Strata Schemes Q&A with Chris Curtis

Written by Sebastian | Nov 28, 2024 3:26:20 AM

Legalwise sat down with Chris Curtis, Principal of Curtis Associates, a distinguished lawyer and seasoned property expert, to discuss the intricacies of strata schemes. With decades of experience in residential, commercial, and investment properties, Chris shared insights into due diligence, practical challenges and critical takeaways, offering invaluable advice for navigating the complexities of the strata title landscape.

What key differences should advisers be aware of when acting for clients purchasing residential versus commercial strata title properties?

Due Diligence and Obligations A: Same fundamental principles as both are regulated by the same legislation. But can be permutations in practice with commercial; examples being on resident Building Managers, heritage features preventing for example, non demolition of internal walls, transferable air space rights in the CBD, collective sales in conjunction with consolidating sites with neighbouring commercial buildings to achieve enhanced FSR and height limits. Also, commercial strata more likely to involve expensive strata loans which can be problematic and reduce Lot value.

Why is it important not to rely on a vendor’s strata report when advising a purchaser?

The peace of mind knowing that a purchaser sourced report has a built in independence of the vendor and as has happened with the independent strata searchers to whom we refer clients may also have a relationship with Strata Manager personnel and so get some information outside the ‘white file’. Outside of that, given the cost effective vendor provided report business models leading to privity of contract between that searcher and the successful purchaser with attendant PI exposure for the searcher, the distinction has over time has become one more of form than substance as reinforced by the disclaimers in all Strata searcher’s retainers whether vendor provided or purchaser sourced and what are the key documents that advisers should independently review? False premise in this part of the question as document access is usually curated both by the Strata Manager and the OC whether the strata report is vendor provided or independently purchaser sourced: streams don’t rise above their source.

What additional checks and searches should advisers recommend when acting for a purchaser in a strata title transaction?

In addition to comparable sales evidence and vendor reason for selling, our DD check list includes: neighbour, police, Council, Australia Post worker interviews, DA/CDC searches, major infrastructure works, pollution risks especially from unfiltered motorway ventilation stacks, contamination, inundation/flooding/climate change risks, other regulatory risks including TOD, public housing and boarding houses, drug issues, crime rates, flight paths, public transport access, heritage issues, electro magnetic radiation, flammable cladding, concrete cancer, strata consolidation risks/opportunities, view, privacy and light loss risks, unit entitlement oppression risks, tied contracts, percentage owner occupied v rented, building harmony, short term accommodation, levies arrears history and reserves, OC politics/harmony, influence of consultants and Strata Manager over OC, Also, these days, we are more often recommending Building and Pest Reports for strata especially to assess waterproofing issues, renovation potential, load bearing walls etc.

Can you share any examples where thorough due diligence led to significant issues for a purchaser in a strata title transaction?

None on our watch in 18 years. Speaking for others: In addition to concrete cancer risk mentioned in our PowerPoint, inundation risks owing to climate change induced sea level rises in Rushcutters Bay, Wooloomooloo and Rose Bay, dividing walls not taken to underside of slabs causing inter Lot noise transmission in a prestige CBD building, flammable cladding and waterproofing issues in Glebe and several other Sydney prestige residential strata buildings, structural and cracking risks from Western Harbour Tunnel excavation in Waverton and Birchgrove strata buildings, major soil and water contamination in risks in Millers Point, Barangaroo and Waverton.

Join Chris Curtis on 3rd December for the Strata Schemes: Lessons for Advisors to Purchasers, where he’ll share expert insights, practical tips and strategies for navigating strata title transactions.

Don’t miss this invaluable session—click here and register now!

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Chris Curtis, BA LLP, AAPI Certified Property Practitioner, Principal

Chris Curtis is an Australian lawyer with over three decades Australia wide experience as a buyer, seller and developer of residential, commercial, investment and hospitality properties including Australia’s biggest Gay nightclub, the iconic ARQ Sydney. A full-time, exclusive buyers’ agent since 2007 and an Associate of the Australian Property Institute and Certified Property Practitioner, he has consistently been setting new standards in helping buyers realise their property aspirations.

Between April 2013 and September 2017, Chris was a member of the Committee of the REINSW Buyers’ Agents Chapter. In addition to having substantial input into the Institute’s ongoing efforts to have the real estate industry recognised as a profession, he was instrumental in the drafting of two standard form agreements. One of those agreements was the 2014 edition of the NSW contract for the sale and purchase of land which and largely because of arguments devised by Chris, was the first edition to recognise the existence and role of buyers’ agents. It is now an established part of the industry.

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