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4 min read

Understanding Owners Corporations: What Buyers Need to Know

Understanding Owners Corporations: What Buyers Need to Know

If you're considering buying a strata property, such as an apartment or townhouse, you're entering a unique realm of homeownership that comes with its own set of rules and regulations. While this may seem daunting at first, we're here to guide you through the intricacies of owners corporations, providing you with a comprehensive understanding that will help you make informed decisions and ensure a smooth homeownership experience.

 

What is an Owners Corporation?

To begin, let's clarify what an owners corporation is. It's essentially a management entity that oversees common property in a residential or mixed-use building. Common property typically includes areas like corridors, pathways, communal gardens, elevators and swimming pools. 

 
Rights and Responsibilities as a Lot Owner

As an owner, you have specific rights and responsibilities. When you buy a lot within a complex you own everything within the four walls of that lot, including elements like the walls, floors and appliances, but you also become a member of the owners corporation and therefore have a say on how the building’s common areas are managed and looked after.

 

Understanding the Bylaws

Every owners corporation operates under a set of bylaws designed to ensure harmonious communal living and protect and maintain the property. These bylaws dictate various aspects of your living experience, including rules regarding rubbish disposal, noise restrictions and parking allocations. It's crucial to familiarise yourself with these bylaws, as they may also impact your ability to make alterations to your property, own pets or use amenities like BBQ areas, playgrounds and pools.

While bylaws are meant to promote a positive living environment, they can't be excessively restrictive or in conflict with the law. Breaching these bylaws can result in penalties or fines, so it's essential to adhere to them. You can obtain a copy of these bylaws from the selling agent and they should be included in the contract of sale.

 

Owners Corporation Fees: What You Need to Know

One of the key distinctions of owning a strata property is the need to pay strata fees to the owners corporation. These fees are typically paid quarterly and cover the management and upkeep of the building and common areas. The amount you pay can vary depending on factors such as the property's location, size, age and amenities it offers.

For instance, buildings with extensive amenities like a gym and heated swimming pool often come with higher strata fees. It's advisable to factor in these costs before making your purchase and seek professional advice to ensure the fees are reasonable considering the property's age and condition.

 

Managing Strata Fees

Strata fees are allocated to two distinct funds managed by the owner's corporation. The administrative fund covers day-to-day expenses such as garden maintenance, insurance and strata management fees. The sinking fund is reserved for major capital expenses like roof replacements or elevator repairs. In cases where there are insufficient funds to cover significant expenses, special levies may be imposed to make up the difference.

 

The Importance of a Strata Report

Before finalising your strata property purchase, it's essential to obtain a strata search report. This report provides valuable insights into the building's management, finances, insurance, potential defects or planned maintenance, and any ongoing legal matters. You can enlist the services of a professional strata searcher or conveyancer to obtain this report or choose to inspect the strata records yourself. Keep in mind that you'll need the seller's permission and may be required to pay a fee to the owners corporation for this information.

Buying a strata property doesn't need to be an intimidating process. With a comprehensive understanding of how owners corporations operate and your rights and responsibilities as a lot owner, you can make well-informed decisions and enjoy a smooth homeownership experience. By adhering to bylaws, managing strata fees and obtaining a strata report, you can ensure that your strata property becomes a rewarding and enjoyable investment.

 
Managing Strata Fees

Strata fees are allocated to two distinct funds managed by the owner's corporation. The administrative fund covers day-to-day expenses such as garden maintenance, insurance and strata management fees. The sinking fund is reserved for major capital expenses like roof replacements or elevator repairs. In cases where there are insufficient funds to cover significant expenses, special levies may be imposed to make up the difference.

 

 

The Importance of a Strata Report

Before finalising your strata property purchase, it's essential to obtain a strata search report. This report provides valuable insights into the building's management, finances, insurance, potential defects or planned maintenance, and any ongoing legal matters. You can enlist the services of a professional strata searcher or conveyancer to obtain this report or choose to inspect the strata records yourself. Keep in mind that you'll need the seller's permission and may be required to pay a fee to the owner's corporation for this information.

Buying a strata property doesn't need to be an intimidating process. With a comprehensive understanding of how body corporations operate and your rights and responsibilities as a lot owner, you can make well-informed decisions and enjoy a smooth homeownership experience. By adhering to bylaws, managing strata fees and obtaining a strata report, you can ensure that your strata property becomes a rewarding and enjoyable investment.

 

 

 

*Please refer to the Federal and State Government websites for further information. Terms and Conditions apply to any other promotions that may be contained within this communication. Please enquire within and check with the vendor and agent for further terms and conditions. Only one promotion can be used per purchase and can not be used in conjunction with any other promotions. The information contained herein is given for general information purposes only and it is subject to change. Readers, viewers and consumers are advised to perform their own research and investigations and obtain their own financial, legal and other advice. The information and materials do not form any representation by any vendors or agents of any vendors and may include third-party opinions that do not represent the opinion of any vendor or agent. They do not form part of any contract of sale and they do not constitute legal, financial, real estate or other advice and must not be regarded or relied upon as such. No warranty is given either expressly or implied and the vendors or agents do not assume liability for negligence or otherwise with respect to the contents herein. Any plans are yet to have had their structural and services review so are subject to change prior to completion of construction. All plans, dimensions, areas and particulars herein whether by measurements or visual representation are approximate only, for general information only, and do not constitute any representation by the vendor or its agents or representatives. They do not form part of any contract of sale. Changes will undoubtedly be made during development and dimensions, fittings, finishes and specifications are therefore subject to change. Any furniture, goods and chattels depicted in this document are not included with any sale. Prospective purchasers or lessees are advised to not to rely on the information contained herein and to satisfy themselves as to the accuracy of all information given by making their own inspections, searches, inquiries and advises or as is otherwise necessary. The vendor or its agents or representatives will not be responsible for any error or misdescription which may appear. Further, the vendor or the developer or their agents or representatives do not represent, warrant and/or guarantee that the integrity of this communication has been maintained or that the communication is free of errors, virus, interception or interference. Usage of this or any other websites and materials and any associated website or material is subject to further terms and conditions.

 

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