Introducing risk assessment strata reports to New South Wales

Our project introduces a full-service strata reporting system to New South Wales.  It is dedicated to providing high quality risk assessment strata reports to buyers and their advisers.

These reports will be prepared by trained strata inspectors.   No longer will buyers and their lawyers and conveyancers receive reams of information compiled by untrained searchers to try and assess relevance.  Our system will use trained strata inspectors not only to identify the buyer relevant issues, but also to analyse and explain the implications of those issues for buyers and their advisers.

Difference to standard reports

The process of identification and analysis of buyer relevant issues sets apart our risk assessment reporting system from standard reports.  Standard reports only provide a collection of information that is sent to buyers and their lawyers and conveyancers usually without comment or analysis.  They then need to ‘go figure’ the issues and risks.

Metropolis reports take on this role in identifying, analysing and explaining the issues and risks for buyers and their advisers.   This is done by using trained inspectors and accredited specialists in related areas.

Metropolis inspectors unlike those searchers preparing standard reports, also examine by-laws in the contracts for sale of units.  This is to identify buyer relevant issues. These include by-laws where owners corporations require owners themselves rather than owners corporations to repair, replace and maintain certain fixtures and fittings (often called 'absolution of maintenance' by-laws).

They also include the implications of works by-laws that may have been passed many years before which impose ongoing obligations on buyers. A good example is the installation of an air conditioning unit in the subject lot. The by-law approving the installation will almost certainly include ongoing obligations on successive owners of the lot to repair, maintain and replace the unit.

Involvement of accredited specialists

Being full service means not only will we provide a wide range of risk assessment reports, we will also give buyers and their advisers access to accredited specialists in related areas such as strata law, fire safety, building inspections, work health and safety and asbestos.

These specialists have been trained in how our reporting system operates.  That means our reporting system will provide a seamless service that can assist buyers to better understand concerns that may be identified in our reports.

Articles containing buyer related information

Because laws and operational practices relating to the management of strata complexes have become more complex over recent years, we have prepared many articles to include in our reports to explain the implications of those laws and practices. For instance, if the owners corporation is a member of a building management committee, an article explaining why an inspection of the records of this committee is important to buyers is included in the report.

We have also prepared many other articles to be included in our reports where we identify issues of concern.  For instance, if there are building defects or fire orders, articles explaining the buyer related consequences arising from issues of this kind are included in the report.

All articles will be signed off and maintained by specialists in the relevant areas. For example, articles relating to fire orders will be signed off and maintained by fire safety specialists. Here is a link to some of those articles.

Articles made available for lawyers and conveyancers to give to clients

To assist lawyers and conveyancers advise their client buyers on strata related issues, we have prepared articles of general interest to buyers. Those articles can be adapted by Metropolis client law firms and conveyancers using their own personal details and branding.

The articles can then be used by them as handouts in waiting rooms or offices. They can also be used in their newsletters.

Examples of the range of articles include, why buyers should obtain a strata inspection report, guidance for buyers who want to renovate or keep pets, special issues buyers need to keep in mind when they buy into factory and other types of complexes which have been converted to strata accommodation, and guidance for buyers relating to age related issues when they buy into older strata complexes.

Those articles will be signed off and maintained by experts in the relevant areas. For example, articles relating to keeping of animals and renovating will be signed off by specialists in strata law and will be kept up to date by them.

Contracts for sale, clauses in leases and precedent correspondence related assistance

To help lawyers and conveyancers provide the best possible service to their buyer clients we also provide:

• example wording that can be used for their consideration to include as special conditions in contracts of sale to deal with buyer related issues. Those issues include special levies, as well as warranties as to works undertaken or breaches of by-laws by owners;
• commentary on preparing clauses in leases to deal with issues that may be identified in our reports. Those issues could include the tenant providing access for remedial works to be undertaken in the lot the buyer is purchasing, and issues relating to compensation payable to tenants for disturbance arising from rectification of building defects; and
• precedent letters to strata managers to seek further information that was not provided to our inspectors.

Toolkits

To provide a vehicle to hold all this information for owners corporations, we have created a toolkit. The toolkit contains all the information referred to above. It will be used by us and our licensees to not only include relevant information in our reports, but also to provide all the other services referred to above.

In fact there are 4 toolkits. One each for owners corporations, community associations, neighbourhood associations and company title complexes. We will provide risk assessment reports to buyers across each of these sectors of multi occupancy residential and commercial accommodation in New South Wales.

To give some idea of the nature, extent and depth of the advice provided, here is a link to background information on how the toolkits are used and a list of the resources in the owners corporation version of the toolkit.