6 Things You Need To Know If You Plan To Buy a Strata Apartment
Living in a strata apartment might seem a bit complicated to navigate, but it doesn’t necessarily have to be. These 6 things are all you need to know about a strata plan and how it works before you decide whether you want to buy a strata property or not.
What exactly is a strata plan? It’s a specific way of purchasing an apartment or a townhouse that also allows you to become a part-owner of the common property. The common property often consists of building exteriors, lobbies, driveways, gardens, staircases, pools, grounds, gym equipment, and other facilities. These are all the things that you’re sharing with the other owners in the complex.
A strata plan refers to a set of rules that the owners need to follow. These rules are all regarding the responsibility of the owners towards the common property and its maintenance. The common property maintenance is taken care of through an Owners Corporation or a Body Corporate.
The rules of living in a strata apartment
Life in a strata apartment comes with a certain number of rules that need to be followed so that the whole community can live in peace and harmony. These rules, also commonly referred to as a set of Bylaws or House Rules, can be unique and specific to each and every strata plan. They often cover things such as pets, noise restrictions, renovations, and garbage disposals.
An Owners Corporation
The Owners Corporation consists of all the registered owners of individual properties that fall under the strata plan. They also commonly refer to it as the Body Corporate. This corporation in particular has a job to administer and maintain the common property that you share with other owners. Their goal is also to ensure that everyone follows the rules of the common property so that harmony and mutual respect is established among the owners.
Every year, the Body Corporate is responsible for appointing an Executive Committee to check the day-to-day administrative needs of the common property. The Committee is allowed to contact the strata management and use its services. Some of the best and most reliable North Shore strata management companies can provide the most efficient support and finances that are needed for maintaining the common property.
What are your annual expenses?
If you choose to live in a strata apartment, there are certain annual expenses you’ll be asked to respect and keep up with. Every year you are asked to cover the costs of running the Owners Corporation for the upcoming year. This cost covers the maintenance of the property and the budget is approved at the Annual General Meeting. Each owner gets their levy payment calculated according to the size of the property they own.
There are three types of levy payments:
Administrative fund levies
Administrative levies pretty much cover the everyday running of the building. They take care of things such as cleaning, gardening, insurance, and so on.
Sinking fund levies
These cover any major repairs, projects, and building works that may be occurring on your property. They also cover unexpected emergency costs.
Special levies are only issued if major work is required and there are not enough funds in the administrative and sinking funds.
How does insurance work?
The insurance is always arranged and taken care of by the Executive Committee on behalf of the Body Corporate. You get the insurance that covers the building and you also get public liability insurance for the shared property. In addition to that, you need to get your own insurance that will cover your property and its content.
What if you are planning on renting out your property?
Lastly, if you want to rent out your property, you have a responsibility to make sure that your tenants are following the Bylaws of the building. You also need to reach out to the Body Corporate and attend their meetings regularly, or simply vote by proxy in case you can’t come in person.
All things considered, living in a strata apartment isn’t as complicated as it seems. It can be a very lovely and harmonious community of people living in the same area and happily sharing part of the property. Who knows? You may even end up creating beautiful new friendships this way.
Jasmine Anderson is a lifestyle and beauty blogger based in Australia. She is an incurable daydreamer, who finds inspiration in little, everyday moments. Spending time at her cozy home office with her two cats, writing her blog, is her favorite thing in the world. Twitter @AndersonJess_AJ