What exactly is strata?
There’s often a rush of information and expenses that come with buying an apartment or unit. There’s paperwork, mortgage repayments, rent, bills, and strata. But what exactly is strata?
A strata scheme is a building or collection of buildings where individuals each own their own portion of the scheme – for example, a unit or townhome – called a ‘lot’. It also entitles you to share ownership of common property, like a garden, pool or foyer. Strata living can provide a community-style environment but requires you to respect your neighbours and understand your responsibilities.
What do you actually own in a strata scheme?
The major difference between owning your own free-standing home and a lot in a strata scheme is that the structure of your property, i.e. the external walls, floor, fixtures and roof, technically belong to the building owner. On the upside, maintenance and repair of these parts of the building are the responsibility of the owners corporation, but also means you are required to seek permission to alter or renovate any of those parts, or install services such as internet, cable or a phone line.
How does strata impact you?
As a strata owner, you are required to pay a levy to cover expenses such as council charges, maintenance, utilities and insurance. Strata insurance is compulsory, because as you are technically an owner, you will share liability if anything goes wrong in a shared space.
A strata scheme should not affect your property, though will need to comply with any by-laws that cover things like renovations, noise and pets. These are usually set by the building owner or developer. However, anything outside of your property is shared with other occupants and their landlords.
What affects strata rates?
Strata rates are usually determined annually by the building owners, based on costs for the previous year. Your strata fees are likely to be higher if the complex has amenities that need to be maintained, like lifts, a gym or pool. How old the building is and how well it has been maintained will also affect your rates.
What else do you need to know?
Before you purchase, you’ll want to get a copy of a strata report. This helps you understand what you are buying into, if there have been any disputes between owners, and show how well the building has been, or will be, maintained.
You are likely to pay levies as well. These are contributions to the owners corporation that ensure the corporation has sufficient funds to meet its financial commitments. The amount you pay, and the frequency you will need to, will be decided at an annual meeting.READ MORE
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