Property guide
Strata Health Explained — What to Check Before Buying in a Strata Building
Strata title is the most common form of property ownership for units and apartments in NSW. It means you own your lot (your apartment) plus a share of the common property (corridors, roof, external walls, pool, lift). The strata scheme is managed by an owners corporation, and understanding the financial and physical health of that corporation before you buy is one of the most important steps in apartment due diligence.
What strata records to inspect
Before exchanging on a strata property, your solicitor or conveyancer should obtain and review the strata records. NSW law requires the owners corporation to provide these records on request (usually for a fee). Key records include:
The strata roll (the register of lot owners and their levy obligations), recent meeting minutes (last 2–3 years of AGMs and extraordinary general meetings), the financial statements (income, expenditure, and balance sheet), the capital works fund forecast (previously called the sinking fund forecast), the insurance details, and any notices of current or pending building defects or orders.
For large or complex buildings, a professional strata report from a specialist strata inspector is well worth the $300–$600 cost. They will analyse the records and flag specific issues that a non-specialist might miss.
Capital works fund (sinking fund) — what to look for
The capital works fund is the long-term savings account of the owners corporation. It is used to pay for major works — roof replacement, lift refurbishment, common area painting, car park remediation — that arise over the building's lifecycle. NSW law requires every owners corporation to prepare a 10-year capital works fund plan, updated every 5 years.
A well-funded capital works fund has a balance consistent with the 10-year plan — typically several hundred thousand dollars for a medium-sized building. A depleted fund signals that major works were paid from special levies in the past, or that major works are upcoming and the money is not there to pay for them.
If the capital works fund is significantly below the 10-year forecast at the point you are looking to buy, it almost certainly means a special levy is coming — an additional one-off charge, often $5,000–$50,000 or more per lot, to fund the works. This cost falls on the owner at the time of the levy, which could be you.
Levy arrears and financial stress
Levy arrears are unpaid contributions owed by owners. A small level of arrears is normal in any building — life events happen. However, high arrears (more than 10–15% of the total levy roll) are a warning sign. They indicate that some owners cannot or will not pay their contributions, which puts pressure on the owners corporation's cash flow and can delay necessary maintenance.
Check whether the owners corporation has initiated recovery action on the arrears (via NCAT or debt collection). Also check whether any lots in the building are mortgagee in possession (bank has repossessed after default) — this can sometimes correlate with levy non-payment and general building financial stress.
Building defects and orders
Building defects in strata buildings — particularly those constructed between 2000 and 2020 — have become a major issue across Sydney. Defects include structural cracking, waterproofing failures, cladding fire risk (combustible ACP panels), and fire safety system failures. The Opal Tower and Mascot Towers crises brought this issue into public awareness.
Check the strata records for any current or past defect notices, orders from the Building Commissioner, or outstanding work orders from council or insurance inspectors. Also check whether the building has a fire safety certificate in place and whether the annual fire safety statement is current.
For buildings under 10 years old, also check whether any defect proceedings are underway against the builder under the Home Building Act or the Design and Building Practitioners Act. The NSW Building Commission maintains a register of serious defect orders.
Strata data on Stickybeak
Stickybeak's strata health data is drawn from the NSW Fair Trading strata register and includes active building orders issued by the NSW Building Commissioner under the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020. These orders are issued when serious defects are identified that pose a risk to occupants.
The strata health page for each suburb shows the number of active building orders and the number of strata schemes registered in the postcode. This is a suburb-level risk indicator — for specific buildings, you need the full strata records inspection described above.
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