This past year we have received a number of claims that involved properties on strata title. We have realised from these claims that there is some confusion as to the scope of the inspection of these properties.
In part, Appendix B of AS4349.1-2007 states:
- With strata and company title properties, the inspection is limited to the interior and the immediate exterior of the particular residence to be inspected, as that is the extent of the individual property, and does not include review of body corporate or similar records.
- An inspection of all strata and company title common property, including the interior of every unit, would need to be carried out to determine the extent of any defects in the whole of the common property. Where clear evidence of major defect is apparent during the inspection in accordance of this Standard, the inspector should advise the client to obtain an inspection of common areas. Emphasis added by the author.
With regard to strata and commercial pre-purchase inspections, Rapid Solutions adopts the following position on the scope of the inspection:
- The immediate exterior of the building; Note: restrictions placed upon inspectors by WHS regulations etc. will mean that anything above the ground floor would be viewed from a distance and reported accordingly. This will include identifying the limitation/restrictions of this part of the inspection or excluding the area if it cannot be inspected.
- If there is a subfloor and/or roof void the recommendation is to enter these areas but restrict the inspection to the areas of the unit to be inspected. You may then view the remaining units from the confines of the unit to be inspected; however entry to another unit's areas should not be made. I.e. if you see a defect in another unit while inspecting the roof void, subfloor or exterior of the unit to be inspected you should report what you see, recommend that the purchaser inspect the strata records and have a common property inspection conducted to AS4349.0-2007. This recommendation is due to the likelihood that the purchaser will be liable to contribute to the repair costs of defects identified in the other units or common areas.
- If you pass through common areas to gain access to the areas of the individual unit that is to be inspected and you identify defects or safety hazards; you should report them and recommend that a strata title record and a common area inspection be carried out.
As there are different interpretations of what the Standard implies and what the land title may or may not allow you to do in a pre-purchase inspection it is recommended that you familiarise yourself with Appendix B of AS4349.1-2007.
When arranging strata or company title inspections we recommend that you make enquiries of the purchaser as to the actual property included in the title. This will enable you to clearly define the scope of your inspection in the agreement.