Buying a Strata Title Property: What You Need to Know

When purchasing a strata title property for investment or living, there are several considerations that buyers need to be aware of. 

While strata title properties can offer the same real estate value as an individual house, there are some key differences that set them apart due to their connections to a strata scheme. Whether you’re a first-time buyer or a seasoned investor of strata-titled properties, you need to be aware of these differences to prevent unaccounted costs and issues from occurring during the purchasing process. 

Buying a strata property is both an exciting and rewarding prospect! There are so many benefits to being part of a strata community. To help you get familiar with the nature and conditions of strata schemes, we’ve put together this guide for some of the things you need to know when it comes to buying a strata property.

The ‘legal stuff’ – Just remember that Strata Data is not a financial or legal advisor.  You should seek independent legal, financial, taxation or other advice to check how this relates to your unique circumstances.  Strata Data is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly from this article.

Table of Contents

• What is a Strata Title Property?
• How Strata Title Property Ownership Works
• What to Look for When Buying a Strata Unit 

What is a Strata Title Property?

Strata title property refers to the individual portion or unit within a larger property known as a strata scheme. Examples of strata schemes include multi-unit apartments or townhouses. 

Much like owning a single room in a house with many rooms, a strata title allows individuals to have ownership of a lot or unit while sharing in the ownership of the common grounds of the larger property.

Strata title properties are extremely popular in Australia as they are a much more affordable way to enter the property market or own a home compared to buying an entire house. Not only can they be good value for money, but they also often provide many other benefits such as shared facilities, and proximity to commercial, retail, education and transport hubs.

How Strata Title Property Ownership Works

When you buy a strata title property, the entire space within the boundaries of your lot belongs to you. You are responsible for this space and are allowed to use it as you like, whether it’s for general living or as an office.  

The spaces outside your lot such as pathways, staircases, or open outdoor areas are known as common property. More specifically, common property refers to all the areas of the land and buildings of the entire strata that aren’t included in any lot. 

As an owner in a strata scheme, you will automatically become a member of the Body Corporate, which is collectively responsible for the upkeep of common property. All owners in a strata scheme will be required to contribute towards the cost of running the building by paying strata levies—this is in addition to any rates/fees that you will already be paying for your lot. 

Because the ownership of common property is shared among all owners there are certain rules (known as articles or by-laws) within strata schemes that are in place to govern their use and general shared living. Some common bylaws include the need to seek permission before performing renovations to your unit, allocated parking spots, and noise level restrictions.

What to Look for When Buying a Strata Unit

Before deciding on whether to purchase a strata title property, you should take note of the following considerations. As a general rule, it is a good idea to look into the history of the property and the conditions of the strata scheme before you sign anything.

Here are the key areas of the strata title property contract that you should check before signing on the dotted line:

• Lot Inclusions

Upon inspecting a strata unit, a list of inclusions will typically be provided. This list will detail the items that come included with the ownership of the lot. This could include furnishings such as cupboards or bed frames, appliances such as kitchen stoves or refrigerators, or fittings such as floor coverings. 

It’s important to check that this list is accurate to what you will find in the lot to make sure that there is no confusion in the ownership of the strata unit. Once you have taken ownership of the lot, you can choose to replace or modify these items to your liking. However, as mentioned before, depending on the by-laws of the strata, major changes that require renovation will require permission from the Body Corporate or Committee.

• Ownership Entitlements

Check that the contract states the correct entitlements for your ownership of the strata title property. This includes the lot boundaries and common property spaces. Your ownership of the lot will come with a unit entitlement, which reflects your share of the overall strata costs.  Along with this comes your ability to vote on issues relating to the strata’s maintenance and by-laws, so long as all your strata fees are paid.

• By-laws

Speaking of bylaws, the specific list of by-laws of the strata building should be provided to you as part of the section searches prior to signing of the contract. These by-laws are not set in stone and can be changed by a special resolution vote of the Body Corporate (which you will be a part of). 

However, strata by-laws are designed to facilitate safety and security for all owners within the building and changes in breach of that will typically not be allowed. In the event that a  dispute arises between owners due to the shared living spaces, there may be defined processes for dispute resolution. 

• Building Repairs

Looking into the history of the strata building to find out what repairs and how often repairs are made can reveal if the strata title property is worth buying. A good way to do that is review the most recent minutes and financials.  When you are an owner you will be expected to contribute to the maintenance costs of the building—no matter how long you’ve had ownership.

Is Buying a Strata Property Worth It?

Absolutely! As one of the most financially approachable pathways towards owning a place of your own or for property investment, buying a strata title property that ticks all of the boxes above is worth it. As with all property purchases, being comfortable and aware of the considerations and responsibilities of ownership will help you to easily navigate any challenges that come your way. 

To that end, most body corporates find that having a strata management company to help with the burden of collective ownership is the best solution. As the best strata management service in South Australia for over 40 years, Strata Data can help you and your future Body Corporate navigate the various strata responsibilities with ease.