Buying a Strata Office or Shop: How Lenders Look at It
Property Lending
Strata title · Owners corporation · Office and shop lots
A strata titled office suite or retail shop is financed as ordinary commercial security, and the scheme it sits inside comes with the deal. The owners corporation's records, its capital works fund and its registered rules all end up in your application. This guide sets out what a commercial lender actually reads, and what makes a lot harder to fund.
Quick Answer
Yes. A strata titled office suite or shop is ordinary commercial security, assessed as a commercial property loan. What changes against freehold is that the scheme's records, finances and rules are read alongside your own, so a sound owners corporation matters as much as your figures.
The short version
- Can you borrow on it
- Yes. A strata titled office or shop is ordinary commercial security. The title type is not the obstacle.
- Deposit
- As a practical 2026 starting point, published commercial policy spans roughly 70% LVR at bank level to 80% with some non-banks, so think about 20% to 30% equity before duty and purchase costs. The lot, lease and your figures can reduce that.
- If it is off the plan
- Treat finance at exchange as provisional. The registered title, finished property, current valuation and current lending policy all matter again near settlement.
- If it is already tenanted
- The lease is part of the security story. Remaining term, effective rent, incentives, outgoings, tenant strength and side agreements can all change value and gearing.
- Parking and storage
- Confirm on the plan whether they are part of your lot, separate lots, common property or only a right to use. The marketing brochure is not enough.
- Floor area
- No statutory minimum anywhere in Australia. Each lender sets its own in unpublished policy. On lots we have placed the workable band starts around 40 to 50 square metres. Indicative only.
- The third party in your file
- The owners corporation. Its minutes, its capital works fund, its arrears and its registered rules are read alongside your own figures.
- The capital works plan
- Not a national requirement. Every New South Wales scheme must have one; in Victoria only schemes above 50 lots must, and in Western Australia only those of 10 or more lots or above a cost threshold.
- What actually gets a lot refused
- Rarely one thing. Most often a small lot plus an underfunded scheme, or an unresolved defect with no funded plan behind it.
- The document you order first
- The scheme certificate or statutory information, plus the records search, as soon as the contract allows. Current standard turnarounds include 10 business days in Victoria, 5 business days in Queensland and South Australia, and 14 days in Western Australia and the ACT.
- Not this page
- If you meant a loan taken out by the owners corporation itself to fund repairs across the whole building, that is a different product. Jump to the difference.
Can you get a commercial loan on a strata titled office or shop?
Yes. A strata titled office suite or retail shop is accepted as security by banks, non-banks and private lenders, and what you are borrowing is an ordinary commercial property loan. The title type is not the obstacle, and it is worth saying plainly because most of the accessible advice on strata is written for people buying a flat.
The law never confined strata to housing. Under New South Wales legislation a strata scheme is defined simply as "a freehold strata scheme or a leasehold strata scheme", with nothing in the definition about residential use, and the same section defines a utility lot as one used primarily for storage or vehicles and "not for human occupation as a residence, office, shop or the like", a phrase that only makes sense if offices and shops are ordinary lots in the first place. Strata Schemes Management Act 2015 (NSW) s 4, read 18 September 2026. New South Wales statute; the other states have their own Acts and their own wording.
A second state says it in plainer words. Queensland government guidance, describing what a body corporate property can be, lists a "duplex, residential unit block, high-rise accommodation complex, shopping complex or business park", which puts retail and commercial premises in the same sentence as housing without qualification. qld.gov.au, buying a body corporate property, last updated 18 May 2026, read 18 September 2026. Queensland, where the scheme is called a body corporate rather than an owners corporation. Two states, two different Acts, and neither confines the structure to residential use.
What changes against a freehold purchase is the number of parties in your file. On a freehold title the lender reads you, the building and the lease. On a strata lot it reads you, your lot, the lease, and a third party you do not control: the owners corporation. Its minutes, its finances and its rules all end up inside your application. A well run scheme is invisible in your approval. A troubled one can cut the amount you can borrow, add conditions, or end the application outright, even when your own figures are strong. If you want the mechanics of commercial lending generally before the strata layer, start with how commercial property loans work.
What does a lender check in the strata records before approving?
It reads the scheme's paperwork for evidence that the building is funded, insured and not in dispute. That is the honest one-line answer, and everything below is detail on it. In practice the documents are the strata search or inspection report, your state or territory scheme certificate or prescribed information, the last few sets of minutes, the levy position and the capital works fund.
New South Wales government guidance tells a buyer to obtain a section 184 certificate from the owners corporation, and describes a strata search report as revealing, among other things, "building defects and planned works", alongside the finances of the scheme, its insurance, safety requirements, legal matters and meeting notes. The certificate itself covers the committee and managing agent, the levies and any outstanding levies, capital works funding proposals, the by-laws, and whether the scheme has an exclusive supply network. nsw.gov.au, buying a strata property, last updated 1 April 2026, read 18 September 2026. New South Wales, and the page is written for residential buyers, which is exactly the gap this section exists to fill.
The table below is the consolidation this topic has never had in one place: what each record is, what a lender wants to see in it, and what turns it into a problem. It is the difference between knowing a strata search is required and knowing what the person reading it is looking for. For the underlying commercial credit questions that sit underneath all of this, see how commercial property loans work.
| Scheme record | What a lender wants to see | What slows or stops the loan |
|---|---|---|
| Strata search or inspection report | A current report ordered before finance approval, not after it | No report, or one ordered so late that its findings can no longer change the terms |
| Scheme certificate or prescribed information | Levies set, paid, and consistent with the scheme's budget | Outstanding levies or liabilities recorded against the lot you are buying |
| Capital works fund | A funded plan, with a balance that could actually meet it | A plan on paper with very little money behind it |
| Minutes of recent meetings | No repeated discussion of the same unresolved problem | The same defect item returning meeting after meeting with no decision |
| Litigation and disputes | The owners corporation is not a party to proceedings | Active litigation, and building work disputes above all |
| Levy arrears across the scheme | Arrears confined to one or two lots at most | Widespread arrears, which read as a scheme that cannot fund itself |
| Insurance | Current building insurance at replacement value | Lapsed or clearly inadequate cover, a common condition before settlement |
| By-laws and rules | Nothing that conflicts with how you intend to use the lot | A registered rule that restricts your intended use of the lot |
| Exclusive supply contracts | Disclosed, and nothing that locks the scheme into costs it cannot control | An undisclosed supply arrangement that changes the running cost of your lot |
The New South Wales examples in this table come from nsw.gov.au guidance read 18 September 2026. The equivalent certificate or prescribed-information route is different in every state and territory, which is why the next section sets them out separately. How a lender weights each item is broking experience rather than policy any lender publishes, and it varies between lenders and over time.
Scenario: the defect item that keeps coming back
A buyer is three weeks into a purchase of a ground floor shop and the numbers are comfortable. The strata search arrives and the minutes show the same water ingress item discussed at three consecutive meetings, with an engineer's report commissioned and no resolution passed. Nothing has been quoted, so nothing has been levied, and the capital works fund has never been asked to meet it. The lender's concern is not the water. It is that the cost is unknown, unfunded and still coming, and it will land on the lot as a special levy at whatever the eventual figure turns out to be. The realistic outcomes are a lower loan amount, a condition that the work be resolved before settlement, or a decline. The point of ordering the search early is that all three of those are still negotiable in week three and none of them is in week six.
What if the records show defects, cladding, insurance problems or litigation?
The lender is trying to turn an uncertain building problem into a known cost, a known timetable and a known party responsible for paying it. A quantified defect with an adopted remediation plan and money already raised is a different credit problem from the same defect with no scope, no quote and no funding. The second is harder because nobody yet knows the liability that may land on your lot.
From our broking, indicative
- Known and funded: the issue can become a valuation comment or a loan condition rather than an automatic decline.
- Known but unfunded: expect questions about the likely special levy, your capacity to absorb it and whether the adopted value should be reduced.
- Scope still unknown: this is the hardest version because the lender cannot size the downside.
- Insurance affected: inadequate or uncertain building cover can stop settlement until the position is resolved.
- Active litigation: the lender wants the claim, counterclaim, legal-cost exposure and insurance position, not merely the word "litigation" in a minute.
These are underwriting patterns from commercial files, not a universal lender rule. The legal and insurance position must be checked on the actual scheme.
What is the strata certificate called in your state, and what does it leave out?
There is no single Australian "strata certificate". Each jurisdiction uses its own certificate, statement or statutory information process, and the document is never a substitute for the full scheme records. For finance, the useful question is not only what the document is called but what it proves, how long it can take, and what the lender still has to obtain separately.
This matters to a commercial buyer because the valuation and credit decision can stall while somebody waits for scheme information. Order the jurisdiction-specific document and the broader records search in parallel wherever the contract and local process allow it.
| Jurisdiction | Document or statutory route | Current standard timing | What still needs separate checking |
|---|---|---|---|
| New South Wales | Strata information certificate, commonly called a section 184 certificate | Allow up to 14 days in ordinary practice and confirm the current fee and timing with the owners corporation or strata manager | Building condition, defect history and the full decision trail in the minutes and strata search |
| Victoria | Owners corporation certificate under section 151 | 10 business days for the standard service; faster prescribed-fee tiers are available | The certificate is detailed, but inspect the register and recent minutes for the history behind the disclosed liabilities and works |
| Queensland | Body corporate certificate: BCCM form 33, form 34 for specified two-lot schemes, or BUGTA form 18 | 5 business days under the current body corporate legislation; a paid priority service can be available | Minutes, contracts and other financial records that are not reproduced in the certificate |
| Western Australia | Section 110 certificate from the strata company, in addition to mandatory pre-contract disclosure | 14 days after a valid application under sections 107 and 110 | Accounts, minutes, reserve-fund planning and defect reports are separate records rather than a complete section 110 package |
| South Australia | No single equivalent certificate. For strata title, a prospective purchaser can request section 41 information; community title uses the section 139 statement and records process | 5 business days for the corporation information request. Separate vendor disclosure also applies before settlement | Read the supplied minutes, accounts, insurance and articles or by-laws rather than expecting one certificate to summarise the scheme |
| Tasmania | A certificate under section 83(5) of the Strata Titles Act 1998, issued by the body corporate on application by an owner or person with an interest in the lot | The Act specifies the matters to be certified but does not set the same simple buyer-facing turnaround used in Victoria, Queensland, WA or the ACT | Minutes, by-laws, insurance and condition information should still be obtained separately |
| Australian Capital Territory | Unit title sale certificate under section 119 of the Unit Titles (Management) Act 2011 | 14 days for a sale certificate or sale update certificate | Inspect the owners corporation records as well, especially minutes, rules and material behind the fund balances and insurance disclosures |
| Northern Territory | Body corporate certificate | Obtain it during conveyancing and confirm the current response time with the body corporate or conveyancer | NT guidance also tells buyers to check rules, fees, funds, management duties, minutes, future works, debts and legal claims |
Sources checked 18 September 2026: NSW Government; Consumer Affairs Victoria; Queensland Government; WA legislation and Landgate; South Australian legislation and Legal Services Commission; Tasmanian legislation; ACT legislation including the 2026 sale certificate determination; NT Government. State and territory law changes, so your solicitor or conveyancer should confirm the current form, fee and deadline for the specific transaction.
The certificate is not the defect report. A lender still wants the wider record because a financially clean certificate can coexist with recurring water ingress in the minutes, a lift replacement that has never been funded, a dispute with a builder, or a proposed special levy that has not yet fallen due. Treat the certificate as the lot-level financial snapshot and the records search as the history.
What changes if you buy the strata office or shop off the plan?
Finance at exchange is not the finance you settle with. When you sign an off-the-plan contract the individual lot may not yet have its own registered title, the finished property cannot yet be inspected as completed security, and the owners corporation may not yet have a trading history. The real settlement test therefore happens again near completion, when the title, finished lot, current valuation and your current borrowing position all exist at the same time.
The NSW Registrar General describes an off-the-plan strata contract as a sale where the unit does not have its own title when contracts are signed and says the balance is due after construction and registration. WA Government guidance is equally direct: final settlement of an off-the-plan sale can only happen after the certificate of title has issued, and it lists changed lending policy, changed financial circumstances and changed interest rates among the finance risks of the delay. Sources read 18 September 2026: NSW Registrar General off-the-plan guidance and WA Government buying property off the plan. Contract rights and disclosure rules differ by jurisdiction.
There is also a valuation issue. Australian banking valuation instructions expressly recognise an "as if complete" basis where an off-the-plan property, common areas, services or title are not yet complete. That lets a lender assess proposed security before everything exists, but it does not turn a long-dated approval into a guaranteed settlement facility. The finished lot and current market still have to support the loan when money is actually advanced.
| Issue | At contract | What must be checked again near settlement |
|---|---|---|
| Title and lot | Draft plan, proposed area and specifications | Registered title, final area, boundaries, parking, storage and any material plan changes |
| Valuation | May be assessed on plans or an as-if-complete basis | The completed security, current comparable sales, market rent and any change from the contracted product |
| Finance | Indicative fit or approval under today's policy and your current financial position | Current serviceability, current policy, current credit evidence and any conditions that have expired |
| Owners corporation | Budget, proposed entitlements and developer disclosure rather than an established history | Registered scheme, first budgets, insurance, management arrangements, service contracts and the records that now exist |
| Cash to complete | Deposit and an estimate of duty, GST and costs | Actual valuation shortfall, settlement adjustments, duty/GST position and any fit-out or compliance spend now required |
The legal disclosure regime and settlement trigger are state based. Have your solicitor identify what changes the developer may make, what notice starts the settlement clock and what rights you have if the completed lot differs materially from the contract.
Do not wait for the registration notice to restart the finance work. Re-open the file before expected completion, refresh the business figures and liabilities, confirm the final borrowing entity, and have the valuer and lender ready for the registered title. The risk is not that off-the-plan commercial strata cannot be financed. The risk is promising today to settle a transaction that will be tested under a future valuation and future lending policy.
Is there a minimum floor area for a strata titled lot?
Most commercial lenders do apply one, and it is close to the only strata rule that is near universal. The surprise is what it is for. A minimum floor area is a resale test, not a test of your business: a very small lot has a thin buyer pool, so if the loan ever has to be recovered the security is harder to sell. A lot that is too small is not refused on its merits. It is refused because the lender cannot picture the next buyer.
Where the line sits is where the published advice is weakest, and it is worth being straight about why. There is no statutory minimum anywhere in Australia. Each lender sets its own in policy, that policy is not published, and it moves. A single flat figure quoted as though it were a market rule is almost always the most common policy floor rather than the floor in every policy, and treating it as the latter costs people deals that were fundable.
From our broking, indicative
On the office suites and retail lots we have actually placed, floor area behaves as a band rather than a single cut-off, and where a particular lot sits inside that band comes down to the lender tier rather than to anything about the building.
- The workable band on strata titled commercial lots starts at roughly 40 to 50 square metres and above, with the tighter end of that range sitting with the lenders that price the sharpest. Basis: lots we have placed. As at September 2026.
- We have had lots funded below the fifty square metre figure that gets quoted as a market minimum, which is why we describe it as a band. A flat fifty overstates the floor.
- What cuts a lot back or refuses it is rarely the size on its own: unresolved defect work with no funded plan behind it, litigation the owners corporation is a party to, material levy arrears across the scheme, a capital works plan with nothing funding it, no separate services to the lot, or a fit-out so specific that only one kind of occupier could ever use it.
Indicative only, based on deals we have placed, and stated as a band rather than a floor. It is not a quote, not an offer, and not a guide to what you will be approved for. Actual terms depend on lender policy and your circumstances at the time of application. Not financial advice.
The practical move is not to guess the number. It is to establish the lot's net lettable area from the plan before you go to a lender, because a lot sitting near the band is a question of which lender you approach first rather than whether the purchase is fundable at all. Where a lot sits inside a building with both commercial and residential parts, the security question changes again, and how lenders handle a mixed use building covers how that gets split.
Looking at a lot that sits near the band? The question is usually which lender you approach first, not whether the purchase is fundable. Tell us the net lettable area from the plan and we will tell you who is likely to look at it.
Check EligibilityWhat exactly forms part of the lot, including parking and storage?
The strata plan, not the sales brochure, tells you what you are actually buying. A car space or storage area can be part of the same lot, a separate lot, common property, or a right to use common property under the scheme rules. Those are economically different positions even if the agent describes all four as "comes with parking and storage".
Landgate's current strata guidance explains the basic principle clearly: strata lots are three-dimensional spaces defined by the strata plan, and the lot boundaries have to be read from the plan wording and graphics together. NSW Government guidance makes the practical parking point: owners should check whether a parking space is actually included and the scheme controls use of common-property parking. Sources read 18 September 2026: Landgate STP-02 Lots and strata-owner resources; NSW Government strata parking guidance. Boundary rules and terminology differ by state.
| Item | What to establish | Why it matters to value and finance |
|---|---|---|
| Office or shop floor | The legal lot boundaries and the area the valuer will treat as saleable or lettable space | A mismatch between marketed area and title area changes comparable-sales evidence and can change value |
| Car parking | Part of the lot, a separate titled lot, common property or an exclusive-use allocation | Secure transferable parking can widen the resale and tenant pool; a revocable or shared right is not the same asset |
| Storage | Part-lot, separate lot, cage on common property or merely allocated space | The valuer needs to know whether the right transfers with the property and can be separately sold or lost |
| Balcony, courtyard or service yard | Whether it is within title and who maintains it | Usable area and maintenance liability are not the same thing |
| Toilets, lifts, loading and plant | Whether they are common facilities, exclusive facilities or subject to a management statement | A business can be legally capable of occupying the lot but commercially constrained by access, loading or shared-service rules |
| Easements and access rights | Rights for entry, services, deliveries, waste, ventilation and other infrastructure | The lender is interested in whether another buyer could use the property without relying on an informal arrangement |
Unit or lot entitlement is a different concept again. It can drive voting rights and the share of scheme expenses under the relevant state law, so compare the entitlement against the physical lot and expected levies rather than assuming two similarly sized shops carry the same scheme cost. In a mixed-use complex, also obtain the management statement or equivalent document that governs shared facilities between the residential and commercial components.
For a small commercial lot, title clarity is part of resaleability. A compact office with separately secured parking and simple access can be easier to explain to the next buyer than a larger suite whose parking, storage, air-conditioning plant or loading access depends on informal or fragile arrangements. That is why the plan belongs in the finance pack, not only in the conveyancer's file.
How much deposit do you need, and what term will you get?
A practical 2026 starting point is roughly 20% to 30% equity plus purchase costs, because published commercial policy currently spans about 70% LVR at bank level to 80% with some non-bank products. That is a starting range, not a promise. A small lot, weak lease, secondary location, scheme problem, specialist fit-out or weaker borrower can push the available LVR down.
Switchboard's current 80% LVR commercial property review shows why a single market-wide number is misleading: bank commercial policy clusters lower, while selected non-bank products publish higher ceilings with loan-size, postcode and security conditions. Your deposit is the gap between the lender's assessed value and the loan, not automatically the gap between the purchase price and the loan.
Worked example: why the deposit is not the cash-to-complete number
At a $1,000,000 purchase price and 75% LVR, the loan is $750,000 and the equity contribution is $250,000. That does not mean $250,000 completes the purchase. Transfer duty, legal and search costs, lender and valuation charges where applicable, settlement adjustments and any immediate fit-out or compliance work sit outside that equity figure. If the valuation comes in at $950,000 and the lender still caps the deal at 75% LVR, the loan falls to $712,500 and the buyer has to find the extra $37,500 as well.
| Cash item | Why it matters | When to solve it |
|---|---|---|
| Equity contribution | The gap between the loan and the lower of the purchase price or lender-assessed value, subject to policy | Before making an unconditional offer |
| Transfer duty | State or territory duty is separate from the loan deposit and varies by jurisdiction | Have your solicitor calculate it before exchange |
| GST position | The contract may be plus GST, GST-inclusive, a going concern or use the margin scheme, and those treatments change cash flow and credits | Before signing, with accountant and solicitor |
| Legal, search and scheme-report costs | Commercial due diligence is broader than a residential conveyance and strata adds another records layer | Budget before the finance clause starts |
| Valuation and lender fees | Some facilities pass valuation, legal or establishment costs to the borrower | Ask for the fee schedule before accepting terms |
| Settlement adjustments | Rates, levies, rent and outgoings may be adjusted between buyer and seller at settlement | Solicitor calculates near settlement |
| Fit-out and compliance | The loan that buys the lot may not fund your signage, fit-out, fire, access, plumbing, grease trap, power or change-of-use work | Price it before you decide the property is affordable |
Commercial "term" can mean two different things. Some facilities have a short contractual expiry or review period even though repayments are calculated over a much longer amortisation; other products are written for long amortising terms. Ask the lender two separate questions: how long until the facility legally expires or is reviewed, and over how many years are repayments calculated? A headline "30-year commercial loan" and a five-year facility reviewed on a longer amortisation are not the same risk.
Where the lot is tenanted, the remaining lease term also affects how far the lender will gear. See how the tenant sets your LVR. If it is vacant, read vacant commercial property finance.
How does the lender value a strata office or shop?
The lender values the property as commercial security, and the basis can change depending on whether the lot is vacant, owner-occupied or sold with a lease. The result is not simply a check that the contract price looks reasonable. The valuer is also testing saleability, market rent, lease strength, outgoings, floor area, access, parking, fit-out, zoning and the condition of the scheme around the lot.
For an investment lot, the lease can materially influence value because rent, remaining term and tenant quality affect the income a buyer would inherit. For an owner-occupied or vacant lot, the valuer has less income to lean on and the resale market for the physical lot matters more. That is why two identical strata suites can support different loan amounts if one carries a strong lease and the other is vacant.
The valuation shortfall nobody budgets for
If you agree to pay $1,000,000 but the lender adopts $950,000, an 80% LVR does not produce an $800,000 loan. It produces $760,000 if policy is applied to the adopted value. The buyer has to fund the $240,000 gap to price before duty and costs. A high LVR therefore does not protect you from paying above the lender's value.
Give the valuer the lease, outgoings schedule, floor plan, scheme records and any approvals early. A valuation that is waiting on one missing lease schedule or body corporate record is still an unfinished valuation, and unfinished valuations are one of the quiet ways a finance clause expires.
Is a strata office assessed differently for an owner-occupier and an investor?
Yes. An owner-occupier is assessed primarily on the business's capacity to service the debt and the suitability of the lot for that business; an investor is assessed more heavily on the lease, rent, tenant covenant and property income. The scheme risks apply to both.
If you will occupy the lot
- The lender tests your business trading and existing commitments.
- There may be no lease income supporting the valuation.
- Your intended use must work under both planning controls and the scheme's registered rules.
- Fit-out cost and downtime matter because the business may be paying rent elsewhere while the new premises is prepared.
- The lender still tests resale: the property has to work for the next buyer, not only for your business.
If you are buying it tenanted
- The lease term, remaining term, rent, reviews and tenant strength become central.
- A short lease can reduce gearing even where the rent is strong.
- Recoverable outgoings matter because strata levies are an operating cost.
- Options do not always carry the same weight as a firm unexpired term.
- The scheme records sit on top of the lease assessment, not instead of it.
The distinction should be settled before you shortlist properties. An owner-occupier may care most about access, power, signage, parking and whether the use is permitted. An investor may care more about lease expiry, tenant concentration and whether the rent is genuinely market. The lender cares about whichever risk becomes the exit problem.
What should you check if the strata office or shop already has a tenant?
Read the lease as a second security document. The rent on the marketing brochure is not enough. A lender and valuer want to know how long the income is actually locked in, what the tenant really pays after incentives and outgoings, what security sits behind the tenant's obligations, and what the property is likely to earn if that tenant leaves.
Retail leasing law is state based, so the legal disclosure rules are not national. The New South Wales Small Business Commissioner is a useful example of the information that matters: its current retail tenancy guidance identifies the lease term and options, rent-review method, permitted use, outgoings, trading hours, fit-out, incentives, security and make-good obligations as core lease issues, and warns that separate side arrangements can make the effective rent different from the face rent. NSW Small Business Commissioner retail tenancy guidance, read 18 September 2026. New South Wales example only; have your solicitor apply the law for the property's jurisdiction and lease type.
| Lease item | What to check | Why the lender or valuer cares |
|---|---|---|
| Remaining firm term | Expiry date, holdover position and whether options are exercisable but not yet exercised | A long option is not always valued like the same period already locked in |
| Tenant covenant | Who the tenant actually is, trading history, group support and any guarantor | The rent is only as durable as the party required to pay it |
| Face rent versus effective rent | Rent-free periods, incentives, fit-out contributions, abatements and side letters | Headline rent can overstate the income a buyer is really acquiring |
| Rent reviews | Fixed, CPI, market or other review mechanism and the next review date | It affects forward income and whether current rent is above or below market |
| Outgoings | Which council rates, insurance, management costs and strata levies are recoverable | Gross rent with unrecovered outgoings can produce much less net income than the brochure implies |
| Security | Bank guarantee, cash bond, personal or corporate guarantee and expiry mechanics | It affects the practical downside if the tenant defaults, even though it does not replace a good covenant |
| Make-good and repair | What the tenant must reinstate or repair at expiry and any landlord obligations | Future capital cost changes the economics of the investment and reletting risk |
| Retail-lease compliance | Disclosure statements, side agreements and other state-specific statutory requirements where the lease is covered | A lease problem can become a legal, valuation or cash-flow problem after settlement |
For finance, the most useful pack is the executed lease plus every variation, incentive deed, side letter, disclosure statement, current rent ledger, outgoings reconciliation and details of any security held. A clean five-year lease can look very different once a twelve-month rent-free period, unrecoverable levies or an imminent market review is put back into the numbers.
If the transaction is being assessed primarily from the rent rather than your own business figures, lease doc commercial property finance explains that evidence path, and how the tenant sets your LVR goes deeper on why the tenant and lease can cap gearing before the property itself does.
How do special levies and the capital works fund affect your loan?
The lender is not worried about the levy you pay now. It is worried about the levy you cannot pay later. A special levy lands on your lot, not on the scheme's balance sheet, and it competes with your loan repayment for exactly the same cash. That is the whole of the risk, and two New South Wales rules make its shape concrete.
First, the scheme is not allowed to simply hope. "Your strata scheme must have a 10-year plan of expected major work that will be paid from the capital works fund." That plan "is reviewed at least every five years" and "must be considered at each AGM". The capital works fund was "previously called a 'sinking fund'", which is why older reports, older certificates and older lender checklists use two names for the same money. Second, when work genuinely cannot wait, the notice period is short: where the owners corporation needs to raise funds for emergency repairs addressing a serious and imminent threat to health or safety, it must give written levy notice with "at least 14 days to pay (instead of the normal 30 days notice)". nsw.gov.au, strata levies, finances and insurance, last updated 22 June 2026, read 18 September 2026. New South Wales; every other state sets its own fund requirements and its own notice periods, so do not read these as national rules.
There is a third fact that explains why a lender reads levy arrears as hard as it does, and it is not the amount. Queensland government guidance warns that "not paying levies on time may attract a high rate of interest (up to 30% per year) and additional costs". qld.gov.au, buying a body corporate property, last updated 18 May 2026, read 18 September 2026. Queensland; each state sets its own maximum interest on unpaid contributions, so do not read 30 per cent as a national figure. Arrears on a lot are not a static debt. They compound, and at least one state puts the consequence for a buyer in the Act itself: in Western Australia the owner of a lot is liable for unpaid contributions and interest "jointly and severally with any person who was liable to pay that contribution and interest when that owner became the owner of that lot". Strata Titles Act 1985 (WA) s 100(6), read 18 September 2026. Western Australia. We have verified this limb in that state only; do not read it as the national position, and ask your solicitor how your state handles it. In plain terms, the debt follows the lot, and buying the lot can mean buying the arrears.
The certificate is what protects you, which is the practical reason to order it early rather than a procedural one. In New South Wales the section 184 certificate is understood to be conclusive evidence of the matters stated in it in favour of a buyer taking the lot for value, so an outstanding levy that the scheme fails to record on the certificate is generally not the purchaser's problem. Industry guidance on ss 184 and 185 of the Strata Schemes Management Act 2015 (NSW), read 18 September 2026. New South Wales, and this is a strata industry reading of those sections rather than a quotation from them; confirm it with your solicitor before relying on it. That is also why a scheme with widespread arrears reads worse to a credit assessor than the raw dollar figure suggests: it is a scheme whose own income is deteriorating while its costs are not.
There is a related question the published guidance leaves almost untouched, and it is the one buyers actually argue about: who pays a special levy struck after you exchange but before you settle. It is a contract question rather than a strata one, it turns on the adjustment clause and on what the certificate said at its date, and it is worth putting to your solicitor in those words before you sign rather than discovering it at settlement.
And here is the part that almost nothing published on this topic gets right, because it is only visible once you read four states side by side: the obligation to have a plan at all is not national, and in two states a small commercial scheme does not have one. The New South Wales rule above applies to every scheme. The other three states do not work that way.
In Queensland a body corporate must have a sinking fund if it is registered under the Standard, Accommodation, Commercial or Small Schemes Module, and the sinking fund budget must "reserve an amount to meet likely spending for at least 9 years after the current financial year". So a commercial scheme is squarely inside the obligation. What is not required is anyone qualified: the guidance says a body corporate "does not have to get a professional sinking fund forecast" and that "the committee or an owner can estimate the likely spending requirements". qld.gov.au, sinking fund, last updated 7 February 2018, read 18 September 2026. Queensland. The page is old for a government page, so confirm the module position before relying on it.
Victoria and Western Australia both set a size threshold, and most small commercial buildings fall under it. In Victoria only tier one and tier two owners corporations must have a maintenance plan and a maintenance fund, and Consumer Affairs Victoria says plainly that "tier three, tier four and tier five owners corporations are not required to have a maintenance plan, but may choose to do so". Tier three is 10 to 50 occupiable lots and tier four is 3 to 9, so a twelve suite office building has no obligation at all. consumer.vic.gov.au, owners corporation maintenance plan, last updated 12 May 2026, read 18 September 2026, and the Consumer Affairs Victoria tiers page for the lot ranges. Victoria. In Western Australia the duty to hold a reserve fund and a ten year plan, revised at least once in each five years, falls only on a designated strata company, which means a scheme of ten or more lots, or one whose building replacement cost exceeds five million dollars. Strata Titles Act 1985 (WA) s 100, with the extended meaning in reg 79 of the Strata Titles (General) Regulations 2019, read 18 September 2026. Western Australia.
| State | What the fund is called | Who must have a long term plan | What that means for a small commercial lot |
|---|---|---|---|
| New South Wales | Capital works fund, previously a sinking fund | Every scheme: a 10 year plan, reviewed at least every 5 years and considered at each AGM | There should always be a plan to read. If there is not, that is a finding about the scheme |
| Queensland | Sinking fund | Schemes under the Standard, Accommodation, Commercial and Small Schemes Modules, budgeting at least 9 years beyond the current year | A commercial scheme is inside the obligation, but the forecast behind it need not be professionally prepared |
| Victoria | Maintenance fund, under a maintenance plan | Tier one and tier two only, meaning more than 50 occupiable lots | A scheme of 3 to 50 lots has no obligation. Most commercial strata buildings sit here |
| Western Australia | Reserve fund, under a 10 year plan | Designated strata companies only: 10 or more lots, or a replacement cost above five million dollars | A scheme under 10 lots and under the cost threshold has no obligation |
Sources, all read 18 September 2026: nsw.gov.au strata levies, finances and insurance; qld.gov.au sinking fund, last updated 7 February 2018; consumer.vic.gov.au maintenance plan, last updated 12 May 2026, with the tiers page for lot ranges; Strata Titles Act 1985 (WA) s 100 with reg 79 of the Strata Titles (General) Regulations 2019. South Australia, Tasmania, the ACT and the Northern Territory are not covered here because we have not read them at source. Thresholds and modules change, so confirm the current position for the scheme you are buying into.
The consequence for your application is not the one people expect, and it cuts both ways. An absent plan in Melbourne or Perth is usually lawful rather than negligent, so a lender that treats its absence as a red flag is misreading the building. But lawful is not the same as funded. The lift still ages, the roof still fails, and where there is no plan there is no funded provision either, which means the money arrives as a special levy on a scheme that never had to see it coming. The New South Wales emergency levy rule shows how short that notice can be.
So the question to ask changes with the postcode. In New South Wales, and in a Queensland scheme, ask for the plan and the fund balance together and read one against the other. In Victoria under 51 lots, or Western Australia under 10, ask whether the scheme has chosen to do one anyway. A small scheme that plans when it does not have to is telling you something good about itself, and it is the single cheapest signal of a well run commercial building you can get before you exchange.
Read together, those facts are the underwriting question in full. A ten-year plan with a funded balance behind it means major work arrives as a budgeted levy you could see coming. A ten-year plan with nothing behind it means the same work arrives as a special levy, and in the worst case on a fortnight's notice. That is why a lender reads the fund balance against the plan rather than looking at either on its own, and why an underfunded scheme can affect your pricing even when nothing is currently wrong with the building. What that pricing looks like across commercial generally is on what commercial property loan rates run at.
Scenario: a funded plan and an unfunded one, same building
Two lots, same size, same street, both with a ten-year plan naming a lift replacement in the next few years. In the first scheme the capital works fund has been levied steadily against that plan and the balance is in sight of the job, so the work will arrive as a budgeted levy and the lender treats it as a known cost. In the second the plan exists, the fund has been kept deliberately low to hold levies down, and the same job will have to be raised almost entirely as a special levy when it falls due. Nothing is wrong with either building today, and the second scheme has the lower levies right now, which is what makes it look like the better buy. To a lender it is the higher risk, because the money still has to come from somewhere and the somewhere is your lot. Ask for the fund balance and the plan together, never one without the other.
Can the owners corporation stop you running your business from the lot?
Possibly, and this is the question the accessible guidance does not answer. There are two separate gates and people routinely assume clearing one clears both. Zoning and the development consent decide whether your use is permitted on the land. The scheme's own registered rules decide whether it is permitted in that building. You can pass one and fail the other, and the document nobody reads is the second one.
The New South Wales guidance on by-laws is detailed about a great many things and silent on this one. It says by-laws cover "things like pets, parking, noise and smoking", and sets out what they cannot do: conflict with existing laws regardless of when they were made, be "harsh, unconscionable or oppressive", stop someone "from selling or leasing their lot", ban children, or stop a resident having an assistance animal. Changing one takes a "special resolution" where "no more than 25% of votes can be against the by-law", plus registration with NSW Land Registry Services within six months of approving the change, and the change is "not valid or enforceable until they are registered by NSW LRS". What that page never addresses, anywhere, is whether a by-law can restrict a business use. nsw.gov.au, by-laws, last updated 22 June 2026, read 18 September 2026. New South Wales.
One state does address it directly. Consumer Affairs Victoria, listing what an owners corporation can make rules about, includes "use of lots - rules could govern changes in use. For example, from residential to commercial". consumer.vic.gov.au, what an owners corporation can make rules about, last updated 12 November 2021, read 18 September 2026. Victoria only, and as far as we can find it is the only accessible government page in the country that says so in terms.
That guidance is not the end of it, though, and the other half matters just as much to a buyer who intends to trade from the lot. A scheme's power to make rules is not the same as a power to ban a use, and a Victorian tribunal has said so on facts squarely on point. In Lawandi v Owners Corporation 21842D, decided in October 2015, the Victorian Civil and Administrative Tribunal held that a rule prohibiting a particular type of use of a lot was beyond the rule making power in section 138 and Schedule 1 of the Owners Corporations Act 2006, with the Vice President finding that the power to make rules for and with respect to a change of use of a lot "cannot be construed to allow an OC to make a rule prohibiting the change of use of a lot". The building was a commercial one and the rule was aimed at stopping a residential use, but the reasoning runs the other way just as readily. Reported by the law firm acting for the successful applicant, read 18 September 2026. Victoria, a 2015 first instance tribunal decision rather than an appellate one, and rules elsewhere are made under different Acts. This is not legal advice on your scheme.
So the honest position is narrower than "the owners corporation can stop you", and it is more useful. A registered rule aimed at your intended use is a real obstacle in practice, because you would have to challenge it, and challenging it costs time you do not have inside a finance clause. But it is not automatically valid merely because it was passed and registered, and the limits on the rule making power are worth raising with your solicitor rather than treating the rule as the final word. Zoning, by contrast, is not negotiable on those grounds at all.
The consequence is simple and it is about sequence. Read the registered by-laws or rules before you exchange, not after, and read them against the use you actually intend rather than the use the lot currently has. A change of use inside a building can also be a change of use for planning purposes, and where a building holds both commercial and residential lots the rules tend to be tighter still, which a mixed use building deals with. If your plan involves a lot that has been sitting empty, fitting out and funding a food premises is the related read.
What should an owner-occupier verify before exchange?
Clear four gates separately: planning, scheme rules, physical services and fit-out approval. Finance approval does not prove that your business can legally or practically operate from the lot.
- Planning and permitted use. Confirm the use with the relevant council or planning authority and identify any development approval, change-of-use or operating conditions. A lease description or agent's statement is not a planning approval.
- Scheme by-laws, rules and management statement. Check signage, trading hours, customer access, parking, loading, deliveries, waste, noise and any rules specific to the commercial component of a mixed-use building. NSW Government guidance specifically notes that mixed-use schemes can have a management statement setting additional rules for shared facilities.
- Services and compliance. Confirm power, data, water, air-conditioning capacity, exhaust, grease trap, fire and essential-services requirements, disability access, waste handling and any other infrastructure your business actually needs. The lender can finance a perfectly saleable shop that is useless for your intended operation.
- Fit-out and common-property approvals. Work affecting walls, floors, ceilings, services or common property can require scheme approval as well as council or building approval. NSW Government renovation guidance is explicit that larger works and work affecting common property can require owners-corporation approval and, in some cases, a by-law.
Scenario: finance approved, business use fails
A buyer obtains formal approval for a small ground-floor shop intending to operate a food business. The shop itself is acceptable security. After exchange the buyer discovers the existing exhaust cannot be extended through common property without owners-corporation approval and the building's waste and grease infrastructure is inadequate for the proposed use. The loan was never the problem. The premises were. The only reliable sequence is to test the intended operation before the finance clause becomes the only remaining condition.
Do not assume the property loan includes the fit-out. Some transactions can fund property and works together, but the fit-out may need a separate equipment, business or working-capital facility and may be valued at less than its cost because it is specific to your business. Build the property deposit, fit-out budget and trading buffer as three separate numbers before you sign.
Should you buy in a company, a trust or a fund, and when do you decide?
Decide before you exchange. That is the part that matters more than which structure you pick, because the entity named on the contract is the borrower the lender assesses, and changing it afterwards is normally a fresh contract with duty assessed again rather than a correction. It is the one decision on this page that is cheap on Monday and expensive on Friday.
Which structure suits you is a tax, duty and asset protection question, and it belongs to your accountant and your solicitor rather than to a finance page. What follows is only what each choice does to the finance, so that you can have the conversation with them knowing what it costs you at the lender end.
| Buying entity | What it changes in the assessment | What it does not change |
|---|---|---|
| Your own name | The simplest assessment: your income, your assets and your other commitments | The scheme's records are read in exactly the same way |
| A company | Directors normally give guarantees, so you are assessed alongside the company | The lot still has to satisfy the lender's commercial security policy |
| A discretionary trust | The trust deed is read, and the trustee and the beneficiaries are assessed | The floor area and the strata records apply unchanged |
| A self managed super fund | A limited recourse borrowing arrangement, a much narrower lender panel and stricter rules about the security itself | The fund's own rules on business real property and arm's length dealing still apply, which is a question for your adviser |
| A change of entity after exchange | Usually a fresh contract rather than an amendment, so duty is assessed again and the credit assessment restarts | Nothing at all about the lot or the scheme |
Structure is a tax, duty and asset protection question for your accountant and your solicitor, and stamp duty is state based. This table is the finance consequence only, and lender appetite for each entity type moves over time.
The fund route is the one that most often surprises people, because the lender panel narrows sharply and the rules attach to the security rather than to you. commercial property inside an SMSF is the starting point there. If the lot you are buying is the premises you are already leasing, the entity question usually arrives alongside a landlord negotiation, and buying the premises you already lease covers that sequence.
How long a finance clause do you need on a commercial contract?
For a strata commercial purchase, 21 to 30 days is a practical negotiating target where the vendor will agree; it is not a legal minimum and the clause itself must be drafted for your transaction. Fourteen days can be thin because formal approval may depend on a commercial valuation, lease review and scheme records that are all controlled by different people.
Do not confuse a finance clause with an automatic right to walk away. The wording can specify the lender, amount, deadline, notice method and evidence required. If finance is not approved, your solicitor may need to give notice exactly as the contract requires. At auction or under an unconditional contract, there may be no finance protection at all.
- Before signing: have the broker test the property type, lot size, postcode, borrowing entity and likely LVR.
- On contract day: send the signed contract to the broker and solicitor immediately and order the scheme certificate and records search.
- In parallel: give the lender the lease, outgoings, strata documents and anything the valuer needs rather than waiting for requests one by one.
- Before the deadline: require written confirmation of unconditional or formal approval, not only an indicative approval or term sheet.
- If something slips: ask your solicitor to seek an extension before the clause expires. Do not assume silence extends it.
Scenario: nothing went wrong, but the clause still runs out
The lender orders the valuation immediately. The valuer then asks for the lease and scheme records. The body corporate information arrives within its normal statutory turnaround, but because it was ordered only after the valuer asked, the valuation cannot be signed off before the finance date. The lender is not slow and the owners corporation is not late. The sequence was wrong. The fix is parallel ordering from day one.
Have your solicitor settle the legal wording. From the finance side, the key is to make the clause long enough for the whole chain, not merely for the credit assessor once every document is already in the file.
What should happen from signed contract to settlement?
The safest process is parallel: finance, valuation, legal due diligence and scheme due diligence run at the same time, then converge before the contract becomes unconditional. A sequential process wastes the finance clause on documents that could have been ordered on day one.
| Stage | Finance task | Property and legal task | Failure to avoid |
|---|---|---|---|
| Before exchange | Indicative lender fit, borrowing structure, LVR and evidence path | Contract review, entity decision, GST treatment, title/parking rights, lease position, zoning and intended-use check | Signing in the wrong entity or without enough finance protection |
| Day 0 to 2 | Lodge full application and order valuation | Order scheme certificate, records search, title and other due diligence | Waiting for the lender or valuer to request documents one at a time |
| Due diligence window | Answer valuation and credit questions quickly | Read minutes, funds, defects, litigation, rules, title plan, parking/storage rights, lease and outgoings | Treating the statutory certificate as a defect report |
| Before finance date | Get written formal approval and clear material conditions | Decide whether property findings change the contract or the purchase | Letting the finance clause expire on an assumption |
| Before settlement | Satisfy lender conditions, execute documents and confirm funds to complete | Insurance, duty, GST, settlement adjustments and final searches | Discovering late that duty, GST or valuation shortfall was never funded |
| After settlement | Know review/expiry dates and repayment structure | Notify the scheme, arrange lot-specific insurance where required, obtain fit-out/use approvals before works | Assuming ownership itself authorises the business use or fit-out |
This is also where the customer journey branches. An owner-occupier usually moves next into fit-out, council approval, signage, services and relocation. An investor moves into lease management, rent reviews, tenant options and outgoings recovery. The loan is only one part of the purchase, which is why solving the property and contract risks before formal approval is usually cheaper than solving them after.
Which lenders take small strata commercial security, and who declines it?
All three tiers will look at it, and they decline it for different reasons. We do not name lenders on these pages, and that is deliberate rather than coy: security policy on small strata lots changes faster than any page can track, and the criteria travel far better than the names do. What follows is the pattern, and it has been stable for years even as the individual policies have moved.
Banks offer the sharpest pricing and run the tightest security policy. A floor area under their published minimum, an unresolved defect, or litigation the scheme is a party to tends to be a decline rather than an opening position, and the decision is usually made on policy rather than on the merits of your file.
Non-banks carry more room on the lot itself and on how income is evidenced, which is where a low doc commercial or lease doc commercial property assessment comes in for a self-employed buyer whose figures are sound but whose paperwork is not yet complete.
Private lenders will take a lot when the scheme's paperwork is genuinely unresolved and the timeframe is short, priced for that risk and written against an exit rather than a long term. That is a tool for a specific problem, not a substitute for a term facility.
The pattern worth carrying away is that a lot is rarely refused for one reason. It is refused because two things arrive together, most often a small lot and an underfunded scheme. Fix either one and the conversation usually reopens. For the wider view of how this cluster fits together, the property lending hub collects the related lanes, and industrial and warehouse commercial property finance covers the adjacent industrial and warehouse security type.
Do you pay GST on the purchase, and do the levies carry GST?
GST can apply to a commercial strata purchase, but it is not automatic, and the contract treatment needs to be understood before you sign. A taxable commercial sale, a GST-free going concern and a transaction using the margin scheme can produce very different cash-flow and input-credit outcomes.
The ATO says a leased commercial property may be sold GST-free as a going concern where the statutory conditions are met, including that the purchaser is registered or required to be registered for GST and the parties agree in writing that the sale is of a going concern. If the margin scheme is used on an eligible taxable sale, the purchaser cannot claim a GST credit for the GST embedded in that purchase price. See the ATO's property GST guidance.
Do not use the GST treatment as a finance assumption until your accountant and solicitor have confirmed the contract. A buyer who expects to recover GST later may still need enough cash or facility headroom to settle first, depending on how the contract is structured and when credits are available.
When the scheme itself must register for GST
- $75,000Registration threshold for an owners corporation that is not treated as a non-profit body. Turnover includes levies on unit owners. ATO, strata schemes.
- $150,000Threshold where the owners corporation is considered a non-profit body. ATO, strata schemes.
The ATO states that once an owners corporation is registered for GST, the fees or levies it charges members include GST. Owners of commercial units that are themselves registered may be entitled to input tax credits where the normal rules are satisfied. Confirm your own treatment with your accountant.
For the lender, levies are still an outgoing whether or not GST is embedded in them. For you, the distinction affects cash flow and tax treatment. Ask two separate questions: is the property sale taxable, GST-free or margin-scheme, and is the owners corporation itself registered for GST?
What if a lender has already declined the lot?
Find out which of three things the decline was about, because two of them are usually fixable and the letter almost never says which. Most people who arrive at this point assume the purchase is dead. Often it is not, and what is actually dead is the application at that one lender. The three causes are the lot, the scheme and you, and they need completely different responses.
The lot. Floor area under that lender's unpublished minimum, no separate services, or a fit-out so specific that only one kind of occupier could use it. This is a policy decline rather than a judgement on your file, which means it is the most reopenable of the three: the same lot can sit inside another lender's policy without a single figure changing. Nothing about your paperwork needs to improve. The lender needs to change.
The scheme. An unresolved defect with no funded plan, litigation the owners corporation is a party to, material arrears across the lots, or a ten year plan with nothing behind it. At bank level this is usually a decline rather than an opening position. Below bank level it is often a pricing and structure question instead, and sometimes it becomes a condition that the work be resolved or the levy be struck before settlement. This is the one where the answer can genuinely be no, and it is worth knowing that early rather than after three more applications.
You. Income evidence that does not fit a full doc assessment, a structure the lender will not lend to, or existing commitments. That is the ordinary self-employed problem and it usually routes to a low doc commercial or lease doc commercial property assessment rather than to a different security.
Two practical points that cost people deals. First, a decline on floor area is not a valuation problem, and re-ordering the valuation to argue the point burns days of a finance clause you cannot get back. Second, a decline usually arrives late, because the strata documents arrived late, which means the clause is already short when the news lands. Ask for an extension the day you are told, not the day you have decided what to do about it. If the decline was about the scheme rather than the lot or you, say so when you ask, because a defect that needs an owners corporation resolution is a timetable nobody can compress.
Been knocked back on a strata office or shop and not sure which of the three it was? Send us the lot details and the decline reason and we will tell you whether it is a lender problem, a scheme problem or a file problem, before you spend another week of your finance clause on it.
Talk to a BrokerIs a "strata loan" the same as a loan to buy a strata office?
No, and the two are confused constantly because they share a phrase. In Australia "strata loan" almost always means something else entirely: borrowing by the owners corporation itself, to fund remedial work or a special levy across the whole scheme. That is a facility taken out by the body corporate, secured on the scheme's ability to levy, and repaid through the levies every owner pays. It is a legitimate product and it is not what this page is about, which is worth saying because the two sit under the same words and the search results mix them freely.
This page is about you borrowing to buy one lot: an office suite or a shop on a strata plan, financed as commercial security in your own name, your company, your trust or your fund. If you came looking for the scheme's own facility, this is the wrong page. If you are buying the lot, start with how commercial property loans work, then the commercial property loans page, and if the purchase is part of funding a wider business move, business lending is the other lane.
A strata titled office suite or shop is financed as commercial security, and nothing about the title type makes it exotic. What makes it different from a freehold purchase is that a third party you do not control is inside your application. The scheme's funded plan, its minutes, its arrears and its registered rules are read alongside your own figures, and a small lot in an underfunded scheme is the combination that gets refused. Almost every one of those things is checkable before you exchange, and almost none of it is checkable afterwards.
Key takeaway: order the strata search and read the registered rules before you exchange, because that is the only point at which what they say can still change your terms.Frequently Asked Questions
Yes. A strata titled office suite or retail shop is ordinary commercial security. The title type itself is not the problem. Lenders assess the lot, its saleability, the scheme records, the lease position and the borrower together.
It checks whether the scheme is funded, insured and not in dispute. The core records are the scheme certificate or statutory information certificate, the records or inspection search, recent meeting minutes, the levy position and the capital works, sinking, maintenance or reserve fund, depending on the state. What moves the terms is an unresolved defect with no funded plan, litigation the scheme is a party to, or widespread levy arrears.
It is a section 184 certificate in New South Wales, an owners corporation certificate under section 151 of the Owners Corporations Act 2006 in Victoria, a body corporate certificate on BCCM form 33 or 34, or BUGTA form 18, in Queensland, and a section 110 certificate under the Strata Titles Act 1985 in Western Australia. The deadlines differ too: Victoria requires it within 10 business days of the application and fee, Western Australia within 14 days and it is an offence not to provide it, and the Strata Community Association of New South Wales, reading section 184, says the New South Wales certificate must be given no later than 14 days after a written request.
No, and this is the most common misunderstanding on the topic. In every state the statutory certificate is a financial and administrative snapshot rather than a building condition report. Victoria’s section 151 certificate does have to disclose liabilities and contingent liabilities including any arising from legal proceedings, which is more than the others require in those terms, but the defect history itself sits in the meeting minutes and the search or inspection report. Queensland government guidance tells buyers to separately request the minutes and the financial information that is not on the certificate, and Western Australia is starker still: section 110 does not require the accounts, the minutes, the ten year plan or any defect report.
The finance you arrange at exchange is not the finance you settle with. The lot may not yet have its own registered title, the finished property cannot be inspected as completed security, and the scheme may have no trading history, so the real test happens again near completion when the title, the finished lot, a current valuation and your current position all exist at once. Western Australian government guidance lists changed lending policy, changed financial circumstances and changed interest rates among the finance risks of that delay. Valuers can work on an "as if complete" basis, but that assesses a proposal rather than a finished building.
Usually yes, and it is set by each lender in policy rather than by law. It is a resale test rather than a test of your business: a very small lot has a thin buyer pool, so it is harder to sell as security. On the lots we have placed the workable band starts at roughly 40 to 50 square metres and above depending on the lender tier, which is indicative only and not a quote.
Not necessarily, and the strata plan rather than the brochure decides it. A car space or store can be part of the same lot, a separate titled lot, common property, or a right to use common property under the scheme rules, and those are economically different positions even when an agent describes all four as coming with parking and storage. Secure transferable parking widens the resale and tenant pool; a revocable allocation does not. Establish which one you are buying before you exchange, because it changes both the value and what the lender takes as security.
A commercial deposit rather than a residential one, and a strata lot gets no concession for being small or new. The figure comes from the lender’s commercial policy, the lease position if the lot is tenanted, and your own numbers.
As commercial security, on a basis that changes with whether the lot is vacant, owner-occupied or sold with a lease. The valuer tests saleability, market rent, lease strength, outgoings, floor area, access, parking, fit-out, zoning and the condition of the scheme around the lot. Two identical suites can support different loan amounts if one carries a strong lease and the other is vacant. Watch the shortfall: if you agree to pay $1,000,000 and the lender adopts $950,000, an 80% LVR produces $760,000 rather than $800,000, and you fund the gap to price before duty and costs.
Yes, because the two are tested against different income. If you will occupy the lot, the lender assesses your business trading and your intended use has to clear both the zoning and the scheme’s own registered rules. If you are buying it tenanted, the lease does most of the work, and a short remaining term reduces how far the lender will gear regardless of the rent. Neither route is the easier one in general.
Read the lease as a second security document, because the rent on the brochure is not enough. What matters is how long the income is actually locked in, what the tenant really pays after incentives and outgoings, what security sits behind the tenant’s obligations, and what the lot would earn if that tenant left. Check the remaining firm term against options that are exercisable but not yet exercised, the tenant covenant, the rent review method, the outgoings recovery, and any side arrangement that makes the effective rent differ from the face rent. Retail leasing law is state based, so have your solicitor apply the rules for that jurisdiction.
A special levy lands on your lot and competes with your loan repayment for the same cash, so the lender reads the fund balance against the plan rather than either on its own. In New South Wales a scheme must have a 10 year plan of expected major work paid from the capital works fund, reviewed at least every five years, and where funds are needed for emergency repairs addressing a serious and imminent threat to health or safety the levy notice can give "at least 14 days to pay (instead of the normal 30 days notice)" (nsw.gov.au, read 18 September 2026, New South Wales). A funded plan means a budgeted levy you could see coming. An unfunded one means the same work arrives as a special levy.
No, and this is the state difference that catches buyers out. New South Wales requires every scheme to keep a 10 year capital works plan. Queensland requires a sinking fund under the Standard, Accommodation, Commercial and Small Schemes Modules, though the forecast behind it need not be professionally prepared. Victoria requires a maintenance plan and fund only of tier one and tier two owners corporations, meaning more than 50 occupiable lots. Western Australia requires a reserve fund and 10 year plan only of a designated strata company, meaning 10 or more lots or a replacement cost above five million dollars. So a small commercial scheme in Victoria or Western Australia may lawfully have no plan at all, and its absence is the law rather than a red flag.
They can, and it depends on your state and on the certificate. Western Australia puts it in the Act: under section 100(6) of the Strata Titles Act 1985 the owner of a lot is liable for unpaid contributions and interest jointly and severally with the person who was liable when they became the owner. In New South Wales the section 184 certificate is understood to be conclusive evidence of the matters stated in it in favour of a buyer taking for value, so a levy the scheme fails to record on the certificate is generally not the purchaser’s problem. Who pays a special levy struck between exchange and settlement is a contract question, and one to put to your solicitor before you sign.
It usually changes the answer more than anything in your own file does. An unresolved defect with no funded plan behind it, or litigation the scheme is a party to, tends to be a decline at bank level and a pricing question below it. Where the scope is still unknown it is hardest of all, because nobody can size the levy that is coming. Order the records search before finance approval rather than after, so that a finding can still change your terms while there is time to use it.
Possibly, and zoning is a separate gate you also have to clear. Consumer Affairs Victoria says an owners corporation can make rules about "use of lots - rules could govern changes in use. For example, from residential to commercial" (consumer.vic.gov.au, read 18 September 2026, Victoria only). But a scheme’s power to make rules is not a power to ban a use: in Lawandi v Owners Corporation 21842D (2015) the Victorian Civil and Administrative Tribunal held that a rule prohibiting a particular type of use of a lot was beyond the rule making power. A registered rule aimed at your use is still a real obstacle, because challenging it costs time inside a finance clause, but it is not automatically valid. Read the registered rules against your intended use before you exchange.
Decide before you exchange. The entity named on the contract is the borrower the lender assesses, and changing it afterwards is normally a fresh contract with duty assessed again rather than an amendment. Which structure suits you is a question for your accountant and your solicitor; if a fund is in the mix, expect the lender panel to narrow sharply.
Longer than a residential one, because the commercial valuation cannot be completed until the lease, the outgoings and the scheme’s paperwork are all in. The scheme’s certificate alone has a statutory turnaround of 14 days in New South Wales and Western Australia and 10 business days in Victoria, the search report is a separate order in a separate queue, and neither moves faster because you are in a hurry. Set the clause to the whole sequence rather than to how long the lender takes.
Run finance, valuation, legal due diligence and scheme due diligence in parallel rather than in sequence, then converge before the contract goes unconditional. Order the scheme certificate, the records search and the title searches on day one alongside lodging the application and instructing the valuer, rather than waiting for the valuer to ask. Read the minutes, funds, defects, litigation, rules, title plan, parking and storage rights, lease and outgoings inside the due diligence window, get written formal approval before the finance date, and confirm duty, GST and any valuation shortfall are funded before settlement.
All three tiers will look at one, and they decline for different reasons. Banks price sharpest and run the tightest security policy, so a lot under their floor area minimum or a scheme with an unresolved defect tends to be a policy decline. Non-banks carry more room on the lot and on how income is evidenced, which is where an alternative income assessment fits for a self-employed buyer. Private lenders will take a lot with genuinely unresolved paperwork on a short timeframe, priced for that risk and written against an exit.
Usually yes, and if you are GST-registered and buying the lot for your business you can generally claim the GST included in the purchase price, unless the seller used the margin scheme (ato.gov.au, read 18 September 2026). A sale can instead be GST-free as a going concern, but only where all three ATO conditions are met, including a written agreement between purchaser and seller that the sale is of a going concern.
They can, and it depends on the scheme rather than on your lot. An owners corporation must register for GST above $75,000 turnover, or $150,000 if it is considered a non-profit body, and "turnover must include levies on unit owners"; once registered, "the fees or levies it charges members will include GST" (ato.gov.au, read 18 September 2026). Owners of commercial units registered for GST may be entitled to an input tax credit where the lot is used for their business, which is a question for your accountant. It matters to the lender because levies are an outgoing in the assessment it runs.
Not necessarily, and the first job is working out which of three things the decline was about. If it was the lot, usually floor area or services, that is a policy decline at one lender and the same lot can sit inside another lender’s policy unchanged. If it was you, it usually routes to an alternative income assessment. If it was the scheme, an unresolved defect or litigation the owners corporation is a party to, that is the one where the answer can genuinely be no. Ask for an extension to the finance clause the day you are told, not once you have decided what to do.
No. In Australia "strata loan" almost always means borrowing by the owners corporation itself, to fund remedial work or a special levy across the whole scheme, repaid through the levies every owner pays. That is a legitimate product and it is a different thing from you borrowing to buy one lot. If you are buying an office suite or a shop on a strata plan, what you want is a commercial property loan secured on that lot.
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