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Apartment and Unit Red Flag Scanner.
Apartments are not the same risk profile as houses. Strata levies, special levies, building defects, lender restrictions on high-density, and body corporate governance all add complexity that doesn’t show up in the listing. This prompt surfaces the flags before you commission any reports.
Why this matters
Apartments are the property type where buyers most often discover expensive problems after exchange that they could have identified before it. Not because the problems are hidden — many of them are documented in the strata report, the AGM minutes, and the sinking fund balance. But buyers don’t know how to read those documents, and most agents don’t volunteer the interpretation.
The strata report is where you find out what you actually agreed to buy. The sinking fund balance tells you whether the building has been properly maintained or whether the previous owners were under-levied and you will be paying for their deferred maintenance through a special levy in your first or second year of ownership.
Building defects in apartment buildings completed between 2000 and 2018 are a material risk across NSW, Queensland, and Victoria. The regulatory environment has improved for new buildings. For buildings in that window, due diligence on defect history and any current or proposed remediation is not optional.
**Pull quote for vision section:** *“The sinking fund tells you the future. The AGM minutes tell you the history. Read both before you exchange.”*
**Real case study — The special levy that arrived in year one:**
A buyer purchased a 2-bedroom apartment in a Sydney inner-city building for $875,000. The strata levy was disclosed as $1,200 per quarter — reasonable for a building of that size. The strata report was ordered by the vendor. She didn’t order her own.
Eight months after settlement, the owners corporation passed a special levy of $18,500 per lot for remediation of the building’s waterproofing system. The issue had been discussed at the previous two AGMs — which were in the vendor-supplied strata report that she had not read carefully.
Had she ordered her own strata report and understood what she was reading, she would have identified the waterproofing discussion in the AGM minutes, asked specific questions of the strata manager, and either negotiated a price reduction or walked away.
The $18,500 special levy was not a surprise to anyone who had read the strata documents. It was only a surprise to her.
**Key honest bit points:** i. The vendor-supplied strata report may not be independent — always order your own through a licensed strata inspector. ii. Lender restrictions on high-density postcodes vary by lender and change without notice — verify with your broker before you fall in love with the building. iii. Building defect proceedings must be disclosed in most states but disclosure obligations vary — verify with your solicitor. iv. A low strata levy is not a selling point — it may be a sign the building is underfunded and a levy increase or special levy is approaching.
“The strata report is where you find out what you actually agreed to buy.
What you're building
A structured apartment strata risk assessment highlighting: high-density postcode policy flags, historical building defect indicators, strata levy adequacy analysis, sinking fund reserves verification, and specific questions for the strata manager.
Claude (free tier works), the property address, strata levy figures, sinking fund balance, and the most recent body corporate AGM minutes if available.
Copy the prompt.Paste your details.Analyze the output.
Paste the prompt below into Claude or ChatGPT. Replace the bracketed fields with your specific property or portfolio details.
Always verify the AI's assumptions with qualified professionals. This output is a first-pass educational tool, not advice.
Apartment red flags
Apartment and unit strata risk scanner · high-density policy signals
You are an Australian property research assistant helping a buyer identify the key red flags and due diligence requirements for an apartment or unit purchase before commissioning professional reports. Apartments have a different and more complex risk profile than houses. Be thorough. PROPERTY DETAILS: - Address or suburb and state: [details] - Asking price: $[amount] - Configuration: [bedrooms, bathrooms, car spaces, storage] - Approximate year built: [year or era — pre-1990, 1990s, 2000s, post-2010] - Building size: [approximate number of units in the complex if known] - Floor level: [e.g. level 3 of 8, ground floor, top floor] - Strata levy disclosed: $[amount per quarter or 'not disclosed'] - Strata report available: [yes — I will describe what I found / not yet obtained] - Body corporate information available: [any details from the listing or agent] MY INTENT: - I intend to: [live in it / rent it out / holiday rental] - First home buyer: [yes / no] - Have I bought an apartment before: [yes / no] Return a structured apartment red flag assessment with these 7 sections: ## 1. BUILDING-LEVEL RED FLAGS Flag any of the following based on the details I have provided: - Building age risk: pre-2000 buildings have different defect risk profiles to post-2010 buildings. Note what risks are associated with the approximate build era I described. - Cladding risk: buildings constructed or clad between approximately 2000 and 2017 may have combustible cladding. Flag whether this is a known risk category for this build era and whether it should be verified. - Building defect history: large buildings completed after 2000 in NSW, QLD, and VIC have a higher incidence of reported defects than is commonly understood. Flag as a due diligence item. - Lift, pool, gym, concierge: amenities that sound like selling points are also shared costs. For each amenity present, note the approximate annual levy cost implication. - Building management: self-managed strata versus professional strata manager — what each implies for governance quality. ## 2. STRATA FINANCIAL HEALTH FLAGS The strata finances are the most important and most overlooked part of apartment due diligence. Flag: - Sinking fund (also called capital works fund): is the balance disclosed? Is it adequate for a building of this age and size? A general benchmark: $X per unit per year should be accumulating for maintenance reserves. An underfunded sinking fund means special levies in your future. - Administrative fund: is it in surplus or deficit? Consistent deficits indicate ongoing underfunding. - Special levies: has any special levy been passed, is one being discussed, or are there building issues that would typically lead to a special levy? Flag how to identify this from AGM minutes. - Levies disclosed versus typical: if the strata levy seems low for a building of this size and age, it may indicate underfunding. - How to read a strata report: tell me what to look for in the strata report to identify financial health issues — specifically what sections, what numbers, and what language signals a problem. ## 3. GOVERNANCE AND LEGAL FLAGS - AGM minutes: what to look for — disputes, proceedings, complaints, proposed works - By-law compliance: any known by-law breaches or disputes in the building - Building defect proceedings: is the owners corporation involved in any legal action regarding building defects? This is material and must be disclosed in most states. - Proxy farming: what it is and how to identify whether a small number of investors are controlling building decisions against the interests of owner-occupiers - Pending works: any approved or proposed works that will generate additional cost to owners ## 4. LENDER APPETITE FLAGS FOR THIS APARTMENT Based on the details I have provided, flag any of the following: - High-density postcode restrictions: some lenders restrict LVR in postcodes with a high concentration of apartments - Studio or small apartment: many lenders require a minimum internal area (typically 50sqm) and will not lend on studios or very small apartments - Serviced apartment or hotel-like arrangement: any management scheme or hotel pool arrangement can dramatically restrict lender appetite - Holiday or resort area classification: some lenders restrict apartment lending in known resort postcodes - New vs established: some lenders have different LVR policies for off-the-plan or newly completed apartments in oversupplied areas - Building height restrictions: some lenders restrict apartments above a certain number of floors ## 5. WHAT THE STRATA REPORT SHOULD TELL ME If I have not yet obtained a strata report, describe exactly what I should order and what it should contain. If I have obtained one and can describe what I found, interpret the key findings for me. The strata report for this property should include: - The last 2 years of AGM minutes - The last 2 years of financial statements (administrative fund and sinking fund) - The current 10-year sinking fund forecast - A summary of any outstanding litigation or building defect proceedings - Details of any current or proposed special levies - The current by-laws Red flags to look for in each document section. ## 6. QUESTIONS I MUST ASK BEFORE I EXCHANGE Generate 10 specific questions I should ask before exchanging contracts on this apartment. Assign each question to the correct professional: the selling agent, my conveyancer, the strata manager directly, or my mortgage broker. ## 7. THE ONE THING MOST APARTMENT BUYERS MISS Based on this property's profile, what is the single most important due diligence item that buyers commonly skip or underestimate for an apartment of this type, age, and location? Why does it matter and what should I do about it? --- Educational analysis only. Not legal, financial, or strata advice. Strata law, disclosure requirements, and building regulation vary by state. Engage a licensed strata inspector, solicitor or conveyancer, and mortgage broker before making any apartment purchase decision.
A buyer purchased a 2-bedroom apartment in a Sydney inner-city building for $875,000. The strata levy was disclosed as $1,200 per quarter — reasonable for a building of that size. The strata report was ordered by the vendor. She didn’t order her own.
Eight months after settlement, the owners corporation passed a special levy of $18,500 per lot for remediation of the building’s waterproofing system. The issue had been discussed at the previous two AGMs — which were in the vendor-supplied strata report that she had not read carefully. Had she ordered her own strata report and understood what she was reading, she would have identified the waterproofing discussion in the AGM minutes, asked specific questions of the strata manager, and either negotiated a price reduction or walked away. The $18,500 special levy was not a surprise to anyone who had read the strata documents. It was only a surprise to her. **Key honest bit points:** i. The vendor-supplied strata report may not be independent — always order your own through a licensed strata inspector. ii. Lender restrictions on high-density postcodes vary by lender and change without notice — verify with your broker before you fall in love with the building. iii. Building defect proceedings must be disclosed in most states but disclosure obligations vary — verify with your solicitor. iv. A low strata levy is not a selling point — it may be a sign the building is underfunded and a levy increase or special levy is approaching.
Your first run is fine. Your fifth is sharp.
Incorporate actual strata records
As you get the official AGM minutes and strata documents, paste their text summaries directly into the chat to search for unlisted waterproofing or structural defects.
Compare levies across three properties
Run the scanner on multiple apartments in the same suburb to see if the building's sinking fund and levies are standard or underfunded.
Check with your solicitor first
Use the AI's flags to prepare a specific list of questions for your conveyancing solicitor before exchanging contracts.
Save this scanner prompt in your Claude Project. Run it on every apartment you inspect to build a consistent risk database.
What it still gets wrong.
The vendor-supplied strata report may not be independent — always order your own through a licensed strata inspector.
Lender restrictions on high-density postcodes vary by lender and change without notice — verify with your broker before you fall in love with the building.
Building defect proceedings must be disclosed in most states but disclosure obligations vary — verify with your solicitor.
A low strata levy is not a selling point — it may be a sign the building is underfunded and a levy increase or special levy is approaching.
How this stacks.
Day 09 scans the strata and building risks. Day 01 runs a first-pass listing analysis. Day 20 parses the strata document details. Stack them to understand what you're buying.
Before you make an offer on an apartment.
You'll know the hidden liabilities in the strata documents.
You'll have surfaced any history of water leaks, concrete cancer, or looming special levies — and the specific questions to take to your solicitor and a licensed strata inspector before you commit. General information to prepare you, not advice.
Regional risk check
Regional and remote property risk scan · economic dependency test
Read Day 10 ↗