My husband and I are first home buyers looking at a 3-bedroom townhouse in Sydney, NSW. We’ve discovered the strata scheme hasn’t been formally established yet — the developer built all 8 townhouses as a rental portfolio but is now selling one unit to fund a new project. The strata plan is registered but the owners corporation hasn’t been activated because the developer still owns 6 of 8 lots. Once we purchase, external owners will represent 25% of the block, which triggers the formal requirement to establish the owners corporation.
We’ve also noticed the strata levy seems very low at $850.78/quarter for a 2019 building. Is this a red flag for an underfunded capital works fund, or is it normal for a developer-controlled scheme where costs have been minimal so far?
About the property:
- 2019 construction, full brick and concrete slab
- Boutique block of 8 townhouses
- Developer is selling due to funding pressure for a new project
- Townhouse listed early April
- Currently tenanted until July 2026
- Adjacent to stormwater channel — pink (medium/low) flood zone on council maps
- SP# shows “not yet reported” on the NSW Strata Hub
Our specific concerns:
1. Has anyone bought into a strata scheme before the owners corporation was formally established? What was your experience?
2. What are the key risks we should be aware of and what should our conveyancer specifically look for in the contract?
3. Were developer-set by-laws reasonable or did they cause problems later? How difficult is it to change them once the OC is formally established?
4. Did levies increase significantly once proper governance kicked in?
5. We’re planning to add a shower to the “2nd bathroom” (it’s actually the laundry room with a toilet) — should we be concerned about restrictions in a developer-controlled scheme?
6. Any regrets or things you wish you’d known before buying into a situation like this?
We’re going into this with open eyes and genuinely want to hear from people who’ve been through something similar — good and bad experiences welcome.
Happy to answer questions. Thanks in advance!