Buying an apartment can be overwhelming. There’s finding the right property, negotiations, paperwork, mortgages and conveyancing. And then of course, there’s strata.
What is strata?
Strata (or strata title) is a property law that allows individual ownership of part of a property – for example a unit or a townhouse – within a block. It also entitles the individual to shared ownership of common property, such as a garden or foyer. It can apply to a range of different development types, residential and commercial.
How does strata impact the owner?
Strata owners will need to pay a levy to cover expenses such as council charges, maintenance, utilities and insurance. Strata insurance is compulsory Australia-wide because (as an owner) you will share unlimited liability for anything that goes wrong. Generally, a strata scheme will not affect your unit itself. However, you will need to comply with any by-laws, which can cover things like renovations and pets. Ownership of everything outside of your unit is shared with the other occupants or their landlords. Your exact rights, responsibilities and entitlements under your strata plan should be made very clear to you prior to purchase.
What affects strata rates?
Strata rates are usually determined annually by the owners, based on costs for the year prior. Your strata fees are likely to be higher if your property has lots of amenities which need to be maintained, such as a gym, lifts or pool. The age of the building and how well it has been maintained, are also likely to affect your rates.
Do I need a strata report?
Obtaining a strata report prior to purchase is imperative. This will give you a good understanding of what you are buying in to and help you to understand how well the building has been maintained, or if there are any disputes between owners. A badly managed strata scheme could cause headaches in the long term, and may even affect the resale value of your property. Make sure you are fully aware of all strata levies and by-laws so that there are no nasty surprises further down the line.