So you are thinking about buying an apartment or townhouse, but are you ready to navigate the ins-and-outs of strata living?
At first glance strata can seem complex, but in fact, it exits to make your life as an owner much easier, especially when it comes to understanding the property you are about to purchase.
Strata schemes are effectively small communities where the activities and attitudes of residents can have a significant impact on the satisfaction and enjoyment of others. Therefore, it is important to be aware of your responsibilities and obligations when you own or live in a strata unit.
Whilst strata living can provide a friendly community style environment, it helps to remember that it is not the same as living in a freestanding house. Some activities may be more restricted in a strata scheme, for example, where you can park your car, hang your washing or when and how you can renovate. Understanding these differences before buying or moving into a strata scheme can help reduce the likelihood of disputes over these activities later on.
One of the major differences between owning a house and owning a unit in a strata scheme is that the external walls, the floor and roof do not usually belong to the lot owner. These areas are usually common property and the maintenance and repair of these parts of the building is usually the responsibility of the owners’ corporation. As it is common property, the lot owner is not able, without permission of the owners’ corporation, to alter or renovate these areas, or install services such as cable television. As a further example, a lot owner is not allowed to put an additional window in a common property wall without obtaining owners’ corporation approval.
Before purchasing a strata lot, it is essential that the prospective buyer is clear on where the common property boundaries are. This information is available from the strata plan, which shows the layout of the strata scheme and the common property details. Close attention should be paid to items such as sliding doors leading to balconies, garage doors and balcony railings, as strata plans may differ on whether these items are part of the common property or not.
The role of the owners’ corporation is to look after the business of the strata scheme. To carry out this role, the owners’ corporation must set up and keep an administrative fund and a sinking fund. The owners’ corporation must estimate how much money is needed each year for the funds to cover all the expenses and needs of the strata scheme. The levy amount to be paid by owners is decided at each annual general meeting by a majority vote. All levies must be worked out based on the unit entitlements of each lot. Levies are usually paid every 3 months.
In addition, by-laws are a set of rules that all people living in a strata must follow. By-laws are made in relation to issues such as safety and security measures, floor coverings, the keeping of pets ect.
The key features of living in a strata scheme are:
- You own your unit or apartment as well as sharing ownership and responsibility for ‘common property’.
- If you own your unit, you are automatically a member of the ‘owners’ corporation’ which has responsibility for common property.
- Every 3 months you have to contribute to the cost of running the building through paying quarterly levies.
- You also have to pay money into sinking fund, for future long term expenses such as painting the building or replacement of guttering.
- Compared to living in a freestanding house, there will be lifestyle restrictions in a strata scheme, for example the are rules (by-laws) that may affect you doing renovations to your unit, that state where you can and cannot park your car, where you can dry washing or whether or not you can keep pets.
If you have any queries about owning a property, or purchasing a property – please don’t hesitate to get in contact with the team here at Fortis Accounting Partners. You can reach us on 02 9267 0108, or via info@exemplary-financial.flywheelsites.com.
