Strata developments refer to properties that share common areas such as staircases, access roads or parks. Most flats and subdivided plots in Australia have a strata title. In the article below, you will learn more about strata developments and the various considerations you should make when purchasing strata property.
How Do Strata Developments Operate?
By law, anyone that purchases a unit in a strata development automatically joins the owners' association. This is a body that manages and runs the strata development.
A committee of owners runs the owners' association. It is an executive committee consisting of a chair, secretary, treasurer and their assistants. Members elect the committee during the annual general meeting. Some strata developments have an owners' corporation manager that runs the property on a day-to-day basis under the supervision of the committee of owners.
Members contribute an annual fee to maintain and repair shared amenities. They also draft laws on the use of the common property. For instance, they may restrict people from parking along the access road. If the development has a swimming pool, members could decide opening and closing hours.
Tips When Buying Strata Property
Property with a strata title is significantly cheaper compared to property with a freehold title. As such, it has high demand and appreciates very fast.
Below are some useful tips to guide you when buying strata property.
Ask your conveyancer to organise a pre-purchase property inspection. The inspection will help you ascertain the structural integrity of the house, the condition of interior fixtures, pest control mechanisms and any defects the house may have.
Below are some tips to help you examine the strata bylaws:
- How much money do owners contribute to the maintenance of the shared property? How is the amount determined? Typically, people with larger plots should pay more.
- The property should be insured against risks such as fires and floods.
- Are there restrictions on how much the committee of owners can spend on repairs, improvements and renovations? This ensures the committee does not conduct unnecessary improvements that do not add value to the property.
- What activities are restricted in the development? For example, the owners' association may restrict members from keeping pets or holding loud parties at night. They may also prohibit particular renovations.
Check the current liabilities. For instance, if the owners' association has a loan, you may have to contribute repayments.
Buying strata property should be easy with the above tips. Inspect the property and check the strata bylaws and any liabilities you will assume once you purchase the property.Share