Strata Inspection: What a Strata Report Reveals Before You Buy an Apartment

A strata inspection is a review of the owners corporation records behind a strata titled property, carried out before you buy, to reveal the financial, legal, and maintenance position of the whole building. It typically costs $250 to $450 in NSW, takes 2 to 5 business days, and covers levies, fund balances, special levies, insurance, by-laws, meeting minutes, defects, and disputes.

It is not a physical inspection of the apartment. It is a paperwork audit of the entity you are about to become a part owner of. Buy into a scheme with a drained capital works fund and an unresolved defect claim, and the cost lands on your levy notice, not the vendor's.

What is a strata inspection?

A strata inspection, also called a strata report, strata search, or owners corporation records inspection, is an examination of every record the owners corporation is required to keep. The inspector attends the strata manager's office (or an online portal), reviews the books, and writes up what a buyer needs to know.

In New South Wales this right comes from section 182 of the Strata Schemes Management Act 2015, which lets an owner, a mortgagee, or a person they authorise request access to the scheme's records. That is why your inspector needs a signed letter of authority from the vendor before they can book the search.

The report is retrospective. It looks back over the recent history of the scheme, usually the last three to five years, and reports what the records show. It does not predict the future, and it does not certify that the building is sound.

What a strata inspection is not

• It is not a building and pest inspection. No one climbs into the roof space or tests for termite activity in your unit.
• It is not a valuation. The report will not tell you what the property is worth.
• It is not legal advice. It flags disputes and by-law issues; your conveyancer interprets the contract consequences.
• It is not exhaustive. Inspectors report on the records made available. If the owners corporation keeps poor records, that itself is the finding.

What does a strata inspection report cover?

A thorough strata report covers six areas: finances, levies and special levies, insurance, by-laws and governance, maintenance and defects, and disputes. Below is what a competent inspector looks for in each.

Financial position

The two funds are the administrative fund (day to day running costs: cleaning, gardening, insurance premiums, management fees) and the capital works fund, previously called the sinking fund (major works: roof replacement, repainting, lift refurbishment).

The inspector reports both balances, the budget, arrears owed by lot owners, and any loans the owners corporation has taken out. A capital works fund holding a few thousand dollars for a 40 lot building with a 30 year old roof is a red flag, not a bargain.

Levies and special levies

You get the quarterly levy for your lot, split between the two funds, plus your unit entitlement, which determines both your levy share and your voting power. Any special levy that has been raised, is proposed, or has been discussed in minutes should be identified with the amount and the timing.

This is the single most expensive thing a strata report can save you from. Special levies for remedial work on a mid sized block routinely run into tens of thousands of dollars per lot.

The 10 year capital works plan

Every NSW owners corporation must prepare a 10 year capital works fund plan of anticipated major expenditure, and that plan must be made available in a section 182 inspection. It is the closest thing you get to a forecast of your future costs.

Read it against the current fund balance. A plan that schedules a $600,000 facade repair in three years, sitting next to a fund that is nowhere near that figure, tells you a special levy or a strata loan is coming.

Insurance

The report confirms the building insurance policy, the insurer, the sum insured, the expiry date, and whether the sum insured is supported by a current valuation. It should also note public liability, workers compensation, and office bearers cover.

Underinsurance is common in older schemes that have not had a replacement cost valuation in years. If the building burned down, every owner would be funding the shortfall.

By-laws and governance

By-laws control how you can actually live in the property. The report should extract the ones that change buying decisions: pets, short term letting, parking, renovations, flooring and noise, smoking, and use of common property.

Governance items matter too: who the strata manager is, whether their agency agreement is current, whether a strata committee exists and functions, and whether meetings are held and minuted properly.

Maintenance, defects, and works history

The inspector pulls the history of major works from minutes and financials: what has been repaired, what was quoted and never done, and what is currently unresolved. Recurring themes matter more than one off items.

The defects that cost the most in Australian strata are consistent: water ingress and waterproofing failure to balconies and wet areas, concrete spalling, combustible cladding rectification, fire safety non compliance, and lift or plumbing renewal in older buildings.

Disputes and legal action

Any NCAT proceedings, mediation, builder or developer claims, insurance disputes, or debt recovery against owners should be listed. Litigation the scheme is running is litigation you help fund from settlement day.

Strata inspection cost in Australia

Most strata inspection reports cost $250 to $450, with Sydney inspectors commonly quoting around $330 to $425 including GST. Prices sit higher for large or complex schemes, mixed use buildings, and urgent turnarounds.

Note the last two rows. The statutory search fee payable to the owners corporation under the NSW regulations is separate from your inspector's fee, and some agencies add an online access charge on top. A good inspector tells you before proceeding rather than surprising you on the invoice.

Is a strata report worth it?

Weigh the fee against what it protects. A few hundred dollars against a special levy, an inherited defect claim, or a by-law that bans the dog you already own is not a close call.

Rule of thumb: if the report costs less than one month of your prospective mortgage repayment, and the scheme has more than a handful of lots, order it.

How the strata inspection process works

1. Get the property details. Strata plan number, lot number, full address, and the vendor's name.
2. Obtain the letter of authority. Request this from the vendor's agent, solicitor, or conveyancer. Without written authority the search cannot legally proceed.
3. Book the search. The inspector contacts the strata manager, pays the statutory fee, and books access to the records.
4. Inspect the records. On site at the agency or through an online portal, covering minutes, financials, registers, insurance, and correspondence.
5. Receive the report. Delivered in 2 to 5 business days, with summaries and copies of key documents.
6. Review with your conveyancer. Use the findings to negotiate, ask for conditions, or walk away before exchange.

Order the report before exchange, not after. In New South Wales the standard cooling off period is five business days and forfeits 0.25 per cent of the price if you withdraw, so leaving the search until after exchange narrows your options and costs money.

How long does a strata inspection take?

Two to five business days is standard. The inspection itself takes a few hours; the delay is almost always the strata manager's availability to make records accessible. Schemes with digital record portals turn around faster than agencies requiring an in person appointment.

Build a week into your timeline. If you are buying at auction, order the report before auction day, because there is no cooling off period on an auction purchase.

Strata report vs building and pest inspection

Buying a unit generally means you need both. They answer different questions and neither substitutes for the other.

For more on the physical side of the process, see our guides to the pre-purchase building inspection and building and pest inspection in Sydney.

Section 182 search vs section 184 certificate

These are often confused. A section 182 inspection is the full records search that produces your strata report. A section 184 certificate is a short, prescribed form issued by the owners corporation confirming the current levies, arrears, insurance details, and a limited set of scheme particulars for one lot.

The certificate is a snapshot and is commonly attached to the contract. It will not tell you that minutes from two AGMs ago record an engineer recommending $400,000 of remedial waterproofing. The full search will.

Red flags in a strata report

• A capital works fund far below the 10 year plan. Underfunding means levies rise or works get deferred until they become expensive.
• Repeated special levies. A pattern of raising money reactively points to poor forecasting.
• Active NCAT proceedings or a builder defect claim. Costs and outcomes both transfer to you.
• Water ingress appearing across multiple years of minutes. Unresolved waterproofing is one of the most expensive strata defects to fix.
• Combustible cladding on the register. Rectification programmes run to very large per lot figures.
• High levy arrears. Owners not paying means the scheme cannot fund maintenance.
• Fire safety statements missing or overdue. A compliance problem the owners corporation must fix, at owners' cost.
• Thin or missing minutes. A scheme that does not document itself is a scheme you cannot assess.
• Insurance not backed by a current valuation. Possible underinsurance across the whole building.

Strata, community, and company title

Not every shared scheme is strata. Strata title gives you a lot plus a share of common property. Community title layers an association over multiple lots or subdivisions, often with its own levies and by-laws. Company title means a company owns the building and you own shares that confer occupancy rights, which affects finance and resale.

Ask your inspector to confirm which structure applies before ordering, because the records, the search process, and the risks differ. Company title in particular usually requires company approval for a sale.

Can I do the strata inspection myself?

Yes, if you have the vendor's written authority. Under the NSW legislation a buyer's authorised agent can request an inspection and take extracts or copies, on written notice and payment of the prescribed fee.

In practice most buyers do not. You are reading several years of minutes, balance sheets, and registers in a limited appointment window, and the value lies in knowing which line items matter. An experienced inspector reads a levy notice and a capital works plan against each other in seconds.

How old can a strata report be?

Prefer a report prepared within the last three months. Anything older risks missing a recent AGM, a newly struck special levy, or a fresh defect resolution.

Pre-existing reports sold at a discount can be good value on a busy building where several buyers are circling, but check the preparation date first and ask whether an update search is available.

Getting your strata inspection organised

Line up three things before you order: the strata plan and lot number, the vendor's letter of authority, and your settlement timeline. With those in hand a report is straightforward to book and usually lands well inside a standard cooling off period.

Hama Con Building Inspections arranges strata inspections alongside pre-purchase building and pest inspections, so you can assess both the paperwork and the property before you commit. Get in touch with the property address and strata plan number and we will confirm scope, price, and turnaround.