SIMPLY STRATA REPORTS ABN:

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1 SIMPLY STRATA REPORTS ABN: STRATA INSPECTION REPORT NO. SP REPORT ORDERED BY: DRAKE REAL ESTATE PROPERTY ADDRESS: UNIT 13/6-8 WATERLOO STREET NARRABEEN INSPECTION DATE: 18 TH JUNE 2015 INSPECTED BY: HEYEM METLEJ Any enquiries relating to the report or its content must be directed to the inspector on

2 STRATA SCHEMES INSPECTION REPORT An Inspection of the Owner s Corporation books and records was conducted on: STRATA SCHEME NUMBER: SP71025 LOT NUMBER: 13 PROPERTY ADDRESS: Unit 13, 6-8 Waterloo Street, Narrabeen, 2101 On the 18 th June 2015 The proprietor shown on the Strata Roll: LUDO & KATHRYN TALIE STRAETEMANS The Mortgagee shown on the Strata Roll: None Noted Other Mortgagees shown on the Strata Roll are: None Noted Other entries on the Strata Roll: None Noted STRATA ROLL The following indicates the extent to which the Strata Roll complies with the Strata Schemes Management Act 1996: In Book Form Unit Entitlement Recorded: Names Recorded: By-Laws Included: One Page per Lot: Original Proprietor Recorded: Addresses Recorded: Insurances Recorded: COMPUTER YES YES YES YES NO YES NO - 2 -

3 INITIAL PERIOD The Initial Period begins when the Strata Plan is registered, and ends when one-third of the total unit entitlements have been sold. Is the Scheme in the Initial Period - It appears from the Strata Roll that the initial period has EXPIRED TITLE DEED A COPY of the Certificate of Title was sighted during inspection a copy is enclosed for your reference Date of Issue: 13/11/2008 Identifier: CP/SP71025 Edition: 2 Prior Title: None Noted Noted Change of By Laws: AE (Parking) Number of Lot(s): 18 Lots Number of Unit (s): 18 Units Attention is directed to the strata scheme by-laws filed with the strata plan SP71025 Positive Covenant Unit Entitlements Lot 13 (Unit 13) = 59/1000 SP71025 The strata plan was registered on the 29/8/2008. MANAGING AGENT The details of the managing agent are as follows: Name: Mason & Brophy Date of appointment: Not Noted License No: Not Noted Assigned Manager: Chris Stokes Address: Suite 13, 818 Pittwater Road, Dee Why, 2099 Telephone:

4 NOTICES & ORDERS Records are kept of Notices given to the Owners Corporation. Records are kept of Orders served on the Owners Corporation. Particulars of matters discoverable for such notices or orders which adversely affect either the Owners Corporation or the subject lot from the point of view of the purchaser or mortgagee, are: None Noted. MAINTENANCE LEVIES Current Standard Levies for the Lot (s): Lot 13 (Unit 13) Administration Fund: Sinking Fund: Total Levies: $ (Inclusive of GST) $ (Inclusive of GST) $ (Inclusive of GST) To be paid in quarterly instalments commencing 1 st October 2014 Levies for Lot(s) Paid To: 30/9/2015 NO OUTSTANDING BALANCE OF ARREARS DUE (Please refer to the Current Owner Ledger enclosed) Furthermore, a S109 Certificate must be obtained prior to settlement to confirm any possible changes to the subject lot. Levies Determination at AGM 20/8/2014: Administration Budget: $59,661 per annum Sinking Fund: $19,782 per annum The levies appear to have been calculated correctly in accordance with the unit entitlement schedule and approved budget determined at the last Annual General Meeting. Current Special Levies for the Lot (s): Lot 13 (Unit 13) Administration Fund: Sinking Fund: NIL NIL The records of the owner s corporation disclose: That the following Special Levies are likely to occur in the near future: There is NO indication from the minutes that a Special Levy will be required in the near future. However, consideration must be given to the Proposed Major Expenditure and the values of the Administrative and Sinking Funds. Refer to the Budget to apply from 1/7/2014 Refer to the Income and Expenditure Statement for the period 1/7/2014 to 18/6/

5 Sinking Fund: $1,320 electrical, $10, painting, $600 shower waterproofing, $1,738 walls, $ windows Details of Any Special Levies raised in the Last 5 years: (4/10/2012) Resolved to raise a special levy of $10,000 to cover the shortfall in available funds for the painting of the building, due 31/12/2012 (28/8/2013) Resolved to raise a special levy of $10,000 for the payment of works, due in two instalments on the 1/10/2013 and 1/1/2014 That the following increases in the Current Standard Levies are likely to occur in the near future: There is no indication from the minutes that a further increase on Standard Levies would be required, in the near future. To be discussed at next AGM Administrative Fund FINANCIAL DETAILS The Administrative fund is designed to cover expenses for maintaining the common property, the owner s corporation personal property, insurance premiums and recurrent day to day expenses. The approximate balance of the Administration Fund is: $17, CR as at 18/6/2015 Sinking Fund The Sinking Fund is intended to cover expenses of a capital nature (eg. painting common property, replacing or repairing common property and renewing or replacing fixtures, which form part of the common property). The approximate balance of the Sinking Fund is: $35, CR as at 18/6/2015 The approximate balance of the Owners Fund is: $53, CR as at 18/6/2015 Values above are obtained from the balance sheet provided. Enclosed is a copy for your reference. Books of Account: Books of Account are kept. Please note that no attempt has been made to ascertain whether any Managing agent has complied with the detailed accounting requirements of the Property, Stock & Business Agents Act. An additional inspection would be necessary to enable us to report on those requirements. Is there Auditors Appointed: Tax File Number: Australian Business Number: Is there any Evidence of an Income Tax Return Lodged in the last 12 Months: Resolved at the last AGM for NO auditor to be appointed Note for strata schemes with 100 lots or more this is compulsory YES - 5 -

6 BY-LAWS The following By-Laws have been passed but not registered. (The Strata Schemes Management Act 1996 requires that a change of By- Law must be registered within two years of the resolution being passed): None Noted. The Owner s corporation attitude to the keeping of animals is: As per By-Laws Information (if applicable) relating to the rights of exclusive use and enjoyment of common property will appear, in a supplementary report. Refer to additional report. INSURANCE The Strata Schemes Management Act 1996 requires owner s corporation to have: 1. Building Insurance at least to the value of the building as determined by valuation, which must be obtained at least every 5 years. 2. Public Liability cover to a minimum of $10,000, Workers Compensation 4. Voluntary Workers Insurance Note: Owners corporation policies normally cover only risk associated with the common property and not the individual lots. It should be noted this can apply even when damage to property in an individual lot results from fault arising in the common property. Building Building sum insured: $8,865,800 Company: CGU Insurance Policy Number: 06S Policy Ends/ Due Date: 2/6/2016 Common Contents: Included in building sum insured Loss of Rent/ Temp Accomm: $1,329,870 Catastrophe Insurance: $1,329,870 Premium: $9, Excess: $500 Public/ Legal Liability Sum Insured: $ 20, 000,000 Company: As Above Policy No: As Above Due Date: 2/6/2016 Premium: Included in above sum - 6 -

7 Last Insurance Valuation Valuation report sighted by James Spinks & Associates $8,360,000 on 11/4/2014 Under the Strata Schemes Management Act 1996 S. 85 a valuation of a building for insurance must be obtained at least once every 5 years. A copy of the Insurance Schedule is attached for your convenience. History of Claims NO claims history summary provided by insurer in records sighted at time of inspection. I note that it may be possible that there have been claims handled directly between the insurer and Claimant and therefore these claims may not be detailed in the history. For a Comprehensive Insurance Claims History, the insurer should be contacted directly. Personal Accident Sum Insured: $ /$2000 Company: CGU Insurance Policy No: As Above Due Date: As Above Other Insurances Fidelity Guarantee: Sum Insured $100, 000 Office bearers Liability: $5,000,000 Machinery Breakdown: NOT SELECTED Government Audit Costs: $25,000 Workplace, Health & Safety Breaches: $100,000 Legal Defence Expenses: $50,000 Lot Owners Improvements: $250,000 Please refer to certificate for further insurance policy information. EXECUTIVE COMMITTEE MEMBERS Resolved at the last AGM to elect the following 7 people as executive committee members of the owner s corporation: John Lennard (Lot 5) Tony Avelliano (Lot 9) Kathryn Straetamans (Lot 13) Julia Vardill (Lot 16) Shelia Lennon (Lot 7) Richard Pullinger (Lot 12) Lisa Calder (Lot 15) - 7 -

8 MINUTES Minutes of meeting are retained in book form: YES Particulars of building repairs and maintenance problems apparent from the minutes are: The complex appears to be well managed and maintained. The following is apparent from the minutes: (28/8/2013) Resolved to accept the quotation submitted by Hans Schmidt and Son for repair of the water ingress into Unit 13 and 16 (25/5/2015) The fascia and post at Unit 16 is rusting from the inside and out. 29/4/2015 Hans Schmidt & Son prepares a quotation for Unit 13 and Unit 16 pillar rusting based on engineers report for the amount of $21,340, copy enclosed Please refer to the additional report for full details of repairs and maintenance contained in the minutes. WARRANTY INSURANCE Warranty Insurance (Home Building Act 1989 (Regulations 1997)): In order to comply with the Act, any building defects affecting the common property &/ or individual lots should be reported to the Insurer within six months of first being noted within the six year warranty period. (Please note that Multi- storey buildings (i.e.: more than 3 storeys) constructed after 31 st December 2003 are exempt from Home Warranty Insurance requirements vide: Home Building Amendment (Insurance Exemption) Regulation Warranty Insurance not sighted. OCCUPATIONAL HEALTH & SAFETY Occupational Health & Safety Act 2000: This Act places full responsibility for any breaches on the Owners Corporation and its officers. Liability cannot be subjugated to tradespersons, cleaners or other service providers. While any legitimate claim may covered by the plans Public Liability Insurance, fines of up to $850, 000 are not. In addition a penalty of 2 years imprisonment can be given. Defence of a claim is highly restricted and appears to rest on the Owners Corporation showing it took all reasonable steps to ensure a claim would not occur. I further note that substantial changes have been made to the legislation and residential Strata Plans are now not required to have an OH & S Report carried out on the whole building. However, an OH & S Report is required for lifts before registration can be affected with Work Cover. NO Common Property Safety Report available. Yours Faithfully - 8 -

9 Heyem Metlej Simply Strata Reports Termite Inspection As there is no evidence that a recent termite inspection has been carried out, we recommend that the prospective purchasers make their own enquiries. Service and Maintenance Agreements No search has been made of these, or any other agreements that may have been entered into by the Owner s Corporation. Essential Services Annual Fire Safety Statement dated 23/12/2014, copy enclosed Under the Environmental Planning & Assessment Act, 1979 Legislation & Regulations, 2000, relevant buildings are required to be inspected by fire control contractors annually in accordance with Fire Safety requirements & any defects must be rectified prior to the issuing of the Annual Fire Safety Statement. This Certificate must then be submitted to the Local Council who administers fire safety on behalf of the State Government. Smoke Alarms - new smoke alarm requirements for existing buildings effective from 1/5/06. In summary, this requires that all lots that contain a bedroom must be protected by a smoke alarm(s) that comply with Australian Standard AS This regulation relates to buildings that currently do not have to submit an Annual Fire Certificate to the local Government Authority Strata Living What you should know about residential, commercial and other strata schemes, please refer to the copy of Strata Living on the Office of Fair Trading Web Page- ADDITIONAL REPORT Sinking Fund NO Sinking Fund Forecast available. On 7/2/05 changes in the Strata Schemes Management Act came into effect. These changes which apply to all Strata Schemes registered on or after 7/2/05, require the Owners Corporations to plan ahead for the estimated Sinking Fund expenditure over the following 10 year period. Levies will have to be set accordingly to meet the 10 year Sinking Fund estimates. In other words, Owners Corporations will need to work out the likely expenditure on items of a capital nature over the next 10 year period

10 For new Schemes, the 1 st 10 year Sinking Fund plan must be on the Agenda of the 1 st Annual General Meeting (AGM) & completed by the next AGM. The plan must be reviewed within 5 years of the 1 st AGM; however there is flexibility for Owners Corporations to review their plan annually to facilitate a rolling 10 year plan. The Strata Schemes Management Amendment (Sinking Funds) Regulation 2006 was gazetted 28/4/06. This Regulation requires most NSW Strata Schemes to commence 10 year Sinking Fund planning over the next few years. By 7/09, all Schemes (except those two lot ones that are not required to establish a Sinking Fund) will be covered. As Schemes are brought under the 10 year Sinking Fund planning obligations, Owner Corporations will be required to commence working out their capital expenditure needs for the next 10 years & levying individual lot owners accordingly. Schemes will be brought under the new requirements as follows: Strata Plan numbers 50,000 & over will be caught by the provisions from 1/7/06; Strata Plan numbers 30,000-49,999 by 1/7/07; Strata Plan numbers 10,000-29,999 by 1/7/08; Strata Plan numbers 1-9,999 by 1/7/09. Sinking Funds are intended to provide sufficient reserves for the long term maintenance/repair of the building as well as replacement of common property items. Expenditure on painting & replacement of guttering, roofing & fencing are examples of the items that Sinking Funds should provide for. The aim of this provision is to ensure Owners Corporations better plan their finances to minimise the risk of having insufficient funds when, for instance, expensive building repairs need to be carried out. ABBREVIATIONS The following are common abbreviations which may be used in this report: AGM- Annual General Meeting ECM- Executive Committee Meeting EGM- Extra-Ordinary General Meeting OFT- Office of Fair Trading BMC- Building Management Committee

11 MINUTES This Strata report only reports on information contained in the owner s corporation minutes provided to us for inspection going back five years Minutes sighted from the AGM dated 4/8/2010 to the last meeting held 25/5/2015 Attached for your information is a copy of the minutes of the last AGM sighted 20/8/2014, along with the Financial & Budget Reports. AGM 4/8/2010 Resolved to set the Administration Budget at $45,500 and Sinking Fund at $16,275 per annum Resolved that an auditor be appointed Resolved that the owners individual air conditioning system will be each owner s responsibility for their own air conditioning system Refer to the Income and Expenditure Statement for the year ending 30/6/2010 ECM 16/3/2011 Building Claim through Allianz: reported that a number of repair jobs identified by Allianz as claimable on builders insurance had not been completed. Resolved to seek advice on how to proceed Reported that the waterproofing issues were still being addressed in Unit 13 with a small leak persisting into downstairs bedroom resolved to gather more information AGM 1/9/2011 Resolved to set the Administration Budget at $56,000 and Sinking Fund at $17,088 per annum Resolved that no auditor be appointed Resolved to defer a complete risk assessment Refer to the Income and Expenditure Statement for the year ending 30/6/2011 ECM 1/9/2011 Resolved to proceed with Foxtel IQ installation up to $3500 ECM 6/8/2012 Refer to full copy of minutes enclosed Motion 2: Exhaust and Ventilation Update Motion 3: Painting AGM 29/8/

12 Resolved to set the Administration Budget at $61,500 and Sinking Fund at $17,943 per annum Resolved that no auditor be appointed Resolved to obtain an Asbestos Report Refer to the Income and Expenditure Statement for the year ending 30/6/2012 ECM 29/8/2012 Refer to full copy of minutes enclosed Motion 3: Painting quote $22,000 Motion 4: EGM and special levy of $10,000 EGM 4/10/2012 Resolved that the quotation from Johns Painting Service and Co for the amount of $22,000 be accepted Resolved to raise a special levy of $10,000 to cover the shortfall in available funds for the painting of the building, due 31/12/2012 ECM 14/3/2013 Refer to full copy of minutes enclosed Water Ingress: noted the water ingress is due to initial building works where the sub-seal was not sealed. Resolved to discuss solution with unit 13 to see if their resolution will work as unit 16 sealage around the doors Cracks in wall on Ground Floor AGM 28/8/2013 Resolved to set the Administration Budget at $60,603 and Sinking Fund at $18,840 per annum Resolved not to appoint an auditor Resolved to accept the quotation submitted by Hans Schmidt and Son for repair of the water ingress into Unit 13 and 16 Resolved to raise a special levy of $10,000 for the payment of works, due in two instalments on the 1/10/2013 and 1/1/2014 Refer to the Income and Expenditure Statement for the year ending 30/6/2013 AGM 20/8/2014 Resolved to update the Sinking Fund requirements Resolved to set the Administration Fund at $59,661 and Sinking Fund at $19,782 per annum, commencing 1/10/2014 Resolved that an auditor not be appointed

13 Refer to the Income and Expenditure Statement for the year ending 30/6/2014 Refer to full copy of minutes enclosed ECM 1/10/2014 Refer to full copy of minutes enclosed Motion 4: Unit Entitlement Issue ECM 10/12/2014 Refer to full copy of minutes enclosed EGM 2/3/2015 Bannerman s Lawyers advise the owners at the meeting of the processes and procedures required to change the unit entitlements of individual lots ECM 25/5/2015 The fascia and post at Unit 16 is rusting from the inside and out. Unit 13 advised this has been assessed and thought it would be okay for 5 years. Refer to full copy of minutes enclosed CORRESPONDENCE This Strata report only reports on information contained in the owner s corporation correspondence provided to us for inspection going back one year. If you wish us to report on information contained in correspondence older than one year than an extra inspection is required. 4/2/2015 RHM Consultants prepares an engineering report on the condition of the steel columns located on unit 16 balcony that support the roof to the top floor of the complex, copy enclosed 29/4/2015 Hans Schmidt & Son prepares a quotation for Unit 13 and Unit 16 pillar rusting based on engineers report for the amount of $21,340, copy enclosed 2/5/2015 correspondence sighted in relation to roof leaks for unit 11, it is noted that Unit 12 is also experiencing issues, copy of enclosed 8/5/2015 Quote sighted from Spring Horticulture and Gardening Services for the sum of $7,590, copy enclosed 2/6/2015 RHM Consultants prepares a fee proposal for the remedial works, copy of quote enclosed

14 SIMPLY STRATA REPORTS ABN: Terms & Conditions The contents of this report are based upon an inspection of those body corporate records available for a period of up to seven (7) years prior to the date of this report, unless otherwise stated. Where relevant, information received in the course of conversation with officers of the body corporate and/or the managing agent is included. This Strata Report is based solely on an inspection of the records of the Owners Corporation provided for our inspection and we do not carry out any physical inspection of the unit or of the building. Whilst all reasonable care has been taken in the production of this report, no guarantee of accuracy is offered or implied in respect of the information supplied to us at the time of inspection. You should be aware that in some cases Strata Managers hold a "Pending" or "Work in Progress" (WIP) file which is not made available for strata inspection. Important information which may be contained in such files will not appear in this Strata Report where the files have not been provided to us at the time of inspection. No responsibility is accepted for any loss or damage whatsoever arising from Inaccuracies contained in the information supplied to us at the time of inspection. Where the Owners Corporation s records provided for our inspection contain a notice or order from Council requiring fire safety or occupational health and safety upgrade works to be undertaken this information is included in this Strata Report. However the absence of a notice or order from the Owners Corporation s records should not be taken as indicating that the building complies with the Building Code of Australia in regard to these matters. We recommend strongly that you speak to your solicitor or conveyancer about checking on these matters with Council and, where appropriate, consultants qualified in these areas. It is not unusual for Councils to issue fire upgrade orders or notices on Owners Corporations and compliance can be very expensive. Them existence or absence of easements, rights of way and the like are outside the scope of this Strata Report. This information should be obtained from the title of the unit and of the common property through your solicitor or conveyancer. This report is made for the benefit of the parties listed herein (other than the vendor) and no other person shall be or shall be deemed to be entitled to rely on this report for any purpose whatsoever. Any third party acting or relying on this Report whether in whole or in part does so at their own risk