Buying A Strata Apartment? Investigate Before You Commit

Buy into a large complex managed by strata, and you take on a share of the whole building problems, including repair bills that can climb into the millions, for defects you never caused. Here’s why “buyer beware” carries real weight in strata, and why the time to investigate is before you commit, not after.

Picture this. You’ve bought your apartment, moved in, and finally settled into the life you saved years for. Then a letter arrives from the owners corporation. The building has serious defects, the repair bill runs into the millions, and your share of it is tens, possibly hundreds of thousands of dollars. You didn’t build the place. You didn’t cause the cracks. But because you own an apartment in it, the law says you help pay.

This isn’t a rare nightmare dreamt up to scare buyers. It’s one of the most common and least understood risks in Australian apartment living, and it plays out somewhere in Sydney more often than most people realise. It’s also exactly why “buyer beware” means something very specific when you’re buying into a large complex managed by strata, and why the smartest move a buyer can make happens before they sign the contract.

When You Buy Into Strata, You Can’t Opt Out Of The Bill

This is the part that catches people off guard. Buying into a strata complex isn’t like buying a freestanding house, where the problems you inherit are your own to deal with on your own terms. In strata, you become part of an owners corporation, a collective that jointly owns and is jointly responsible for the common property. If the building needs $7.5 million of work, that liability is shared across the owners, and there is no clause that lets a single owner say, “not my problem.”

You can’t negotiate your way out of it after the fact, and you usually can’t sell your way out of it either, because buyers avoid defect-affected buildings or slash their offers. In practical terms, all of your leverage exists at one moment only: before you commit. That’s the moment you can still ask questions, read the records, and walk away. Once you’ve exchanged, that door closes.

How One Owner Ends Up Owing Six Figures

When you buy a strata apartment, you don’t just buy the space inside your four walls. You also buy a share of the common property, the roof, the facade, the waterproofing, the basement, the lifts, the fire systems. That share comes with a share of the responsibility to maintain and repair all of it.

So, when a major defect surfaces, the owners corporation (all the owners together) must fund the fix. It does this by raising a special levy: a one-off or staged payment on top of the regular quarterly strata fees. The total cost is divided across every owner, usually in proportion to unit entitlement, so a larger apartment carries a larger slice. On a multi-million-dollar job, individual bills routinely run into tens or hundreds of thousands of dollars.

If owners can’t pay a lump sum, the owners corporation may take out a strata loan and spread the repayments, with interest, over several years. Either way, the money comes from the owners.

Why Do Buildings Need Such Expensive Repairs?

The defects driving these bills are rarely cosmetic. The recurring culprits are the parts of a building that are expensive and disruptive to put right:

• Water leaks and failed waterproofing, especially in bathrooms, balconies and basements
• Structural damage, including concrete spalling (rusting steel inside the concrete)
• Balcony and facade deterioration
• Fire safety deficiencies and non-compliant cladding
• Building work that never met the standards it was signed off against

These problems often stay hidden for years. A building can look immaculate at an open home while the failure is quietly developing behind the render or under the tiles. A pre-purchase building inspection can catch some of the physical warning signs, but many of the most expensive strata defects live in the shared structure and only reveal themselves in the building’s records.

Why Doesn’t The Builder Or Developer Just Pay?

It’s the obvious question, and the answer is where the system fails owners. In practice, the people responsible frequently can’t be made to pay because:

• The building company has gone into liquidation, sometimes deliberately wound up and re-started under a new name
• Statutory warranty periods have expired by the time the defect emerges
• Legal action is slow and expensive, and can drag on for years
• Even a courtroom win is worthless if the builder has no assets left to recover

The Knock-On Effect: Stuck, and Unable To Sell

The financial squeeze is brutal because it stacks. Owners keep paying their mortgage. They keep paying regular strata levies. Then the repair levy lands on top. And the one release valve most people rely on selling up is often closed, because buyers steer clear of defect-affected buildings, or only offer sharply reduced prices. Owners can find themselves trapped in an asset that has lost value precisely when they most need to move.

Why This Matters Right Now in NSW

This isn’t a rare horror story. A NSW Government review found that more than half of apartment buildings registered between 2016 and 2022 had at least one serious defect. The scale of the problem is exactly why NSW has been steadily tightening the rules around strata.

6 Years

Extended limitations period now applying to certain strata defect claims.

From 1 April 2026, reforms under the Strata Schemes Legislation Amendment Act 2025 require owners corporations to use a standardised, forward-looking 10-year capital works fund plan. The intent is to force buildings to budget honestly for major repairs, so owners are less likely to be blindsided by sudden special levies. For a buyer, these documents are gold: a well-funded plan is reassuring, while a thin capital works fund sitting under an ageing building is a warning sign worth taking seriously.

Before You Buy: Your Strata Due-Diligence Checklist 

You can’t control how well a building was constructed years before you looked at it. What you can control is how thoroughly you investigate before you commit and in a large complex, where the shared repair bill is spread across common property you’ll part-own, that investigation matters even more. Here’s what should be examined on any strata purchase, every time, before you exchange contracts:

What To Review Before You Sign:

The warning signs are rarely obvious. A single line buried in a set of minutes, or a suspiciously low balance in the capital works fund, can be the difference between a sound purchase and a costly surprise. That’s why these records reward careful reading, not a quick skim, whether you do it yourself or have someone act for you.

Questions Strata Buyers Ask

What is a special levy?

A special levy is a one-off or staged payment raised by the owners corporation, on top of your regular strata fees, to fund a major cost such as building repairs. The total is divided across all owners, usually by unit entitlement, so on a large repair job an individual bill can reach tens or hundreds of thousands of dollars.

Why can’t the builder or developer be forced to pay?

Often the building company has gone into liquidation, statutory warranty periods have expired, or legal action is too slow and expensive. Even when owners win in court, they may recover little or nothing if the builder has no assets left which is how the cost ends up back with the owners.

Does strata insurance cover building defects?

Generally no. Strata insurance typically covers events such as fire or storm damage, not the cost of rectifying construction defects themselves. When the developer is insolvent, owners are often left with no one to recover the repair cost from.

What should I check before buying into a strata complex?

Get a thorough strata records inspection, read the meeting minutes for any mention of defects or proposed special levies, look for engineering and fire-safety reports, ask whether legal action against the builder is ongoing, confirm whether major works are planned, and review the capital works fund and 10-year plan, all before you exchange contracts.

The Bottom Line

Owners caught in these situations did nothing wrong, yet the law still made them responsible for a bill they didn’t create. When the builder can’t be made to pay, the cost falls on whoever owns the apartment and that could be you. The best defence isn’t luck. It’s investigating the strata records properly, before you sign.

More on the Blog

Building inspections
What a pre-purchase inspection can and can’t tell you before you buy.

Protecting yourself from property scams
How to keep your money safe through a property transaction.

You’ll find these and other plain-English guides in the blog section of our website.

Alexis Conveyancing is with you every step of the way. 

Disclaimer: This article is general information only and does not take into account your individual circumstances. It is not legal or financial advice. Strata law and building regulation change over time. Before making any property decision, seek advice from a licensed conveyancer or solicitor about your specific situation. Figures used are illustrative. Alexis Conveyancing is a licensed conveyancing practice operating in New South Wales.