What You Need To Know About Strata Living

Between by-laws, body corporate, committee meetings and levies, buying a property in a strata scheme building can seem a bit daunting.

However, ultimately strata schemes exist to protect the rights of owners and ensure the correct management of the property, as well as ensure harmonious living for all residents. Here’s what you need to know.

What is a strata scheme exactly?

Strata schemes are a system that has existed in Australia since 1961 as a means of governing the joint legal ownership of a building or structure. Strata scheme buildings can include units, townhouses, duplexes and villas, as well as certain types of commercial properties.

How does it work?

As a strata apartment owner, you automatically become a member of the Owner’s Corporation, also known as the Body Corporate. This is a legal entity comprising of all the owners in the building. When you buy into a strata scheme building you own not only your own unit (or “lot”), you also share joint ownership of the building’s common areas. These typically include gardens, walkways, rooftop areas, underground parking lots, stairwells and lobbies.

What are my obligations as an owner?

As a lot owner, you are responsible for paying all of your rates (such as council and water rates), as well as your strata fees and levies. You must notify the Owner’s Corporation of any changes in ownership or occupancy and comply with the building’s strata scheme by-laws. A building’s bylaws exist to effectively manage the building and its upkeep, as well as protect the safety, security and happiness of all its residents. It’s a good idea to familiarise yourself with both the standard bylaws of the state you live in, as well as any special by-laws determined by the Owners Corporation for your building. These can range from whether pets are allowed in the building to permissible property upgrades, noise restrictions, and even whether it’s ok to hang laundry on your balcony.

Getting involved

All strata schemes in New South Wales have a strata committee that is elected at the building’s Annual General Meeting (AGM) and this committee manages day-to-day issues for the scheme. Getting onto this committee is a great way to get more involved in decisions being made for and about your building, but all owners are also free to attend the committee’s regularly held meetings. At the least, you should attend the building’s Annual General Meeting (AGM), where you’ll find out about all major decisions and annual budgets and be able to have your say on key issues. As an owner, you should receive minutes of all meetings too.

How are strata fees and levies determined?

Your strata fees, which are typically paid quarterly, contribute to the maintenance and upkeep of the common property. They’re divided by lot owners in the building and determined by the size of your property (e.g. you will pay more if you own a two-bedroom penthouse than a studio owner in the same building). The three main types of levies are administrative (day-to-day operation and maintenance), capital works fund (money reserved for larger repairs and renovations), and special levies (raised on an as-needed basis for major works and repairs if there aren’t enough funds in the other accounts).

How do I find out more about my building’s strata rules and bylaws?

Strata rules and bylaws vary both by state and by building, according to what the owners have agreed. You can look up more about laws in your state here and also contact the strata management company for your building.

Contact me today if you have any questions about buying in a strata scheme building.