Some people are so enamoured by such a property that they take everything at face value and push to close the deal as soon as possible. However, history may be able to reveal multiple reasons for caution, especially if you don't feel like you confidently understand the process. This is the main reason why you should commission a pre purchase strata report. What pitfalls could be awaiting you, if you're not careful?
Reasons to Be Careful
Sometimes, the opportunity to buy a unit within a very small complex comes onto the market. As a potential buyer, you may think that this type of property should be relatively easy to run and shouldn't present any ongoing problems to any of the unit owners. You may wonder what challenges can arise due to the diminutive nature of the building and may decide to push ahead without further delay.
Watch Out for Unit Entitlement
However, smaller properties can create larger problems, depending on the configuration of each unit and how many voting rights each particular owner retains. As it's not unusual for an owner to have more than one unit within a building, you may find that a single owner ends up with a majority position due to multiple ownership and a greater share of unit entitlement.
In this case, you may always find that you are outvoted by one party, as they may stamp their authority on the management of the building at each annual general meeting. If this person is generally unreasonable then your ownership experience will be subpar, to put it mildly. You may have some valid grievances but not be able to hear them, let alone get any satisfaction.
What About the Managers?
Certainly, you might turn to the management company appointed to oversee the operation of the complex, but they can only work with what they've got. They may not be able to overcome any obstacles put in their way by the aforementioned owner.
Always Get the Report
The moral of this story is clear. You must commission a pre purchase strata report for any opportunity you're looking at, no matter how simple or relatively small the project may be. This type of report will undoubtedly expose problems related to an owner who has majority unit entitlement and you will be able to make your decision accordingly. Contact related resources or companies if you have further questions.