Article 2/3: Why So Many Strata Reports Miss the Mark
The quality of strata reports has quietly taken a hit in recent years — but most buyers have no idea.
On the surface, reports might still look pretty much the same but behind the scenes, several industry-wide shifts have been undermining the reliability and, more importantly, the usefulness of these reports. From the rise of online records access to the rise of volume-based report ordering platforms, we’re seeing definite trends in reports. There is less information (particularly on current and upcoming issues), incorrect information, missing information and less support for buyers trying to understand the reports.
Let’s take a closer look at what’s going wrong.
- Online Searches
For some years the digitisation of strata records has been increasing – and this has brought major benefits. Many owners can now access strata documents via online portals, making it much easier to stay informed about their buildings. The timing of the move away from paper records was also a benefit to strata searchers when COVID limited in-person access to strata management offices. As property sales continued during COVID, strata managers still needed to provide access to records, and so began the transition to online access to records – through portals, Dropbox links, email attachments, or shared drives to name a few. It was a necessary and mostly welcome shift. Now almost all searches are online
On the surface, online searches are far more efficient. They eliminate the need for physical appointments, eliminate travel time, and allow searchers to download documents without navigating complex file systems on-site, with varied access or download restrictions.
But there are clear drawbacks as well.
Setting up access often involves several email exchanges with strata managers (their preferred way to communicate), and once access is granted, the records provided can be disorganised and incomplete. It’s not uncommon for documents to be stored in unlabelled folders, with vague file names or no structure at all — especially when records have been transferred between strata managers. This means that additional communication is needed with strata managers to get help finding documents.
Search businesses love the flexibility of online searches, but hate the admin and practical issues of finding the required information. Because access is remote and the time provided for the search is limited (often access is limited to one hour), some searchers don’t locate all required documents, or follow up with strata managers on missing records, because they need to move on to the next job. The result? Reports with gaps, errors, missed issues and missing documents. We also see many reports with documents repeated 4 or 5 times, because the searcher has just grabbed all the documents and dumped them in the report (see below).
- No Travel Time means More Searches per Day
In my view, the shift to online searches has created the illusion of more available time. Without travel, many searchers feel they can squeeze in more jobs each day – assuming the work is available. Some doubled their daily search volume — believing online searches would take no longer than physical ones.
But they overlooked the admin time required to do an online search: follow-ups, troubleshooting, and sorting through messy or incomplete records. The pressure to produce more reports in less time means less time spent on the records for each building. Add in the absence of a formal quality control process (which most sole traders don’t have), and the result is predictable: inconsistent, error-prone reports that don’t tell the full story.
- Ordering Platforms: Reports viewed as a Commodity
Around the same time online searches became more common, Ordering Platforms gained popularity with selling agents. These businesses have done a good job of pitching their platforms to real estate agency groups, offering lower pricing in exchange for exclusivity. They make ordering easy, and agents typically view strata reports as a commodity (they see all reports are essentially the same) so they are attracted to lower costs. Their model is based on volume — gain traction by keeping prices low to win business through convenience and affordability.
The success of ordering platforms created more volumes for the search businesses who signed up to the fees offered. Many inspectors thought this was the best thing since sliced bread: no need to market themselves, and more work – what’s not to love?
Unfortunately, this approach prioritised speed and volume over quality. However, lower quality sometimes made the agents look bad (more on that below) and this added further pressure into the already full calendar of searchers.
Some platforms pitch themselves as “PropTech” businesses, implying innovation and efficiency. But the reality is quite different. The strata reporting process used by most providers remains almost entirely manual, relying heavily on the motivation, skill, and experience of individual searchers.
The pressure to produce more reports each day has, in my view, had a direct impact on report quality. It creates a viscous circle: completing a higher number of reports, often at night, to meet deadlines with more new reports to be started the next day. It catches up with anyone, and means less focus on each report, especially buildings where there is a lot going on. Add time required to try to fix past reports where the agent has received complaints from buyers, and there’s no way that reports can be a decent quality.
Customer support also suffered, with many customers unable to get any response to their questions, or a standard response that the searcher can’t add much more than is already in their report. Again, I think poor customer support is a flow on effect of taking on too much work.
We’ve heard that some platforms are considering charging an extra fee to ask questions about a report, in the hope it will incentivise searchers to actually answer buyers’ questions.
- “Document Dump”
We are reviewing a large number of reports every week from a wide range of providers. And one trend we’re seeing more and more is what we’ll term the Document Dump.
These reports contain basic strata information like levies, insurance and current fund balances and then a cut and paste listing of resolutions from recent owner meetings, often a random list that’s not based on importance (eg. We’ve seen annual resolutions to appoint an auditor included) . There’s little to no commentary, no analysis, and no attempt to connect the information in various documents. For example, there is no comparison between levies and capital works fund forecasts, trends in levies, underlying reasons for special levies, summary of the current and recent financial position, attitude of owners to capital maintenance, and so on.
Worse still, the documents themselves are often in disarray — repeated multiple times, out of order, or missing entirely. Important documents are ignored in the report simply because they weren’t mentioned in a meeting resolution. There’s no synthesis, no insights, and no practical help for buyers trying to understand what’s really going on in the building.
- Strata Buildings Are More Complex
One of our most experienced inspectors recently commented: “Strata buildings are a lot more complex than they used to be.” This means it is more important than ever for a proper consideration of the issues facing each building.
And yet, typical strata reports today tell the buyer less than they did just a few years ago. The shift to convenience, volume, and low-cost delivery has come at the expense of quality.
At the end of this article I have provided three case studies with examples of common reporting defects.
- Basic Quality Control is missing
Remember that even before these changes occurred, quality was already questionable in many cases. In our experience, the majority of strata reports provided to buyers — we’d estimate around 85–90% — are below par. That’s not just a guess; it’s based on years of reviewing many thousands of reports.
To be fair, many experienced searchers can produce good reports and offer good follow up support. We’ve worked with some and seen examples of their work. The issue is that most of their reports aren’t consistently good — and often, they’re not even close. Why? Because even a skilled searcher can only do so much when they’re working alone and under pressure.
We’ve seen firsthand (and heard from others in the industry) that many searchers are doing five, six or more inspections each day. They are finalising reports late at night and, even though they might insist they review every report, no-one can do a good job of this, especially, at the end of a long day. Mistakes are inevitable — not because people aren’t trying, but because there is no mechanism to pick up errors or to regulate standards. And in a lot of cases, there seems to be some acceptance of low standard reports because of the additional cost and time needed to get a better report.
- Lack of support for buyers
One of the most common frustrations we hear from buyers is that they can’t get their questions answered after receiving a strata report.
Many inspectors take the view that their job ends once the report is delivered. Some even charge extra for post-report support. But in practice, the level of support is poor and only very straightforward questions are answered. Why? I think it’s because inspectors haven’t reviewed the strata documents properly in the first place and don’t understand the issues facing the building.
To make matters worse, inspectors rarely go back to the strata manager to clarify missing information or follow up on incomplete records — even when that information is crucial. And they don’t try to find out what going on with current issues in the building. For example, an AGM six months ago might have agreed to tender for rectification works. What’s happened since then? With too many reports on their plate and tight deadlines to meet, most don’t have the time (or the incentive) to chase answers to even the obvious questions.
The result? Buyers are left with a report that raises more questions than it answers — and no real support to help them make informed decisions.
Agents
Finally, selling agents don’t care enough about what’s in a strata report either. They are happy to accept very basic reports, but will also complain if a buyer decides to move on to other properties because of poor information about the building. They mostly don’t want to ask vendors for fees to get a strata report done (although some routinely have no issues with this), and we hear reports that some agents are starting to ask for contract clauses requiring buyers to reimburse the vendor’s cost of obtaining the report. It’s a worrying shift.
Meanwhile, ordering platforms and other businesses are reluctant to raise their fees to agents or vendors for fear of losing business. As a result, searchers are caught in the middle. But the real losers are buyers who receive substandard reports. The tail is wagging the dog.
Summary
I know that all sounds like doom and gloom, so where do we go from here? In the third and final article we will look at ways to help your clients, even when they have a poor report. How to make searchers and platforms more accountable for poor reports, and how we can work together to improve the quality of reports in the future.
Case Studies
Case Study 1: Lazy and Unprofessional Strata Reporting
Case Study 2: Outdated, Incomplete and Surface-Level Document Dump
Case Study 3: An incomplete picture
Michael Ferrier
Eyeon Property Inspections
https://www.eyeon.com.au2
