If you have never lived in an apartment, strata can be quite a foreign scenario to buyers. Access to the bbq area, swimming pool and gym and no garden maintenance - It is not surprising that apartments are often the choice for young couples or first home buyers. This is a quick run down of what you need to know.
What is Strata?
A Strata scheme is a building that has been divided into individual 'lots' and ‘common property’. When you buy an apartment within a building, you are buying a ‘lot’ and you also share the ownership of common property with other lot owners. Common property generally includes things like gardens, driveways, lifts, gym etc.
Strata Levies
Levies are paid quarterly towards the strata fund to maintain the common property and the general upkeep of the building. If the strata fund is low or further funds are required for a project or major repair, often a ‘special levy’ is introduced and this is payable by lot owners in addition to the regular levies.
By Laws
By Laws are a set of rules that all occupiers and visitors must abide by and are absolutely necessary to maintain harmony within the building. By Laws often deals with noise, pets, security and safety.
Must dos before buying Strata
1. Obtain a Strata Report.
A Strata Report can cost between $220.00 to $550.00 depending on the size of the Strata Scheme. Obtaining a Strata Report is one of the most crucial stages as you will gain access to the Strata records which can often reveal the following:
- The condition of the building and ongoing repairs. People are now more aware of building defects in apartments since the Opal Tower incident in 2018. Serious structural defects may render an apartment worthless.
- The financial position of the strata scheme. Low strata funds or costly repairs may require special levies to be introduced. As a new owner, you may be facing costly special levies that are often not budgeted for so soon after buying.
2. Obtain advice on the Contract.
A seller is legally required to disclose certain matters in the Contract. If you fail to pick up on the disclosure and proceed with the purchase, you are deemed to have accepted the fault and have no recourse against the seller. Furthermore, a seller who is seeking to avoid paying costly special levies may also pass this financial burden on their buyer.
A Conveyancer with a keen eye for attention to detail by your side is a must have.