Are you considering buying into a strata community? This communal way of life is extremely popular, but you need to know what sort of protections you have when buying in. Let’s take a look at the ways you can protect yourself if things don’t quite go to plan.
Naturally, any purchase comes with a Contract of Sale, and it outlines the terms of sale and purchase, this is no different in strata. So, when considering any purchase, it’s crucial that you get some legal advice first. Your representative should be looking over any contracts before you sign them, pointing out any areas of concern.
A section 184 certificate is likely to be requested. This certificate outlines key information about the Owners Corporation as well as any outstanding levies for the lot (unit) you are intending to purchase so that adjustments can be made at settlement. Your solicitor/conveyancer may also arrange a strata search on your behalf, which is essentially an inspection of the books and records of the Owners Corporation.
If you are purchasing off-the-plan, the NSW Government has introduced a raft of measures to offer homeowners better protection against purchasing defective residential apartment buildings, such as the Residential Apartment Buildings Act 2020 and Design and Building Practitioners Act 2020.
The Strata Building Bond and Inspection Scheme (SBBIS) was also introduced from 1 January 2018, which requires developers of strata developments that are four storeys or higher to lodge a building bond, equivalent to 2% of the contract price for building works at the time just before the occupation certificate is issued. The 8-stage SBBIS process mandates that an independent building defects inspector be appointed to identify any building defects. The bond is retained until issues are rectified or resolved, giving new apartment buyers further protection.
Every registered strata scheme has a set of by-laws that lot owners must comply with. These by-laws govern the behaviour of residents, such as how they use common spaces, noise limits and much more. They also cover the types of renovations you can do and all of your other responsibilities for living within the strata community.
So, if you buy into a strata scheme, you should definitely read the by-laws thoroughly beforehand. Not only will you be able to see if the restrictions are suited to your lifestyle, but also whether the standards match your own. For example, if you can’t stand animals but pets are allowed in the building, perhaps it isn’t for you.
Owners can propose new by-laws too, but any new by-laws will require a special resolution at a General Meeting which means no more than 25 per cent of votes cast against it.
This doesn’t have anything to do directly with the purchase of a property, but it’s very important once you’re in a strata community. When you buy an apartment in a strata building, you become a member of the Owners Corporation. As such, you have voting rights on all important matters put forward at a General Meeting.
For certain matters, weighted voting may apply. For example, if a lot owner owns three apartments, their vote would be worth this amount since they also contribute financially for three apartments. In addition, lot owners with larger properties may have a great unit entitlement, meaning they pay higher strata fees and, as such, receive a weighted vote. For other proposals, it may simply be a 1-for-1 voting system where each member’s vote is weighted the same.
So, if you don’t like something, vote to change it. You’ll also be eligible to nominate for committee election, so if you really want a make a difference, that’s a great way to do it.
Looking to make a strata management change?
If you’re struggling to keep up with the demands of daily strata operations, it’s time to take a step back. More Than Strata offers a comprehensive strata management service designed to ease the burden for Owners Corporations and strata committees. We work closely with owners to determine your needs and the type of assistance we provide. It’s a completely tailored service guided by your needs. If you’d like to find out more about running your strata scheme more effectively and easily, contact the friendly team at More Than Strata today.