Building Inspection Services in Sydney

What does the AS 4349.1-2007 Pre-purchase building inspections— Residential buildings cover?

Below is an extract form the Australian standards and the minimum requirements from the building inspectors. Once you read through you will see its not very much at all. This is why its so important to choose a building inspection company who will go above and beyond the minimum requirements.

Forward

The purchase of residential property is an important decision and should be supported by knowledge of the physical state of the property. Independent and objective advice is often required to enable informed decisions. It is implicit in this Standard that the inspection includes subjective appraisal by an inspector competent to assess the condition of residential buildings. It is not expected that this Standard will be relevant where an inspection involves wholly objective application of a prescribed technique of appraisal. In any subjective application it is inevitable that different inspectors or even the same inspector, on a different occasion, may reach different conclusions. The Standard seeks to provide an appropriate balance between reliability of outcomes, economic constraints and the flexibility required to address numerous different types of residential building. The inspection is not intended to include rigorous assessment of all building elements in a property.

Areas to be inspected

The inspector shall inspect accessible parts of the building and appurtenances, together with relevant feature of the property within 30 m of the building and within the boundaries of the site, or as otherwise agreed in the inspection agreement. In this context, relevant features include car accommodation, detached laundry, ablution facilities and garden sheds, retaining walls more than 700 mm high, paths and driveways, steps, fencing, earth embankments, surface water drainage and stormwater run-off. Inspection of Strata and Company Title residential property shall be limited to the nominated residence and does not include common property. NOTE: Further information regarding inspection of Strata and Company. The following areas shall be inspected where applicable: (a) The interior of the building. (b) The roof space. (c) The exterior of the building. (d) The sub-floor space. (e) The roof exterior. (f) The property within 30 m of the building subject to inspection.

Disputes

Many disputes between the client and inspector occur because the client did not expect the inspection to be subject to some form of limitation. In order to avoid such disputes, it is necessary that the inspector, who is normally the more knowledgeable party, inform the client during the agreement phase of limitations that may restrict the full achievement of the client’s purpose of inspection. The opportunity to inform the client prior to the inspector’s visit to the property is limited and there will always remain the possibility of unexpected limitations that will be apparent only when the inspector visits the property; however, it is important that the client have a realistic understanding of the inspection limitations prior to the inspection. Examples of expected limitations include legal right of entry, locked doors, security system, pets, furniture and similar obstructions, while these are common and expected limitations, the inspector should not assume that the client is aware of the significance of the various factors, but rather should inform the client. Examples of limitations that may not be expected at any particular inspection, but which are common, include access restrictions due to height or narrow boundary clearance, thick vegetation, small roof or crawl space and adverse weather conditions. It is not practicable for the inspector to anticipate and inform the client of all possible limitations that may be present when the inspector visits the property; however, the client should have an appreciation, during the agreement period, of the types of limitation that may occur.

Above is a brief description of what you can expect from your average Building inspector as Per Australian Standards.

We highly recommend you select an inspector who will go above and beyond the minimum requirements to inspect all areas of the home and not just comply with the Australian standard Guidelines.

What Does AS 4349.3-1998 timber pest inspections cover?

The basis of this Standard is a non-invasive inspection comprising visual inspection supplemented by non-marking sounding of elements and assessment of moisture content of materials. The Inspector might decide to supplement this type of inspection with other non-destructive techniques or equipment, depending on the particular circumstances; however, the use of such further equipment is beyond the minimum requirements of this Standard. The nature of timber pest activity and non-invasive inspection is such that some residual damage is inevitable in some cases. For the purposes of this Standard timber pests that damage timber are subterranean and damp-wood termites, borers of seasoned timber and wood decay fungi. This Standard does not require inspection and report on drywood termites or mould.

The purpose of a timber pest inspection on a property is to assess the following: (a) Evidence of timber pests. (b) Existence of visually observable damage caused by timber pests. (c) Susceptibility of building to timber pests. (d) Further investigations required. NOTE: Regular, competent inspections are strongly recommended, at least on an annual basis. Where justified, more frequent inspections may be recommended, e.g. in situations considered more conducive to timber pests. 1.2

Limitations of Standard

A report prepared in accordance with this Standard is not a certificate of compliance of the property within the requirements of any Act, regulation, ordinance, local law or by-law, and is not a warranty against problems developing with the building and/or the site in the future. This Standard does not include the identification of unauthorized building work or of work not compliant with building regulations.

Scope of Inspection

General The inspection shall comprise non-invasive inspection of the property for timber pest activity as set out below. A pre-purchase timber pest inspection shall include non-invasive inspection for all timber pests in accordance with this Standard. A routine timber pest management inspection shall comprise non-invasive inspection for timber pests in accordance with this Standard. In this context a routine inspection is deemed to be one undertaken on a site where timber pests are not known to be present. Where inspection is required beyond the scope of the inspections described above, for example in accordance with the Client’s requirements, to confirm the presence of an infestation or to determine the extent of an infestation or treatment required, invasive inspection and/or the use of specialized equipment or techniques normally will be necessary. In this case the agreement shall include the proposed scope of inspection, including the extent of interference with the building fabric and details of equipment or techniques to be used. An estimate of the cost of treatment of timber pests or of repairs to damage caused by timber pests is not included in an inspection report in accordance with this Standard.

Areas for Inspectrion

The inspection shall include all accessible areas of the site and does not include areas that are not accessible. The Inspector shall determine the extent of accessible areas at the time of inspection, based on the conditions encountered at the time of inspection. The client shall arrange right of entry, facilitate physical entry to all parts of the property and supply necessary information to enable the Inspector to undertake the inspection and prepare a report. The Inspector is not responsible for arranging entry to the property or parts of the property. NOTE: Areas that are not accessible at the time of inspection may be the subject of an additional inspection following the provision of access.

Above is a brief description of what you can expect from your inspector as Per Australian Standards for AS4349.3 Timber Pest Inspections

We highly recommend you select a LICENSED Pest Controller who will go out of his way to inspect all areas of the home and not hide behind the Australian standard Guidelines.

Licensed, experienced and reputable Pest Manager will know where to look and what to look for. They inspect and treat termites on daily a basis.

What is Section 182 Strata Search?

Legislation requires that certain records and accounts be kept and maintained by the owner corporation.

Below is what you could expect to find in your strata search.

• Strata Roll
• Levy Register
• Common Seal
• S184 Strata Information Certificates
• Minute Book(containing the minutes of all meetings held)
• Cash Books (for cash payments & cash receipts)
• Receipt Book
• Passbook, bank deposit book
• Annual Budget details for each strata scheme
• Detailed Accounting Records (split into the administrative & capital works funds)
• Financial statements
• Payment plans for unpaid levy contributions
• Notices of recovery action for unpaid levy contributions, interest or expenses
• Register of all notices & orders
• Voting papers relating to motions for resolutionsby the Owners Corporation
• Voting papers relating to the election of the Strata Committee
• Proxy forms delivered to the Owners Corporation
• Notices of meetingsof the Owners Corporation & its Strata Committee
• Copies of correspondence received and sent by the Owners Corporation

Why must accounts and records be kept up to date and why would you the buyer want to know?

Apart from having to comply with legislation, assist with taxation and auditing requirements, provide valuable details in disputes as well as allowing others to determine ‘how a scheme is going’, prospective purchasers of units in the Strata Scheme need the records and accounts to be correctly maintained to show them they aren’t ‘buying into problems’.

Buying into problems? Buying a unit, villa or any property that has a strata scheme  means all costs for repairs are shared with all owners.

Do you want to buy into a problematic building that has constant repairs?

Buying into a building that has been poorly build could end up being a money pit!

The strata search will show you what repairs have happen throughout the years and accounting records and how much is in the owners’ funds.

What is a Section 184 Strata information Certificate?

This is a certificate, issued by the Owners Corporation or the Strata Manager (if one is being used), showing a whole lot of details about the strata scheme – like who’s involved in the running of the strata scheme, a variety of different financial and insurance details, by-law information as well as details on any outstanding debts or expected future outgoings on the property, plus more.   Normally it’s requested by prospective purchasers usually via their solicitor.

For a snapshot of what’s actually on the certificate look a couple of paragraphs directly below here.

Details shown on the certificate must include:

• insurance cover
• Strata Committee members
• any Strata Managing Agent or Building Manager information
• current levy contributions
• any outstanding levy amounts or other amounts plus the interest rate charged (if applicable)
• any special levies
• where the books and records for the scheme are held
• full details of any insurance coverage
• details of how the 10 year capital works fund will be funded
• any by-laws approved by the Owners Corporation but NOT lodged within 6 months before the date of the certificate

How to gain clarity on where your strata levies are really going?

A common misconception is that the levies paid by owners of apartments are going to the Strata Management company that looks after the building.  Many people believe that the strata company sets the amount, is responsible for any increases, and generally doesn’t do much for receiving such large fees.

While it’s easy to see why many people would make this assumption, the fundamental flaw in this thinking, is the lack of understanding that apartments, like houses need to be maintained.  Generally, it won’t cost as much as a house because the group of owners are pooling their money together, however there is still a cost.  The gutters need to be cleared, common areas need to be cleaned, machinery such as pumps in the carpark need to be serviced, plumbers and electricians need to attend as issues arise to name a few.  As with having home insurance, there is also building insurance that needs to be taken out.  There is also a requirement by law that the building keeps a capital works fund of money for major works that may be required such as repainting the building. All of these items are paid for out of the owner’s levies.

The truth is that the strata company is only the custodian over the funds.  They simply manage the money on behalf of the Owners Corporation (owners in the building), to ensure that the building is maintained adequately, to protect asset growth for all owners.  The fee that the strata company takes is usually around 8-10% of the overall levy amount (the maintenance is usually 45-50%) and is paid for services such as; co-ordinating repairs and maintenance, facilitating building compliance and legal requirements, project management, managing and chairing the Annual General Meeting, collecting levies, issuing debt recovery notices, paying building bills, Accounting (tax returns & BAS), managing and issuing keys, secretarial tasks and being the communication point of contact.  The details of any fee’s going to the strata company are required by law to be clearly set out in the management agreement which is agreed upon appointment for the engagement of these services.

It is recommended that if you are interested in understanding what your strata levies are being used for, there are a number of actions you can take.  Most strata managing agents will have a portal that you can gain access to which will provide details in relation to expense reports and invoices paid by the building.  This will give you a feel for what the major expenses are.  You can also nominate yourself to go on the Strata Committee (represented group of owners that make the day-to-day decisions).  The committee is elected at the Annual General Meeting, so you would first need to find out when yours is scheduled.  Doing this will give you a better understanding on the works being undertaken and the expenses incurred.  You will also have greater control as a nominated committee member in relation to these decisions.

There are laws to protect owners’ funds and ensure that the strata company isn’t misappropriating the funds.  The funds are required to be reconciled daily, and can be independently audited (this is mandatory for larger buildings and at the instruction of the Owners Corporation for smaller buildings).  The strata company must provide access to the financial information of the building for any owner (usually provided via the portal).  Most strata companies are ethical and want transparency so that they develop a relationship built on trust.  However, if you don’t like something that you see in relation to what the money is being spent on, or believe that information is being deliberately withheld, it’s best to take it up with a nominated member of the Strata Committee and then the strata company before taking further action.  If you are still unsatisfied, there are legal avenues that you can take via NCAT.

Whilst it’s easy to see how at a glance the strata management company could be assumed to be responsible for taking or hiding the levies paid by apartment owners, an understanding of how much it costs to maintain a building will quickly put this assumption to rest.

With a greater informed understanding of the small % of funds that the strata company takes of your levies, the biggest costs savings can often come in investing in a slightly more expensive expert and professional strata company to manage the other 90-92% of the funds on your behalf.