If you’re buying or renting a home in Sydney’s inner city, there’s a good chance your new property will be strata title.
Maybe you’re buying your first home, downsizing or investing, and it’s your first experience with strata. Strata may seem complicated, but it’s really an effective way to run a building, and it can even make life easier for owners and residents.
Here’s what you need to know about buying and living in strata home.
How does strata work?
First introduced in 1961, today strata is the most common form of property title for apartments, units, townhouses and semi-detached homes in Australia.
Strata gives an owner an individual title to a part of a building (such as an apartment) and shared ownership of common areas such as hallways, lifts, stairwells, shared gardens, driveways and foyers. The portion of the building owned individually is known as a ‘lot’.
Strata schemes can consist of as few as two properties, such as a pair of townhouses or two semis, or as many as hundreds of units in a large apartment tower.
What do you need to know about owning a strata property?
Every lot owner automatically becomes part of the owners’ corporation, also known as the body corporate. Lot owners can get involved with decisions about common areas by voting at strata meetings.
The owners’ corporation elects the strata committee, which is the group that manages the day-to-day running of the strata scheme. The owners’ corporation and strata committee are responsible for the maintenance of the common property, building insurance, bylaws, finances and so on.
All owners are required to pay regular (usually quarterly) strata levies to pay for the upkeep and maintenance of the common property. When extraordinary or large works are required, such as replacing a roof, special levies are raised to pay for them.
Your rights and responsibilities as an owner are the same whether you live in the property or rent it out to a tenant.
What do you need to know about living in a strata property?
Every strata scheme is governed by bylaws, which are like the rules of the building. Bylaws are intended to protect the building and ensure the safety, comfort and security of its residents. There are standard NSW bylaws, but every owners’ corporation is allowed to institute its own special bylaws. They can relate to a whole range of issues, including noise restrictions, parking, pets and even where residents are allowed to hang their laundry.
Thinking of selling?
All residents, whether tenants or owner-occupiers, need to abide by the strata scheme’s bylaws. It’s a good idea to check a building’s bylaws before you buy or move into it.
What do you need to know before you buy?
If you’re thinking of buying a strata property, a strata search is a must. This can be carried out by a specialist strata inspector, or your solicitor or conveyancer can obtain the necessary information from the owners’ corporation.
The strata report will give you information about fees, special levies, fund balances, building works, insurance and bylaws. These details will form part of your decision making when you’re considering your purchase, as you’ll need to factor levies and costs into your budget and decide whether the bylaws suit your lifestyle.
The financial reports, meeting minutes and correspondence relating to any disputes in the scheme contained in the strata report ought to reveal whether there are issues concerning the lot you’re thinking of buying.
The strata records themselves can be revealing. Missing information could indicate a poorly run scheme.
Things to look out for in a strata report include:
- Any upcoming projects or works that will require a special levy.
- Whether the scheme has sufficient funds to maintain common areas.
- Whether the scheme has a plan to deal with any major building defects.
- A ten-year forecast of expected works. This future planning is required by law.
As with any property purchase, a building inspection carried out by a licensed builder, surveyor or architect is always strongly recommended.
Looking for more advice about buying or renting a strata property in inner-city Sydney? We’re here to help – get in touch today.