In our experience, the scheme's finances matter as much as the apartment itself: a good-looking building with a thin fund can hand you a five-figure special levy soon after you move in. The levies, the fund balances and the meeting minutes are where that risk shows up.
What should you check before buying into a NSW strata or community scheme?
If you are buying into a strata or community scheme, look closely at:
- current and proposed periodic levies, and any special levies;
- the financial status of the scheme, for example whether the strata or community fund is healthy or in deficit, and how the owners corporation makes its decisions;
- insurances, for example what the strata or community insurance covers and what you need to insure once you own the lot;
- building defects and works required on the common or association property, such as removal or replacement of external cladding identified as combustible, or structural issues like cracks and water leaks, which can lead to significant levies on lot owners;
- the history of works carried out on the common or association property and on the lot you are buying;
- your rights and obligations under the by-laws or community management statement, for example approvals needed for renovations or keeping pets, and any past or ongoing disputes in the scheme.
A strata or community inspection report is the single most useful tool a buyer has for assessing these things. You order it as an inspection of the scheme's records through a strata or community title inspector, and it generally covers the history of the building or complex, the financial status of the scheme, current and proposed works, special levies, past works, and any compliance issues.
What is the difference between a strata certificate and an inspection report?
It helps to know there are two related things. You are entitled to a formal strata information certificate from the owners corporation or its manager, which sets out the current levies, any arrears on the lot and the scheme's insurance. From 1 April 2026, this certificate must also disclose more, including any embedded networks, compliance and enforcement actions, and the last 12 months of meetings. Separately, a strata inspection report is the fuller picture: an inspector reviews several years of financial statements, meeting minutes, correspondence and any building-defect notices. For a considered purchase, rely on the inspection report, not the certificate alone.
What is the difference between the administrative fund and the capital works fund?
A strata scheme runs two funds, and your quarterly levies feed both. The administrative fund covers day-to-day running costs, such as insurance, management and routine maintenance. The capital works fund is set aside for major, long-term works planned over the years, such as roof replacement, repainting or lift repairs. A thin capital works fund is one of the clearest warning signs in an inspection report: it often means a special levy is coming to pay for big-ticket repairs the scheme has not saved for.
When is a special levy likely, and who pays it?
On top of the regular levies, the scheme can strike a special levy for an unbudgeted or urgent cost, such as combustible-cladding rectification or facade repairs. As a general rule, a special levy struck before the contract date is the seller's responsibility, while one struck after it typically falls to the buyer, though the contract's adjustment provisions ultimately govern. Check the strata records and recent meeting minutes for any levy on the horizon before you sign: a large levy voted just after you exchange can land on you.
Who fixes a leak from the unit above?
Who repairs a leak, and who pays, generally turns on where the fault lies. Where the problem is in common property, for example shared structure or waterproofing that forms part of the common property, it is usually the owners corporation's job to fix. Where the fault is inside a lot, for example a private fixture or fitting, the lot owner is usually responsible. The boundary between the two is a common source of strata disputes, so if a building has a history of water ingress, look for it in the inspection report and meeting minutes, and ask your conveyancer how responsibility is likely to fall in your scheme.
What if the building has defects?
Defects are one of the biggest risks in an apartment purchase, and they are exactly what an inspection report is for. It should reveal any known defect notices, outstanding rectification works and combustible-cladding issues, all of which can lead to major levies. For newer buildings, several statutory protections may apply, and the time limits on them matter. The main ones are the Design and Building Practitioners Act 2020 duty of care, which extends to strata buildings and applies retrospectively; the Strata Building Bond, a 2% bond for class 2 buildings over three storeys; Home Building Compensation Fund cover for residential building work on buildings up to three storeys; and the statutory warranties under the Home Building Act, which run for six years for major defects and two years for other defects. Ask your conveyancer which of these cover the scheme you are buying into before you commit.
The equivalent rules differ in other states: see buying in an owners corporation (VIC) and buying in a body corporate (QLD).
General information only, not legal advice. Conveyancing law varies by state and changes over time; confirm your situation with a licensed conveyancer or solicitor.
