Strata title is a method of facilitating individual ownership of part of a property – generally an apartment, unit or townhouse. Uniquely, strata title allows for individual ownership of an actual lot or unit whilst sharing ownership of the common grounds on which it is built. The concept only came into being 50 years ago, however there are now more than 270,000 strata title properties providing more than two million homes across Australia.
Investing in a strata title property can be a smart move – it is often an affordable way to enter the property market, and can be beneficial in managing repairs and renovations down the track. But whether you are buying a unit or a townhouse, you should look into the history of the property and its strata scheme before you sign the contract. Here is a few things you should know if you are looking at buying a strata title property.
What is a strata scheme?
A strata scheme is another name for a strata title development. Basically, it is a building or group of buildings divided into ‘lots’, which can either be individual units, apartments or townhouses. When you buy a lot, you own the individual lot as well as share the ownership of common property with people who own the other lots. Common property usually includes things such as gardens, roofs, external walls, staircases and driveways.
Strata living offers a friendly community-style environment, but it is different from when you live in a freestanding house. There may be some activities that are more restricted, like where to park your car or how to renovate your lot. It is very important that you are aware of your responsibilities and obligations.
Why invest in a strata title property?
Are strata titled properties better than houses? To help you decide whether you should buy a strata title property, here are the pros and cons:
The owner’s corporation
The owner’s corporation is one of the major differences between buying a house and a strata title property. The lot or unit owners in the strata scheme make up the owner’s corporation. However, the owner’s corporation also has an executive committee that makes certain decisions on its behalf, including the day-to-day management of the property. Large strata schemes can also appoint a professional strata management firm for the purpose of assisting and overseeing the functions of the owner’s corporation.
It is a good idea to have your solicitor look at any strata title contract before you sign on the dotted line, as they can be somewhat more complicated than purchasing a freestanding house. If you need a referral, or would like to get pre-approval on your financing before proceeding with your purchase, then give us a call. We will be happy to help.