You’ve found your dream home.
It’s an apartment in a well-designed block, and has all the features you need.
It’s in the area you want to live in, the building appears to be well maintained, and the other residents in the block seem welcoming.
You love it. So, what next?
Most apartment blocks in Australia are part of a strata scheme.
Before deciding to buy, it’s important that you understand what that means.
Taking a good look at the particular owners corporation for the property will also give you a good idea about the property you are potentially buying.
Is the building well managed, are there any expensive works being planned, will you be able to renovate your apartment, have any conflicts been noted?
Here are ten questions to help you understand strata properties, and if this property will be the right one for you.
What is a strata property?
A strata scheme is a building or group of buildings which have been divided into ‘lots’.
Lots may be an apartment, a townhouse, or a house.
Owners buy individual lots, and the common properly is owned collectively by all the owners.
Strata title is an Australian innovation that has been copied around the world.
What do you actually own?
Usually, with strata buildings you own the inside of the property, or ‘lot’.
You own all internal walls, floor coverings, and the ‘airspace’ within your boundary walls – including in courtyards or your own gardens.
Everything on your lot, you must maintain yourself.
What don’t you own?
You don’t know external walls, stairwells, or common gardens – these are collectively owned and maintained by the owners corporation.
Who’s in charge of the building?
An owners corporation manages the strata scheme.
The owners corporation usually appoints a strata managing agent to help them manage the scheme.
Usually a strata committee is appointed at the annual general meeting to represent all the lot owners.
The committee will make all owners corporation decisions.
How much does it cost?
When you own a strata property, you are required to pay strata levies.
Levies are usually paid quarterly.
Levies can vary enormously, even within the one block, depending on the size of the lot, as well as other things.
Strata levies cover the costs of cleaning, gardening, plumbing, electricity and building maintenance in the common areas.
They are usually allocated into two funds: an administrative fund for everyday owners corporation expenses, and a sinking fund for larger maintenance jobs.
Find out what the strata levies are, and make sure you can afford them on top of your mortgage repayments.
Don’t forget to add in other ongoing costs such as water and council rates.
Do I have to go to meetings?
It’s advisable to get involved with your owners corporation because it means you will be involved in the way the building is managed.
You will have a say in any decisions.
But you don’t have to.
At the very least you should attend the annual general meeting for an update on maintenance, finances, and other matters.
Are you happy with the by-laws?
By-laws are the rules that all member of the strata scheme must follow.
They relate to matters such as parking, noise, and pets in the building.
If you have a dog, will it be allowed to live in the building?
Do the owners corporation records hold any surprises?
It’s highly recommended that prospective buyers should look through the notes from the last few owners corporation meetings to see if any major works are proposed.
Also take a look at the financial account to make sure everything is in order.
Can I renovate my property?
Owners can do cosmetic work on their property – such as hanging pictures, replacing handrails within your lot, interior painting, and filling holes in interior walls – without having to seek owners corporation approval.
We will need to seek 50 per cent approval from the owners corporation to do minor renovations, such as renovating a kitchen, putting in hard floor surfaces, or changing internal walls.
Major renovations, such as structural changes, changes affecting the outside appearance of the building, and work that needs council approval, requires a special resolution vote by the owners committee.
(These rules apply in NSW, but they vary from state to state.)
What if I am buying off the plan?
If you are buying a property before a building is actually complete, the strata plan won’t be up and running yet.
Strata plans are usually only registered once a building is complete.
So, once you’re sure you understand what being part of an owners corporation means, and you’ve looked thoroughly into the history and plans for the building, you must decide if the apartment you fell in love with is still the right one for you?