Buying a strata property: what you need to know
The dream of property ownership has definitely changed with the times, and apartment ownership is a clear example of that. The old housing ideal used to be a freestanding house with a manicured lawn and a white-picket fence, but things have changed. People are busier, less interested in maintaining outside areas and looking for more affordable entry points in the property ladder. Apartments are also usually more conveniently located for shorter commutes and better entertainment options.
This isn’t a compromise either. Apartments are cheaper to maintain, typically closer to the city and easier to keep clean and take care of. With more people opting to live in apartments, however, more people are learning what strata and building management bodies are. And if you spend a lot of time online, you start to wonder if strata is anything like a homeowner’s association, which is likely to throw up some red flags.
That’s why we’re here to explain what you need to know about strata before buying an apartment.
What is strata?
When you own a property, you’re generally responsible for everything on that property, inside and out. But when you’re in an apartment building, there’s the space that you own, and then the common areas. With a strata property, the building is technically managed by the building management (or strata body), which is likely a committee. The strata title is your ownership of a smaller part of that whole. This means that you’re responsible for your apartment, but the responsibility for the rest of the building, particularly the common areas, falls to building management.
But while the term ‘strata’ broadly always means the same thing, not all strata agreements and building management rules are the same, so it’s important to do your research. It’s important that you know what constitutes a common area and what the rules are in terms of maintenance etc. Generally the strata body is only responsible for common areas and the physical structure of the building, so the walls, roof, floor and foundations, and you’re responsible for most of what goes on inside the four walls you own.
What does being in a strata scheme involve?
As a strata title owner, you’re automatically part of the strata scheme, which is made up of the other owners in the building, as well as the strata committee. As an owner, you own not only your property but also a share in the shared common property (like hallways and any shared facilities). Because of this, you’ll be required to pay money to the strata committee on a regular basis, most likely quarterly, to cover things like maintenance for the building, as well as cover your rates.
Strata set the tone and the rules for the building that you live in. There may be extra restrictions above and beyond council rules for things like noise and where you can park. You will also need to consider activities that may impact other people in the building, such as moving bulky furniture in (especially if it will block common access areas like hallways and doorways).
These will generally be outlined in the by-laws, which will also cover things like whether or not you can own pets, how household rubbish should be managed (no garbage bags in the hallway, for example) and other bits and pieces. This might seem restrictive, but the idea is that if everyone abides by them, life will be easier for everyone. That’s why it’s important to read the by-laws carefully before purchasing to make sure that they’re something that you can live with (and when you’re inspecting the property, check whether or not other people are abiding by them as well!).
Are your neighbours owners or renters?
Something else to consider is how many people who own properties in the building live there, versus people are who renting them. This makes a difference because if there’s a problem, you want people who are suffering from the negative effects to be there in the meetings with you in your corner. Renters aren’t part of the strata scheme, only the owners are, so the mix of renters to owners will affect the amount of pressure put on the committee when things aren’t going right. Don’t forget that the strata committee are there to manage the building, but they may not live there, so you want to make sure that they’re doing it right before you agree to have them in your life. Make sure that repairs are up to date and that the financials pass the sniff test. Make sure that they have maintenance schedules that are actually being carried out as well. If you’ve rented, you know how frustrating it is when there’s a problem that you have to live with that your landlord won’t fix because it’s money they don’t want to spend. You definitely don’t want that with a property that you actually own!
Research before you renovate
Something else to consider about strata titles is knowing how much leeway you have for personalisation. Generally you’ll own the fittings in your apartment and all will be well, but if you want to change anything major, especially things that were included with the property like air conditioning, it may require consultation. The same goes for things like external doors (including balcony doors) and any outside areas — chances are that your managing body wants things to look a certain way, so they may not take kindly to your iron lace balcony when everyone else just has stock standard glass. Another point of consideration is flooring: you might think that your flat would look fab with floorboards, but your strata committee may have issues with the noise that they’ll make.
Also, while it may seem obvious that you need to check about what you can do (especially for structural work) and when (in terms of hours of renovation), there may be some finer points of consideration. For example, downlights can be problematic because improper installation can void your building’s fire safety certificate. So while many of the smaller things will be fine, bear in mind that you may not have absolute freedom with renovations.
While it might seem like a lot upfront, body corporates and strata titles are a great way to outsource the management of shared areas to another organisation so that your only contributions are financial. If that feels daunting, imagine needing to get the approval and backing of every single person in an apartment building to get something done, all by yourself? If you choose carefully, you can have a great, proactive strata committee on your side who will look out for your interests. Apartment living can mean easier entry to the property market with less maintenance, but you still have to be careful with where you’re buying. By understanding how your strata committee should be looking out for you, you can make the right decision far more easily.