Old apartments could be trouble, experts say
REAL ESTATE: THAT older apartment for sale may look retro – but experts warn Perth investors they may be buying into big problems. | Realestate WA |
THAT older apartment for sale may look retro – but experts are warning Perth homeowners they may be buying into big trouble.
Perth’s older apartment stock is becoming a problem as the buildings age and further and major issues present.
Local strata expert John Angus, author of Understanding Strata Titles, said a lot of the buildings built in the ’50s and ’60s were increasingly requiring more maintenance and often did not have the reserve funds to cover it.
He said while it was not compulsory for WA strata companies to have a reserve fund put aside for emergencies, other states had legislated for it.
Buyers could be slugged with thousands in unexpected maintenance costs once they’ve purchased.
"The older the development, the more likely there are hidden or future issues,'' Mr Angus said.
Welcome to the strata-sphere
He said one of the worst maintenance issues becoming more common in older buildings was "concrete cancer'' where the concrete erodes and the foundations could be seen.
"Many old developments haven't considered the future sufficiently and they don't have a reserve fund,'' Mr Angus said.
Strata Data WA founder Jeannette Anderson said people could sometimes come very unstuck if they bought into a complex without checking its financial history and maintenance requirements.
"They can have to fork out thousands for a special event if something goes wrong,'' she said.
Ms Anderson said buyers should check why the vendor was selling as they may just want to "bail out'' of maintenance costs.
Strata Communities Australia (WA) president Andrew Chambers said the problem was especially concerning as more and more people bought apartments.
Unfortunately there was no recourse for a buyer once they owned the strata lot, he said.
"Once you're already the registered proprietor, it's too late - the Strata Titles Act requires that the strata company (that is, all current owners in the scheme) must repair and maintain their building if and as required, regardless of whether you've been an owner for a day, a week, a decade, or more,'' Mr Chambers said.
There were several things buyers could check themselves or engage a professional to check for them, he said.
“When buyers enter into an agreement to purchase, the real estate agent has to disclose certain things,” Mr Chambers said.
“Provided they have the seller’s authority, they can also make an appointment to inspect the books and records.
“It’s not a very time consuming thing at all.”
Buyers could also ask if there were any major expenses coming up in the next 12 months, read the latest annual general meeting minutes to find out, visually assess the building and organise a building inspection.
Ms Anderson said it paid to do this even in a hot market when apartments were selling in a matter of days.