You buy into a shared building as well as an individual lot
NSW's buying guide explains that purchasing a strata lot also brings shared ownership of common property and membership of the owners corporation. The strata plan and by-laws matter when determining the boundaries of that responsibility. A roof, wall or pipe should not be assigned to an individual owner merely because it is near that owner's apartment. [1]
The practical implication is that your inspection has two subjects. One is the apartment you walk through. The other is the building that supports it: shared structure, services and facilities, together with the decisions and budgets for maintaining them.
A freshly painted interior does not tell you when shared waterproofing was assessed. Conversely, a plainly presented apartment does not establish that the building has financial problems. Keep cosmetic impressions separate from documentary and technical evidence.
Read the two funds for different purposes
NSW distinguishes an administrative fund for ongoing expenses from a capital works fund for capital expenditure. Day-to-day management and recurring operating costs sit in a different budgeting category from major replacement work. The government's finance guidance also recognises exceptions for some two-lot schemes. [2]
For an ordinary apartment scheme, ask for the balance and commitments of each relevant fund rather than a single combined cash number. An amount already allocated to another job is not automatically spare cash for the repair you are considering. Receivables from unpaid levies are also different from money already collected.
The capital works plan looks forward. NSW guidance describes a ten-year planning horizon and review at least every five years. The government's planner can be used to prepare and update the plan in its standard form. A plan is a forecast of work and funding; its existence does not certify that estimates remain adequate. [3]
A specific change took effect on 1 April 2026: new or revised ten-year plans must use the standard form. The NSW reform guide says a scheme with an existing plan need not change it to that form until it is revised or replaced. That distinction prevents an older document format, by itself, from being mistaken for evidence of noncompliance. [4]
A fictional repair shows why timing changes the answer
Imagine a scheme considering a roof project with an assumed all-in cost of AUD 300,000. Its capital works bank balance is AUD 120,000, but AUD 30,000 is already committed to another project. For this simplified model, only AUD 90,000 is available for the roof. Scheduled contributions of AUD 60,000 will be collected before the roof payment falls due.
| Item | AUD | What it means |
|---|---|---|
| Roof project assumption | 300,000 | Assumed total payable, including all project costs |
| Capital works balance | 120,000 | Cash before allowing for commitments |
| Already committed elsewhere | −30,000 | Unavailable for this project |
| Contributions collected before payment | +60,000 | Assumed received on time |
| Available for roof | 150,000 | 120,000 − 30,000 + 60,000 |
| Remaining funding need | 150,000 | 300,000 − 150,000 |
If the project instead becomes payable before those AUD 60,000 contributions arrive, the funding need at that earlier date is AUD 210,000. The cost of the roof has not changed. The date when cash is needed has.
For a second sensitivity check, raise the project assumption by 20%, to AUD 360,000, while keeping the original payment timing. The funding need is again AUD 210,000. These are separate scenarios: one changes collection timing, the other changes cost. Adding both changes together would produce a different result, a AUD 270,000 need, and should be labelled accordingly.
This model omits interest, borrowing costs, arrears, insurance recoveries, grants and other projects. Those are not assumed to be zero in an actual scheme. They are excluded to make the two mechanisms visible. Any real proposal would require updated estimates and a complete cash forecast.
A building total is not automatically your bill
NSW's levy guidance explains that contributions depend on unit entitlement, which can differ between lots. In our invented example, a lot with 25 of the scheme's 1,000 total entitlements has a 2.5% share. Applying that assumed share to AUD 150,000 gives AUD 3,750; applying it to AUD 210,000 gives AUD 5,250. [5]
These amounts illustrate an allocation, not an issued levy or a legal determination. Do not divide a building cost by the number of apartments unless equal allocation is actually appropriate. Ask for the proposed funding resolution, the relevant entitlements and the lot-specific notice.
The official guide distinguishes ordinary notice periods from urgent circumstances: standard and special levies normally require at least 30 days' notice, while an emergency-repair levy addressing a serious and imminent health or safety threat can require only 14 days. That is another reason a long-run average monthly allowance cannot replace an emergency cash plan. [5]
Make the records answer a connected set of questions
NSW recommends a strata search report before purchase. Its buying guide also describes the section 184 certificate, which includes levy information, outstanding levies for the lot and funding proposals for the capital works plan. Use these alongside the sale contract; have your solicitor or conveyancer explain any allocation of liability between seller and buyer. [1]
- Does the latest technical report describe a definite scope of work, or further investigation?
- Is the price a preliminary allowance, a current quotation or an accepted contract?
- Do the meeting minutes show approval, deferral or a request for more information?
- Does the funding forecast match the contractor's deposit and progress-payment dates?
- Are existing commitments and expected collections counted consistently?
- What would change for this lot if the timetable or cost moves?
These questions form an original reading checklist, not a building inspection. A funding gap does not, by itself, establish negligence, a defect or the eventual method of payment. Equally, a large reserve balance is not proof that every major obligation is covered.
Readers familiar with service charges in England and Wales will recognise the household-budget question, but NSW strata has its own ownership and legal structure. For another building-level issue to check before buying, see apartment electricity and embedded networks.
Method and limits: No private minutes, engineering report, budget or sale contract was obtained. The calculations are transparent scenarios, not allegations about a building. A specific purchase needs current scheme records and professional advice on the contract, technical condition and payment responsibility.
Read the underlying guidance.
- Buying a strata propertyNSW Government · checked 2026-09-28. Common property, strata search reports and section 184 certificates.
- Managing strata finances and insuranceNSW Government · checked 2026-09-28. Administrative/capital works fund distinction and two-lot exceptions.
- Capital works fund plannerNSW Government · checked 2026-09-28. Ten-year plan, five-year minimum review and planning tool.
- Guide to strata law changes for strata committees and ownersNSW Government · checked 2026-09-28. 1 April 2026 standard form requirement and exception for unchanged existing plans.
- Your strata levies, finances and insuranceNSW Government · checked 2026-09-28. Unit entitlement, normal 30-day notices and emergency 14-day levy notice exception; updated 22 June 2026.
Source and arithmetic checks by the producing AI, followed by a separate AI editorial review. Human English editing and subject-specialist review have not been completed. Authorised scheme budget, minutes, technical report and sale contract; human NSW legal and English review.
