Hidden Strata Costs Every Buyer Should Know - Inner West

Strata reports: why “no proposed special levies” is not always enough

I posted a poll on Instagram:

“Strata report says ‘no proposed special levies.’ That’s good enough for me. Yes or no?”

The results were interesting. 71% said “no,” but 29% said “yes.”

That 29% is a worry, because it suggests some buyers may be comfortable relying on that line alone, or may not realise how much more there is to look at.

Strata properties often come with hidden complications. Without experience reading these reports, it is easy to miss the warning signs.

For most buyers, especially first home buyers, the important details in a strata report are not always obvious. These reports can be hundreds of pages long, and a strata inspector’s job is usually to report the facts, not interpret them.

For example, a line saying “no proposed special levies” might seem reassuring. But it does not necessarily mean special levies are unlikely.

Here are some of the hidden issues to look out for.

1. Deferred maintenance or repairs

Some strata reports will say “no proposed special levies,” and technically, that may be correct.

But sometimes repair costs are so high that the strata committee delays approval until they can accumulate funds or get more quotes.

In that case, it is not that repairs are not needed. They just have not been formally approved yet.

So yes, there may be no special levies right now, but they could still be on the horizon.

2. Unusually high levies

If a strata property is advertised without the strata levies listed, it may be because the levies are unusually high and the agent does not want to scare off buyers.

If levies seem excessive, for example $3,000+ per quarter for a standard two-bedroom unit with no additional facilities, buyers should ask why.

High levies can indicate ongoing major repairs, or that funds are being accumulated for upcoming works.

3. Suspiciously low levies

Ultra-low levies might look appealing, but they can also be a concern.

If owners are not contributing enough through levies, how will the building pay for essential maintenance or remedial works when they are needed?

Low levies can indicate poor planning or a lack of care for the building, which may lead to special levies or a scramble for funds later.

4. Capital works fund: big numbers are not always enough

A healthy Capital Works Fund can be encouraging, but the number needs context.

A $1.5 million balance might look strong. But if there is a $15 million quote for future repairs, that fund only covers 10% of the cost.

That shortfall could mean owners are later hit with significant special levies.

5. Special levies can reveal the building’s history

Large special levies in a building’s recent history often point to one of two things:

• unexpected remedial works
• maintenance that has been neglected until issues became more serious

Special levies can tell you more than just what owners have paid. They can give insight into how well, or poorly, the building has been built and managed.

I look through strata documents, including meeting minutes and financial records, to understand the building’s repair history.

If there is a pattern of recurring special levies, it may point to unresolved issues that could lead to more costs later.

Final thoughts

If you are considering buying a strata property, it is important to look beyond one line in the report.

“No proposed special levies” does not always mean there are no issues.

You need to understand the full picture, including levies, funds, meeting minutes, repair history, and any signs of future maintenance costs.

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