Buying a strata property? Here’s what you need to know.
If you're considering buying a strata property – such as an apartment or townhouse – you’re probably aware it's different to buying a freestanding property, with one major distinction being the need to pay strata fees!
It can be daunting to embark on any type of property purchase, especially if you’re buying a strata property which may be subject to unique sets of rules and regulations. To help you navigate the strata system with ease, we’ve created this comprehensive guide covering everything you need to know - ranging from your responsibilities as an owner to the intricacies of strata fees and more.
What is a strata scheme?
Put simply, a strata scheme is a building or group of buildings that has been divided into 'lots'. The most common types of strata properties are apartments and townhouses, but serviced apartments, retirement villages and various types of commercial buildings can also be strata properties.
What happens when you buy a strata property
When you buy a property in a strata scheme, you become a lot owner. This means you own the inside of your property (e.g. internal walls, lights, window treatments, carpets, toilets, baths, kitchen cupboards etc.), while at the same time sharing ownership of common features such as gardens, external walls, roofs, fencing, pools, elevators, driveways and stairwells with other lot owners.
Lot owners automatically become members of the owner’s corporation, which manages how your strata scheme runs using the strata fees paid by owners.
What you can and can’t do in a strata property
Each strata scheme is governed by a set of bylaws designed to ensure safe and harmonious communal living and protect and maintain the property for all residents. The bylaws set out owners’ obligations relating to aspects such as rubbish disposal, noise restrictions and parking allocations, along with the extent to which you can alter or add to your property.
Schemes can have varying bylaws, so take time to understand the rules in any property you’re considering, particularly those that may impact your lifestyle or plans such as pet ownership, parking, use of amenities (BBQs, playgrounds, pools etc.) and the extent to which you can make alterations or additions to your property.
While by-laws cannot be ‘harsh, excessive, oppressive, or conflict with any law’ it is important to be aware that penalties or fines may be enforced if a bylaw is breached.
You can get a copy of the by-laws from the selling agent, and they must also be attached to the contract of sale.
What your strata fees cover
Owners of strata properties need to pay strata fees (also known as strata levies) to the owner’s corporation, which are usually (but not always) paid quarterly. These cover the management and upkeep of the building, and can vary depending on a property’s location, size, age and amenities, and which state the property is located in. Fees in buildings with a gym and heated swimming pool, for example, are usually higher than in buildings without such amenities.
Always factor in the cost of strata fees - which can vary by scheme - before your purchase and seek professional advice on whether the fees seem reasonable given the age and condition of the property.
How your strata fees are managed
Strata fees go into ‘funds’ managed by the owner’s corporation to maintain the building. This includes an ‘administrative fund’ for day-to-day costs (e.g., gardens, maintenance, insurance, strata management fees) and a ‘sinking fund’ for major building expenses (e.g. replacing roofing, lifts or fencing). Be aware that special levies may be imposed if sufficient funds aren’t available to pay for large capital works or other unforeseen expenses.
Make sure you get a strata report
Before committing to the purchase of a strata property make sure you get a strata search report to uncover crucial information about the building and strata scheme including how it is managed, its finances, insurance, building defects/planned works, and any existing or pending legal matters.
You can enlist a professional strata searcher or conveyancer to obtain the report or choose to inspect the strata records yourself. In the latter case, you will need the seller’s permission to contact the strata manager (or owner’s corporation secretary) and will also have to pay a fee to the owner's corporation.
Conclusion
As you can see, buying a strata property doesn't have to be intimidating. By understanding the intricacies of the strata system you'll be well-prepared to make an informed buying decision, ensuring your homeownership experience is a smooth and rewarding one.
For help and advice on buying property of all types, head to our buying page or reach out to your local Belle Property office or agent today. Read more articles on buying property on our blog.
Search our current range of premium properties currently for sale.