levies, it often means unresolved issues that could lead to even more costs. By spotting these signs early, I help clients avoid properties that might become constant financial drains.
If you’re considering buying a strata property, it’s essential to look beyond the numbers and understand the full picture of levies, funds, and maintenance history.