This is a difficult question – in a lawyer’s ideal scenario, a client would avail themselves of all due diligence reports you could possibly get before buying a property.
Having said that, due diligence is not free (e.g. Pest & Building reports usually cost $500 - $600) and can take precious time to undertake which simple may not be available.
The reality is that, with strata apartments, the key item of due diligence is the Strata Report.
This is a report usually authored by a strata professional which condenses and summarises all documentation held on file with the Body Corporate, including minutes of meetings, financial statements, quotations for repairs and works as well as insurances. They usually cost $200 - $300.
Don’t forget that, when you buy a strata apartment, you really only exclusively own the 3D airspace inside your apartment and the coat of paint on the walls – everything else is technically common property and therefore the collective responsibility of the Body Corporate.
If there are major works required to the Common Property or defects, this will usually be evident in the history of documentation contained in the Strata Report.
So, it is not a reckless position to only commission a strata report and not purchase a pest and building report when buying a strata apartment.
However, this comes with a few caveats: firstly, if the strata report does throw up suggestions that the building is a state of disrepair, further investigations may be warranted to establish the extent of disrepair and the projected cost of remediation. You won’t be responsible for the entire cost of remediation of course but as a unitholder you will be partially responsible and that could still be a considerable expense.
In that vein, we would recommend getting a pest & building report for strata duplexes and other “smaller” strata complexes – the reason being that while the common property is a still a collective obligation it will obviously be a more significant obligation when the costs of repairs are shared by few owners.
For high value or premium apartments, we would also recommend getting a pest & building report. In that instance, the cost of $500 - $600 or so to commission a pest & build report is easily justifiable as a percentage of the purchase price. Premium apartments also tend to have high value and top of the range appliances which are expensive to replace in the case of breakdown.
It is important to remember that most appliances (ovens, fridges, dishwashers and sometimes air-conditioning) is generally not common property. So even if you don’t commission a pest & building report, it is important to at least check these are working before you commit to purchasing a property.
