Strata Due Diligence Checklist for NSW Buyers (2026)

Buying a strata property in NSW is genuinely different from buying a freestanding house. When you buy an apartment, you are not just buying your own lot — you are buying a share of the entire building and joining an owners corporation with shared financial obligations. A leaking roof, an underfunded capital works fund, or a long-running NCAT dispute can cost you tens of thousands of dollars you never saw coming.

This checklist covers every material thing you should investigate before committing to a strata purchase in NSW. It is organised in order of importance — so if you are short on time, start at the top.

All of these checks draw on information in the strata report (Section 182 inspection) and related documents available to buyers before exchange. A strata report from a third-party provider typically costs $200–$350 in NSW — one of the best investments you can make on a purchase worth hundreds of thousands of dollars.

Why Due Diligence Matters for Strata

When you buy a freestanding house, the risks are mostly contained to that property. If the roof leaks, that is your problem — but it is also only your problem. With strata, the financial risks extend to the entire building and all of its common property.

Under the Strata Schemes Management Act 2015 (NSW), lot owners are collectively responsible for maintaining all common property. That includes the roof, external walls, lifts, car parks, gardens, fire safety systems, and more. When the capital works fund runs out, owners must contribute — whether they can afford to or not.

The core difference from a house purchase is this: you cannot inspect your way out of strata risk. A pre-purchase building inspection tells you about the physical condition of your lot. Only a proper review of the owners corporation's records tells you about the financial condition of the building and the behaviour of the people who run it.

The ten checks below cover both. Together, they give you a complete picture of what you are buying into.

The Complete Strata Due Diligence Checklist

1. Check the Strata Plan and Lot Entitlements

The strata plan is the foundation document that defines what you are buying. It shows the boundaries of your lot, the location of common property, and each lot's unit entitlement. Unit entitlement is critically important because it determines:

• How much you pay in levies. A lot with higher unit entitlement pays a larger share of every levy — including special levies.
• Your voting weight at general meetings (for certain types of motions).
• Your share of any surplus if the owners corporation is wound up.

Cross-check the strata plan against the contract of sale to confirm the lot number and boundaries match what you are actually buying. Mixed-up lot numbers are rare but they happen, particularly in buildings that have been subdivided or modified.

You can find a strata plan number in NSW via NSW Land Registry Services. Access to full strata plan documents typically costs $30–$60 through NSW LRS or a search agent.

2. Review Meeting Minutes (Last 2+ Years)

If you only read one section of the strata report carefully, make it the AGM and EGM minutes from the last two to three years. Meeting minutes are where the real story of a building lives — every recurring maintenance problem, every contentious vote, every hint of financial pressure will appear here before it shows up anywhere else.

What to scan for:

• Recurring issues. If "water ingress Level 4" appears in three consecutive AGMs with no resolution, that is a systemic waterproofing failure waiting to become a very large bill.
• Motions for special levies — whether passed or defeated. Even a failed motion tells you the committee considered the building's finances insufficient.
• Strata manager changes. Frequent turnover often indicates a difficult building or a dysfunctional committee.
• Builder defect claims, particularly in buildings under 10 years old. Note the defects alleged and the current stage of proceedings.
• Sharp insurance premium increases, which signal higher risk in the eyes of the insurer.
• Owner disputes and by-law breach notices, which paint a picture of the building's culture.

Practical tip: read the minutes in reverse order, starting with the most recent AGM. This gives you the current state of affairs before you wade through historical background.

3. Examine the Financial Statements

The owners corporation maintains two funds. Understanding both is essential.

The administrative fund covers day-to-day expenses: cleaning, gardening, common area electricity, lift maintenance contracts, insurance premiums, and strata management fees. It should run at a small positive balance each year.

The capital works fund (formerly called the sinking fund) is the building's savings account for major long-term expenses: roof replacement, facade painting, lift overhaul, waterproofing remediation, and pipe relining. Under the Strata Schemes Management Act 2015, every owners corporation must prepare and maintain a 10-year capital works fund plan.

For a detailed guide to reading strata financials, see our post on how to read strata financial statements.

4. Look for Special Levies (Past and Upcoming)

A special levy is a one-off payment demanded from all lot owners to fund an expense the capital works fund cannot cover. They require a resolution at a general meeting and are calculated based on unit entitlement.

What to check:

• Has the building raised special levies in the last three to five years? How many, and for what purpose?
• Is there a special levy currently in effect? If so, will you be liable for remaining instalments after settlement? This needs to be negotiated in the contract.
• Are meeting minutes foreshadowing a future special levy? Phrases like "insufficient funds for upcoming works" or "committee to obtain quotes for major remediation" are signals.
• Was any special levy raised for work that remains incomplete? If so, the final cost may exceed the original estimate.

Special levies in NSW vary enormously — from a few thousand dollars for planned minor works to over $100,000 per lot for structural remediation or cladding replacement. In well-publicised extreme cases in Sydney's inner suburbs, owners have been asked to contribute several hundred thousand dollars. A pattern of multiple reactive special levies is a strong signal that regular levies are chronically insufficient.

5. Check for Building Defects and Outstanding Work Orders

Building defects are the single most expensive risk in NSW strata — and they are disturbingly common. The NSW Building Commissioner's office has found significant defects in a substantial proportion of newer high-rise buildings inspected.

What to look for:

• Active defect claims against the builder or developer. These are often mentioned in meeting minutes and correspondence. Note the nature of the defects, the current stage of the claim, and whether the building has external legal representation.
• Recurring water ingress complaints across multiple meetings without resolution. Water damage is the most expensive defect in strata buildings and tends to compound if left unaddressed.
• Outstanding work orders or notices from the NSW Building Commissioner, council, or NSW Fair Trading. These represent compliance obligations the building has not yet met.
• Engineer or building condition reports that may be included in the strata report. Any identified defects that have not been actioned are a liability you will inherit.
• Cladding issues. NSW has a combustible cladding register. Ask whether the building is on it and what stage any rectification is at.

For buildings constructed after 1 September 2022, the builder must have purchased decennial liability insurance covering major defects for 10 years. For older buildings, the statutory warranty period under the Home Building Act 1989 provides some protection — but pursuing claims can be expensive if the builder is no longer trading.

6. Review the By-Laws

By-laws are the rules that govern daily life in the building. They vary significantly between schemes and can materially affect how you can use your property. Before you buy, make sure the by-laws are compatible with how you intend to live.

Key areas to check:

• Pets. Since 2021, NSW strata schemes cannot enforce blanket pet bans — but they can require owners corporation approval and impose conditions such as size limits or floor covering requirements. Check what the actual approval process looks like.
• Renovations. Most buildings require owners corporation consent for renovations. Some restrict cosmetic changes, flooring types (hardwood vs. carpet due to noise), or external modifications. If you are planning significant works, read the renovation by-laws carefully before you buy.
• Short-term letting (Airbnb). Many Sydney buildings have adopted by-laws restricting or prohibiting short-term letting following NSW's 2020 short-term rental accommodation framework. Check both the by-law and your local council planning controls.
• Car parking. Is the car space you are buying on-title (a separate lot) or allocated under a by-law? By-law allocations can sometimes be changed by vote, which provides less security than a title-held space.
• Common area use restrictions. Some buildings restrict access to rooftops, courtyards, or BBQ areas. Check that the amenities the agent showed you are actually available under the by-laws.

By-laws also reveal the building's culture. A building with dozens of highly prescriptive by-laws, or a history of by-law breach notices against owners, tends to have a more litigious and difficult committee dynamic than one with a simple, standard by-law set.

7. Check Insurance Coverage

The owners corporation is required under the Strata Schemes Management Act 2015 to insure the building for its full replacement value and maintain public liability insurance for common areas. But "required" and "adequate" are not the same thing.

• Replacement value. Is the building insured for a realistic amount? Construction costs have risen significantly in recent years, and underinsurance is widespread in NSW strata. If the insured value looks low for a building of its size and age, ask when it was last professionally assessed.
• Excess amounts. Some buildings with poor claims histories have been forced to accept excesses of $50,000–$100,000 or more per claim. This means the building must self-fund any repair below that threshold.
• Premium trends. A sharp year-on-year increase in the insurance premium signals that the insurer considers the building higher risk — often because of claims history or known defects.
• Exclusions. Buildings in flood-prone or bushfire-prone areas, or with known unresolved defects, may have specific exclusions. Read the policy schedule carefully.

If the building's insurance is substantially inadequate and a major event occurs, every lot owner may be called upon to contribute to the shortfall — through a special levy or increased regular levies over an extended period.

8. Investigate the Strata Manager

The quality of the strata manager matters more than most buyers realise. A competent strata manager keeps financial records in order, enforces by-laws consistently, arranges maintenance proactively, and ensures the building stays compliant with its legal obligations. A poor one does the opposite.

How to investigate:

• Confirm their licence. All strata managing agents in NSW must hold a licence issued by NSW Fair Trading. You can look up a strata manager's licence on the NSW Fair Trading licence check.
• Check how long they have managed the building. A strata manager who has only been managing the building for six months may not be familiar with its history, ongoing issues, or pending compliance obligations.
• Look for complaints or disciplinary history against the managing agent via NSW Fair Trading.
• Review the management agreement terms, particularly the notice period required to change managers. Long lock-in periods with high exit fees can trap a building with a poor manager.

If the meeting minutes show repeated owner frustration with the strata manager, or a recent change in management company, that is worth investigating. Changing strata managers is possible but disruptive — see our guide on how to change a strata manager in NSW.

9. Look for Active or Recent NCAT Disputes

The NSW Civil and Administrative Tribunal (NCAT) is the primary forum for resolving strata disputes in NSW. Applications can be made by lot owners, the owners corporation, or the strata manager, covering everything from by-law breaches and maintenance failures to levy disputes and invalid committee decisions.

What to look for:

• Active NCAT proceedings involving the owners corporation — either as applicant or respondent. Legal costs come from the administrative fund.
• A pattern of disputes with the same lot owner. One persistently litigious owner can consume enormous amounts of the committee's time and the building's legal budget.
• Recent NCAT orders made against the owners corporation — for example, an order to carry out maintenance or repair. If the order has not been complied with, the building is at risk of further proceedings.
• Builder defect claims through NCAT. NCAT has jurisdiction to hear certain building defect disputes, particularly for residential building work. Check the nature of any such claims and their current status.

NCAT dispute history is a strong indicator of building culture. Buildings where owners cooperate and the committee acts reasonably rarely end up in NCAT repeatedly. Buildings that do end up there repeatedly tend to have systemic governance problems that are difficult for individual owners to change.

10. Check Compliance Certificates

NSW strata buildings must comply with a range of fire safety, health, and building code requirements. Non-compliance can result in notices and orders from council or NSW Fair Trading that the owners corporation must fund — and those costs are ultimately borne by lot owners.

• Annual fire safety statement. Buildings must submit annual fire safety statements to council confirming that all essential fire safety measures are maintained. Check whether these are current.
• Fire safety orders. If council has issued a fire safety order requiring upgrades, the building must comply — and the costs can be substantial. Check the correspondence in the strata report for any such orders.
• Occupation certificate. For newer buildings, confirm that a final occupation certificate was issued. Buildings without a valid OC may have unresolved defects that were never signed off.
• Outstanding council orders for any other compliance matters, including illegal structures or unapproved alterations to common property.
• Building Commissioner notices. The NSW Building Commissioner has expanded powers to issue notices and require rectification works for serious defects in class 2 buildings (multi-storey residential). Check whether the building has received any such notices.

Red Flags That Should Make You Think Twice

Any individual issue on this checklist may be manageable on its own. But certain combinations — or certain severity levels — should give you serious pause. These are the warning signs that experienced strata lawyers and conveyancers treat as potential deal-breakers:

Finding one or more of these does not automatically mean you should walk away. But it does mean you should:

1. Quantify the worst-case cost and confirm you can absorb it without jeopardising your financial position.
2. Seek specialist advice — a strata lawyer rather than a general conveyancer — on your legal exposure.
3. Use the information to negotiate the purchase price, or include a cooling-off clause that gives you time to investigate further.
4. Consider whether a property with a clean bill of health at a similar price might be a better investment over the medium term.

How Long Should Due Diligence Take?

NSW auction timelines are tight. Most buyers have fewer than three weeks from inspection to auction, and strata reports take three to seven business days to obtain from a third-party provider (or one to two days on express, at additional cost).

Here is a realistic timeline for a thorough pre-auction due diligence process:

Do not wait until the week of the auction to order a strata report. Some strata managers are slow to respond to report requests, and a five-day turnaround that starts on a Tuesday may not deliver your report until the following week. Order it the day after your first inspection if you are seriously interested.

Using StrataChecks to Speed Up Due Diligence

A thorough strata due diligence review can take three to five hours if you do it manually — reading hundreds of pages of meeting minutes, cross-referencing financial statements, and tracking down legislative references. Most buyers do not have that time, particularly when an auction is days away.

StrataChecks was built specifically for this situation. Upload your strata report PDF and get an AI-powered risk analysis in about 60 seconds, covering:

• Financial health assessment for both the administrative fund and capital works fund
• Automatic flagging of special levies, arrears, and fund underfunding
• Building defect and maintenance issue identification from meeting minutes
• By-law summary covering pets, renovations, and short-term letting restrictions
• Insurance coverage review
• Benchmarking against 88,000+ NSW strata plans so you can see how the building compares

This is not a substitute for legal advice on complex issues, but it is an efficient way to get a structured view of all ten checklist areas in one place — so you can spend your limited time on the specific issues that matter for your building, rather than starting from scratch on every page.

Frequently Asked Questions