Whether you’re looking to buy a strata titled property as your own home or for an investment, it’s important to understand what strata is, how it works, and what costs are involved.
Strata titled properties are generally apartments, townhouses and units, and these are usually referred to as ‘lots’. A strata scheme can be made up of as few as two lots or it can be 100’s.
Key features of strata titled property
- You own your individual lot (your apartment, townhouse or unit)
- You also own part of the building and common areas. These could include entrances and lobbies, lifts, gardens, carparks and any recreational facilities such as pools and BBQ areas.
- You and all the other owners are responsible for the maintenance and upkeep of these common areas and buildings. This includes wiring, electricity, gutters, pool and lift maintenance, carpets etc.
- Owners are automatically a member of the ‘owner’s corporation’ which has a responsibility for common property and key decisions affecting the strata scheme
- You contribute to the cost of running the building through paying quarterly levies. This usually includes building insurance for your lot, but not contents insurance.
- You also have to pay into a capital works fund, for future long term expenses such as painting the building or replacing guttering
- There are lifestyle restrictions. For instance, there are rules (by-laws) that may affect where you park your car or hang washing, or whether you can keep a pet.
- If you want to make renovations or alter your lot, you need to know where the common property boundaries are; lot owners cannot make alterations to common property without approval from the owner’s corporation.
The owner’s corporation, made up of all the lot owners, effectively run and manage the strata scheme. It is responsible for maintenance, addressing issues and ensuring the scheme adheres to legislation such as the recent requirements for window and pool safety.
There is a strata AGM, where owners elect representatives to make many of the day-to day decisions about the scheme’s management. Meetings may also be held at other times of the year to discuss issues affecting the strata scheme.
While some corporations self-manage, many prefer to use a licenced a strata managing agent and some employ a building manager.
The corporation also has to adhere to strict rules about record keeping, such as accurately recording meetings and finances.
Strata schemes have been around for years, and last November new legislation was introduced to reflect modern living. For owners, getting renovations approved is now simpler and there are online options for meetings and voting.
Property owners also need to be aware, the new legislation does affect tenants. If at least half of the units in your scheme are rented, tenants can be represented on strata committees, and they are entitled to attend meetings of the owner’s corporation where major decisions are made.
Under the new legislation, owners must review the by-laws of their strata scheme by 30 November 2017. Make sure you are part of the conversations and meetings that could change the by-laws of your strata complex!
More information and a downloadable pdf document about strata can be found at www.fairtrading.nsw.gov.au and details about the new legislation can be found at the dedicated website www.stratalaws.nsw.gov.au
If you’re thinking of buying an investment property in a strata titled scheme and would like to know more or would like to know how our property management services can help, our talented and experienced team would love to share its knowledge with you.
We are one of Newcastle’s longest established real estate offices, so give us a call on 02 4954 8833, send us an email to email@example.com or pop into our Cardiff office for a chat.
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