Strata Report for. 5/69-71 Oaks Avenue Dee Why NSW (Lot 5 Strata Plan 85259) 5/69-71 Oaks Avenue, Dee Why NSW 2099 Page 1

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1 5/69-71 Oaks Avenue, Dee Why NSW 2099 Page 1 Strata Report for 5/69-71 Oaks Avenue Dee Why NSW 2099 (Lot 5 Strata Plan 85259)

2 5/69-71 Oaks Avenue, Dee Why NSW 2099 Page 2 Strata Title Records Inspection Thank you for choosing Metropolitan Strata Reports. The information contained in this report is factual and not based on opinion. Whilst we are not qualified to speculate or comment on any building works, compliance, financial or legal matters, we can make appropriate referrals to third-party specialists on request, should the need arise. It s important that you read each page carefully. Please feel free to contact us if you have any questions or would like clarification about any aspects of this report. Inspection Details Report ordered by McGrath Dee Why georgebachtis@mcgrath.com.au Inspection Date 24/11/2015 Managing Agent Peninsula Strata Address of Managing Agent 651 Pittwater Road, Dee Why Phone number Name of Strata Manager Lee Stroud Format of records Hardcopy Summary of the inspection/areas of interest Are there any complaints about other residents? Have renovations been approved? Has there been any litergation? Does the Owners Corporation comply with legislation? Is there evidence relating to keeping pets? Are there any levy arrears for this lot? Have the Owners mentioned a future Special Levy? Has any defects work been identified but not completed? No Yes Yes Mostly Yes No No Yes

3 5/69-71 Oaks Avenue, Dee Why NSW 2099 Page 3 1 Property Details Current Owner Hanrahan Address 5/69-71 Oaks Avenue, Dee Why NSW 2099 Number of lots in the Strata Plan 20 Number of units 20 Unit Entitlement 61 Aggregate Unit of Entitlement Compliance Requirements Annual Fire Safety Certification Workplace Health and Safety Sinking Fund Plan Account Audit Most recent dated 20/11/2014 included in annexures No assessment has been done todate Extract dated 24/07/2012 included in annexures The owners corporation resolved not to audit the accounts at the end of the current financial year Schemes under 100 lots are not obligated to have the financial statements audited. It is however best practice Insurance Insurer: Strata Unit Underwriters Due Date: 24/02/2016 Sum insured: $6,363, Valuation: to be obtained prior to next renewal 3 Current Executive Committee Name P Watts K Dean M Fabbro M Mrkobrad P Zaharis E Svyatkin

4 5/69-71 Oaks Avenue, Dee Why NSW 2099 Page 4 4 Finance a. Annual Levy Trends Standard Levies must be set each year at the Annual General Meeting. They are based on the budget prepared by the Strata Manager or Treasurer, which is accepted as is or amended by the owners at the Annual General Meeting (AGM). The levies are recorded as totals, and due and payable Quarterly according to units of entitlement for each lot. Effective from: 1/01/2016 1/12/2014 1/06/2013 1/06/2012 Admin Fund $58, $50, $48, $47, Sinking Fund $7, $7, $7, $5, b. Special Levies Owing Nil c. Lot levies Levies for each lot are calculated as follows: total levy sum divided by aggregate units of entitlement multiplied by units of entitlement divided by four quarters, payable the 1 st day of each quarter unless otherwise resolved at an Annual General Meeting. Due Quarterly effective from: 1/12/2014 Administrative Fund $ Sinking Fund $ Special Levy Nil Paid To 29/02/2016 d. Fund Balances Administrative Fund -$5, Sinking Fund $10, Total $4, e. Expenditure (refer to the financial statements in the attached annexures) Period ending Admin Sinking Year to date $22, $ /05/2015 $67, $10, /05/2014 $6, $7, /05/2013 $56, nil

5 5/69-71 Oaks Avenue, Dee Why NSW 2099 Page 5 5 Minutes on file Annual General Meeting Most recent dated 18/11/2015 Executive Meeting Most recent dated 2/10/2014 Last Meeting AGM Next Meeting None scheduled 6 Notable Matters (refer to the minutes in the attached annexures) Reference/date Details 18/11/2015 Quotes to be obtained for insurance cover b Building replacement valuation to be arranged 2/08/2014 Builder to review Preliminary Defect Report and advise which items to address - Committee to reconvene to to discuss Builders reponse and determine whether lodging a new complaint with Fair Trading is appropriate. 7/08/2014 Diagnostech appointed to consult on Defects A Special Levy be struck in the sum of $10,000 to fund Defect Inspecition Report due by 1/12/14 26/06/2014 Lot 1 owner granted approval to install a clothes line in their courtyard Lot 2 granted conditional approval to install a glass privacy screen Lot 17 granted approval for a pergola 17/04/2014 Peninsula Strata appointed as Managing Director 17/07/2013 Quotes to be obtained for an assessment of defects and report Special levy to be raised in the sum of $7200 to fund shortfall in admin due by 1/3/14 24/07/2012 Defects discussed 14/06/2011 Registered By-laws adopted at the First AGM. By-law 16 Option B was adopted 7 Harmony We reviewed the correspendence file for the past few years and there wasn't much relating to residents breaching by-laws. We however recommend that all interested parties review the by-laws relating to lifestyle issues such as keeping pets, smoking, children playing on common property, installing floorboards etc. By-law breaches are delt with at Committee meetings. In the past few years, noise and visitor parking has been discussed.

6 5/69-71 Oaks Avenue, Dee Why NSW 2099 Page 6 8 Owners Corporations obligations to comply with legislation Sinking Fund Plan Owners corporations are not under obligation to obtain a professional sinking fund plan nor are they under obligation to adhere to such plan that they have obtained. However, they must ensure that sufficient funds are raised each year (at the Annual General Meeting) to fund future capital or remedial projects. Owners Corporations who choose not to obtain a sinking fund plan leave themselves open to possible litigation if it becomes necessary to raise a special levy down the track. We therefore strongly recommend that a sinking fund plan is obtained and tabled each year at the Annual General Meeting and subsequently updated regularly to ensure that it makes the necessary provisions for what it s intended to do avoid raising a special levy. Unfortunately we often find that the sinking fund plan is not followed or up to date, which makes it difficult for new owners to ascertain if a special levy is likely down the track. Annual Fire Safety Environmental Planning and Assessment Regulations require most residential apartment buildings to lodge an Annual Fire Safety Statement known as a Form 15A.The statement must be completed by an appropriately qualified person and must certify essential fire safety measures have received regular maintenance and function in the way they were designed. It does not imply the whole building complies with current standards. The statement must be submitted, annually, to the local Council, Fire Brigade and a copy must be displayed at the building. It may be advisable to enquire at the local council, Sydney Water, Work Cover or any governing body for details of any outstanding Notices or Orders against the Owners Corporation. Such documents are not always accessible during an inspection for reasons mentioned herein. If the scheme hasn t yet addressed fire safety, consideration must be made to the cost involved when/should Council place a Fire Order on the building. Safety regulations There are legislative requirements for owners corporations to meet in relation to ensuring the common areas are free from any kinds of health, safety and security risks, however the strategy for undertaking these measures are not regulated. It is best practice for owners corporations to leave this up to the experts to ensure that they have met their obligations, however not mandatory. We find that most owners corporations are diligent and engage suitably qualified consultants to undertake an assessment and provide a report and list of risk items however, the work that is subsequently carried out is often not recorded; so it s very difficult to see what has been addressed from a report (if anything) and what remains outstanding. The financial statements that we provide may show some items, however it is not clear and time does not allow us to audit the accounts. The more diligent strata managers list Safety measures to be addressed in the minutes. If the minutes don t show what items that have been addressed, we recommend that new owners raise this at the next AGM under the motion of Workplace Health and Safety. If the owners corporation has not addressed this to date, we strongly recommend that consideration be given to high risk items that may be flagged in a report, which will be very costly, such as balcony balustrades, child-safe windows etc that don t comply with current standards and any other high risk hazards. Insurance The Strata Schemes Management Act 1996 requires a minimum Public Liability cover of $10,000,000 per claim and a building valuation must be obtained at least once every 5 years. Under Section 82(6) of the Act and Regulation 12 of the Strata Schemes Management Regulation, 1997, the liability of an insurer under the policy is not to be less than an amount calculated as per building valuation. Home Owners Warranty Insurance: Major changes to relevant legislation in January 2015 dramatically limit the range of defects which can be claimed as a major defect in new buildings. As only major defects can be claimed outside a two year time period purchasers of new apartments are taking a significant financial risk and should seek specialist advice before proceeding. Refer to Fair Trading NSW Major changes to home building laws. Contents Insurance: Purchasers are reminded that they require independent personal contents insurance to cover such items as carpet, light fittings, painting, wallpaper, blinds, curtains and Public Liability Insurance in respect of their own lot Owners who lease their units should seek independent advice from their rental agent/insurance company in the above regard.

7 5/69-71 Oaks Avenue, Dee Why NSW 2099 Page 7 9 Limitations and Recommendations 1) LIMITATIONS OF THE INSPECTION a) This report is provided exclusively for the use of the person to whom it is addressed to (via ) or, to the person who has ordered and paid for the report. If this report has been ordered (or arranged) by a selling agent for the purpose of providing a report to potential purchasers, the person who has ordered the report/paid for the report via PayPal, is authorised to read this report. No other person or corporation has authority to make use of any of this report. We reserve the right to decline consultation with any other person other than the person who is deemed to be the person who has ordered this report. b) This report supersedes any other report, verbal or written, given in respect of the property. Scans that were taken during the inspection are included. We strongly recommend that all parties to the purchase read all pages thoroughly and not proceed with the sale on the strength of any verbal information about the property, the report or the inspection from anyone. c) This report is not intended to be a full audit of all files during an inspection as time does not allow. Where possible, our inspectors inspect back five years as this is the required time for records to be held. Therefore investigation may be required to obtain the current status of any outstanding or unresolved matters that are mentioned in this report or discussed at meetings mentioned in this report. d) This report has been compiled from information noted during an inspection of the files belonging to of the Owners Corporation. All reasonable care has been exercised by us whilst compiling this Report, however we make no warranty of representation as to the accuracy of the information provided to us by the managing agent (or person holding the strata records). We will not be responsible for any loss or damage due to any cause whatsoever, including negligence whether in connection with information supplied by the Managing Agent and/or Officers of the Owners Corporation or otherwise. e) Missing Files/Documents: For various reasons, Strata Managers and Building Managers keep files or work at their desk or other locations around the office. Sometimes, these files are not made available for the strata inspection or even overlooked by the staff member who is in charge of gathering all the records for an inspection. f) Strata Managers are often not available for comment or to answer questions. Management companies represent the Owners Corporation via a managing agency agreement. For this reason, many companies adopt a policy that specifically prohibits managers from discussing records with non-owners. Whilst we endeavour to request information/files, our request is often denied. As a result, a further audit of specific concerns may be necessary. We cannot guarantee that what is provided at the time of the inspection is all that the agent has in their possession. In particular, legal documentation and notes taken by the manager may be deemed private documents and withheld. g) Please take note of the format of the records of this strata scheme. Unless we noted the format as being hardcopy, it is likely that the files are saved electronically on a document management software system. Scanning all incoming documents to a document management system (and discarding the hard copy) is becoming popular among strata companies as they charge the owners corporation a fee to provide access to the files. Alternatively, the fee goes to the strata company, which is outside the provisions as set by the Office of Fair Trading. This adds varying degrees of difficulty to the inspection and increases the cost as the strata companies that have this system, charge for each page that is printed (up to $2 per copy). In some cases, record keeping may be less than diligent. We often find documents are scanned to the wrong strata scheme or documents are simply missing. We cannot guarantee that all important documents/files were sighted or that the managing agent has in fact ensured that all documents have been saved correctly on their document management system. At times upon asking for missing documents, the cause is due to the electronic documents system being set up incorrectly. In addition, some strata companies won t permit access to the printer that the inspection documents are printed to and withhold the printouts till the end of the inspection so they can charge a fee for printing. This further increases the chance of documents being left out of the report and can lead to an inconclusive outcome on a particular issue. In this instance, we recommend that parties to the purchase request copies/information from the Managing Agent via the owner, who is entitled to obtain any information required. 2) RECOMMENDATIONS a) If a selling agent has ordered this report, and this report has been purchased from our website, please check the date of this report as it may not be current. Please check with your solicitor/conveyancer if an update is required prior to proceeding with the sale. b) Pest and Building Inspection: As we don t inspect the actual building when carrying out a Strata Inspection, this report does not address those matters that are addressed in a Building and Pest Inspection. Please consider the need to engage a specialist to inspect the building and provide a report prior to the purchase of any property. c) We recommend as a standard enquiry the Local Council, Sydney Water and other relevant bodies be contacted to ascertain if there are outstanding Notices or Orders against the Owners Corporation. d) Home Owners Warranty Insurance: Major changes to relevant legislation in January 2015 dramatically limit the range of defects which can be claimed as a major defect in new buildings. As only major defects can be claimed outside a two year time period purchasers of new apartments are taking a significant financial risk and should seek specialist advice before proceeding. Refer to Fair Trading NSW Major changes to home building laws e) Swimming Pools: From 29 April 2015 a prospective purchaser may rescind a contract if a certificate of compliance is not provided for any swimming pools in the complex. It will also be illegal for a unit to be rented if there is an uncertified swimming pool. We recommend legal advice be sought if there is any doubt about this matter.

8 5/69-71 Oaks Avenue, Dee Why NSW 2099 Page 8 10 Tips for new owners a) Once settlement has occurred, the (strata) Managing Agent will receive advice from the purchaser s solicitor/conveyancer that settlement has occurred. The Managing Agent is under legal obligation to update the records of the Owners Corporation to reflect the change of ownership, and the new owner is sent a welcome letter. The Managing Agent is not under obligation to discuss or provide any information prior to settlement until the purchaser formally becomes an owner. b) Requesting minutes of meetings that have occurred or scheduled: We recommend that new owners make an appointment to meet their Strata Manager for an update on things that occurred between the date of this report and the period after settlement date. Major decisions may have been made or scheduled prior to, or around the time of a settlement. We strongly recommend that new owners ensure that the Managing Agent has their correct contact details so that all notices of meetings and important letters can be mailed out. It is not uncommon for contact details to be out of date or not noted correctly. It is also a good time to request a copy of documentation relating to any areas of concern or interest. c) The Executive Committee: We recommend that new owners request a copy of the Executive Committee and their contact details, as all maintenance decisions are made by the committee in accordance with legislation. There is often one owner who is chosen to liaise and instruct the Strata Manager of all deliberated decisions of the committee. The Executive Committee is voted in at each Annual General Meeting (AGM), which all owners are advised to attend. Regardless of the size of the Owners Corporation, there is a maximum of nine places on any Executive Committee. We recommend that new owners attend the Annual General Meeting when it comes around to acquaint themselves with their fellow owners and to have a say in the important decisions that are listed for discussion and resolution at the AGM. d) Many Managing Agents charge the Owners Corporation for excessive correspondence and therefore the Annual General Meeting is often scheduled in collaboration with the Executive Committee and not all owners. This means that the scheduled time of the AGM may not suit all owners. When this occurs, legislation makes provisions for owners to vote on all motions on the agenda via a voting form known as a proxy. We recommend that new owners wishing to join the committee let the current committee know as soon as possible and request that they are consulted prior to setting a date for the AGM. e) Levy payments must be paid on time otherwise interest will be charged. Owners are liable to pay levies on time, whether or not a levy notice is received from the strata manager. A levy notice from the strata managers is not obligatory. Interest applies at 30 days from the due date. The 30 days is a grace period, which is set by the owners corporation. Interest is automatically charged if the funds are not in the account prior to the 30 days. This grace period can vary between different strata schemes. Many strata managers have a policy that means interest that has incurred cannot be waived. Strata Managers are not obliged to track down owners who have forgotten to pay their levies. This means that the strata managers do not make phone calls to remind owners to pay their levies. The process of sending owners reminder letters and charging interest is covered in the Managing Agency Agreement between the owners corporation and the strata managing agent. We highly recommend that new owners check what the process is in regards to defaulting lot owners. Owners who are in arrears at the time of a general meeting are not entitled to vote at the meeting. Further information can be found in the Strata Living Booklet that is available to download for free from the Office of Fair Trading. This booklet outlines all owners obligations and responsibilities.