If there's one document you should read before buying a strata property, it's the strata report. It tells you more about a building's real condition than any open inspection or marketing brochure ever will.
This is Part 4 of our Beginner's Guide to Strata. By now you understand what strata is, how levies work, and how decisions are made. Now let's use that knowledge to evaluate an actual building.
What Is a Strata Report?
A strata report (also called a strata inspection report or strata search) is a compilation of all the records held by the owners corporation and its strata manager. It's ordered by a potential buyer (or their solicitor/conveyancer) during the due diligence period.
The report is not an opinion or assessment — it's the raw source material: financial statements, meeting minutes, by-laws, insurance certificates, correspondence, and more. Some providers also include a summary or analysis, but the core value is in the original documents.
In NSW, strata reports typically cost $180–$350 depending on the provider and urgency. Given that you're making a decision worth hundreds of thousands (or millions) of dollars, it's one of the best-value investments in the entire buying process.
What's Inside a Strata Report
A comprehensive strata report will include:
- Financial statements — balance sheets, income and expenditure statements, fund balances, levy schedules, and the auditor's report (if applicable).
- Meeting minutes — AGM and EGM minutes from the past 2–3 years, plus committee meeting minutes.
- By-laws — the registered by-laws governing the scheme, including any amendments.
- Insurance certificate of currency — what the building is insured for, the insurer, and the policy period.
- Capital works fund plan — the 10-year maintenance and savings plan.
- Correspondence — significant letters and notices, including any from councils, government authorities, or legal representatives.
- Section 184 certificate — an official certificate from the owners corporation that includes key information about levies, debts, by-laws, and any orders or judgments affecting the scheme.
- Strata plan — the registered plan showing lot boundaries, common property, and unit entitlements.
That's a lot of paper. A typical strata report can run to 200–500 pages. The key is knowing what to focus on and what to skim.
Reading the Financials
Start here. The financials tell you whether the building is solvent and well-managed.
Administration fund balance — should comfortably cover a few months of operating expenses. If the balance is low or negative, the building is living quarter-to-quarter with no buffer.
Capital works fund balance — the big one. Compare this to the 10-year capital works plan. Is the balance on track to cover upcoming major works? A healthy sinking fund is your best defence against special levies.
Levy arrears — how much is owed by owners who haven't paid? High arrears (more than one quarter's worth) put pressure on cash flow and may indicate financial stress among owners.
Insurance premiums — check the trend. Premiums that have doubled or tripled in recent years often reflect the insurer's assessment of building risk (flood, cladding, claims history).
For a deeper dive, see our guide to reading strata financial statements.
What Meeting Minutes Reveal
Meeting minutes are the narrative counterpart to the financial data. Read the most recent 2–3 years of AGM minutes, working backwards from the latest.
Look for:
- Recurring maintenance issues — water leaks, lift breakdowns, or fire safety deficiencies that come up meeting after meeting without resolution.
- Discussions about major works — planned building remediation, painting, waterproofing, or plumbing. These forecast future costs.
- Special levy motions — past, present, or foreshadowed. If owners are already discussing a special levy, it's coming.
- Disputes and complaints — noise complaints, by-law breaches, and neighbour conflicts. Some is normal, but a pattern suggests a difficult living environment.
- Legal action — is the owners corporation involved in litigation? Building defect claims, owner disputes at NCAT, or actions against developers can be expensive and protracted.
- Developer involvement — in newer buildings, watch for items about builder defects, warranty claims, or the developer still controlling the committee.
Meeting minutes aren't exciting reading, but they're the most honest document in the report. They record what owners are actually worried about.
Red Flags to Watch For
Some issues are deal-breakers. Others are manageable. Here's how to tell the difference:
Serious red flags (proceed with extreme caution):
- Active or pending litigation involving significant building defects
- Capital works fund near zero with major works due
- Multiple special levies in the past 3–5 years
- Fire safety compliance orders outstanding
- Cladding remediation orders (can cost $50,000+ per lot)
- Building insurance premiums that have tripled or more
- No 10-year capital works plan
Yellow flags (investigate further):
- Levies that haven't increased in several years
- High levy arrears from multiple owners
- Frequent changes of strata manager
- Deferred maintenance items repeatedly appearing in minutes
- Poorly attended AGMs (suggests owner disengagement)
- Developer still on the committee in a building more than 2 years old
For more detail, see our article on 5 red flags in NSW strata reports.
Financial Health Indicators
Here's a quick checklist to gauge a building's financial health:
| Indicator | Healthy | Concerning |
|---|---|---|
| Admin fund balance | 3+ months of expenses | Below 1 month |
| Capital works fund | On track with 10-year plan | Significantly underfunded |
| Levy arrears | <5% of annual levies | >10% of annual levies |
| Insurance trend | Stable or modest increases | Doubling year-on-year |
| Special levies (5 years) | None or one planned | Multiple reactive levies |
| Capital works plan | Current, by qualified surveyor | Outdated or missing |
Getting Help with Your Strata Report
A 300-page strata report can be overwhelming, especially if it's your first time. You have a few options:
Read it yourself — with the knowledge from this series and our detailed strata report reading guide, you can absolutely do this. It takes time (allow 1–2 hours), but you'll learn a lot about the building.
Ask your solicitor or conveyancer — they'll review the legal aspects (by-laws, compliance, litigation) but may not provide detailed financial analysis.
Use StrataChecks — upload your strata report and get an AI-powered analysis that highlights the key findings, flags potential issues, and helps you understand what the numbers mean. It's designed to complement (not replace) professional advice by making the report accessible and actionable.
Got a strata report you need to make sense of?
StrataChecks analyses your strata report and highlights the things that matter — fund balances, red flags, special levies, and building issues — so you can make an informed decision without spending hours reading hundreds of pages.
Try StrataChecks →Next in the Series
In Part 5: Common Strata Issues & How to Handle Them, we cover the problems that actually come up in strata living — building defects, by-law breaches, insurance gaps, and how disputes get resolved when things go wrong.