Things to consider before buying a strata property
Investing in a strata property can be a shrewd move, which is why more and more Australians are choosing to live in apartments rather than detached suburban dwellings. Not only is apartment living a more affordable way to enter the property market, it also offers minimal maintenance, the convenience of living closer to city centres, and a community atmosphere.
Strata living has many benefits, but it’s important to do your research when buying a strata property. Before you sign on the dotted line and move into your dream apartment, you’ll need to think carefully about whether you’re choosing the best property and community for you. Here are eight factors to consider carefully before buying a strata property.
Exactly what will I own?
As a general rule, each lot owner is considered to own the air space within the boundaries of their own lot – basically the inside of their apartment or unit. Any land or buildings that aren’t included in any lot are considered common property. Consider what your potential property will offer you and whether this will meet your needs. Find out:
- Are car spaces and garages included within your allotment, or do they fall under common property?
- What is covered in the list of inclusions? Most fixtures are included, but it’s wise to confirm.
- Will you have your own driveway, garden or courtyard?
- Are there any restrictions on the use of common property which might affect you?
What levies will I have to pay?
The fees paid by all owners fund the maintenance, repair and running of the building, and are an integral part of any strata scheme. Levies are one of the positive benefits of living in strata, as they allow you to let someone else take care of the property maintenance and upkeep, rather than having to take care of it yourself.
The actual amount of levies varies widely between different buildings, and depends on a number of different factors, so you’ll need to know how much you’ll be required to pay – and when. Keep in mind that levies can vary even between lot owners in the same building, depending on the size of each lot and what facilities are available to each lot.
Sometimes bodies corporate will find it necessary to request a special one-off levy from lot owners, usually to carry out an unexpected or especially large maintenance job. You obviously can’t predict if or when this type of levy will be necessary, but you can find out if your potential strata scheme has a levy such as this currently raised. If so, you’ll be required to contribute once you become an owner, so consider your purchase carefully to avoid getting lumped with a large share of the bill if you’ve just moved in.
What by-laws are in place at the scheme?
All strata schemes are controlled and regulated by by-laws, which cover the way owners must behave in relation to such things as noise, pets, parking, safety and security, use of the common property, damage and the appearance of the building. This is not an extensive list, and many other items may be applicable depending on each individual scheme. You’ll need to know whether the by-laws are a good fit for you or not before deciding to buy into the scheme, as they will affect your day-to-day life in many ways. Examine the by-lays thoroughly before you buy, as there’s no point buying into a strata scheme that applies by-laws you know you can’t or would prefer not to abide by.
Click here to discover the most common by-lays that apply in strata situations.
Who’s in charge of the scheme?
Strata properties are run by an owner’s corporation (or body corporate) which may include a body corporate committee which represents all the lot owners in the scheme. The committee makes decisions on all matters which affect the owners. If you want to have a say and be part of the decision-making process in your new building, consider if you would like to be part of the committee (and find out what that involves). If you’re happy to let other people make decisions on your behalf, at least find out who is on the committee.
In addition, larger strata schemes often employ the services of a professional body corporate management firm such as Capitol BCA, who help the committee to oversee and carry out the functions of the body corporate. Using the services of a management company will increase the levies you’ll need to pay, but will significantly decrease the level of involvement necessary for owners. If cost is likely to be a consideration, look for a building which is self-managed. If you don’t mind paying a little extra for expert and impartial management, find a scheme which is professionally managed.
Will I be allowed to have pets?
Strata legislation has become more pet-friendly than ever in recent times, but it’s still wise not to just assume that your pet will be welcome. It’s best to confirm whether Lassie or Whiskers will be welcome in the building before you buy into the scheme. If your pet is a non-negotiable, you can immediately rule out any buildings that won’t welcome your pet, and only consider ones that will. As well, you’ll need to check what by-laws will apply to your pet, so that you know your rights and responsibilities in relation to said pet.
Can I renovate my apartment?
Yes, you own your apartment, you’re not automatically free to make any renovations or changes that you want. While new regulations are making renovating units a bit easier these days, you will usually have to either notify or get approval from the committee for any minor or major renovations or structural changes. It’s wise to find out beforehand about the process you need to follow for renovations, and what level of approval is likely to be involved.
What is the history of the building?
If you’re a new owner, you don’t want to inherit a lot of maintenance and repair issues if you can possibly avoid it. Thus, it’s important to uncover the history of the property before committing to buy. Ask to see past committee meeting minutes and get familiar with what’s been going on. Find out if the building has experienced ongoing problems that have proven difficult or expensive to deal with in the past. As well, ask to see the maintenance schedule, to determine if the building has been adequately maintained in the past. If ongoing repairs seem likely to recur, you’ll need to decide if this is something you’re prepared to take on, or if you’d be better off finding a building with a cleaner history.
Do the numbers add up?
Before you buy into a strata scheme, you need to thoroughly investigate the financial side of things. Failing to scrutinise the financial records could leave you facing major expenses incurred by the previous owner, or even lawsuits. It’s also wise to make sure that the funds in the sinking fund are sufficient for the long-term maintenance planned for the next couple of years, or you might find yourself paying for issues that occurred before you even lived in the building. Make sure it’s a wise financial buy first before you commit.
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