A Strata Scheme is a building (or group of buildings) which has been divided into lots, such as apartments, townhouses or villas. When you buy into a strata scheme, you share ownership of the common property with the other owners, which can include walls and floors, stairways, lifts, roofs, driveways, outside areas and gardens.
What are your responsibilities when you buy into a Strata Scheme?
As an owner of a lot in a Strata Scheme, you automatically become part of the Owners Corporation, along with all other owners. The Owners Corporations manages the common property of the Strata Scheme.
Annually, the members of the Owners Corporation appoint a strata committee. This committee is made up of a secretary, treasurer and chairperson who manages the day to day running of the scheme on behalf of the Owners Corporation. The Owners Corporation can also engage the services of a strata manager who manages correspondence from residents, runs the annual general meeting, manages the process of issuing levy notices and dealing with levy payments, manages the finances and enforces the by-laws (rules).
Each owner in a Strata Scheme must abide by the by-laws. The by-laws are a set of rules adopted by the Owners Corporation to deal with the issues arising regarding day-to-day living in the Strata Scheme such as parking, alterations, pets, garbage disposal, etc. By-laws cannot be unreasonably harsh or conflict with relevant legislation. Before purchasing in a Strata Scheme, it is important to review the by-laws to ensure that they align with your needs and objectives. Some by-laws are very extensive and they prescribe the colour of window furnishings or even the type of furniture which can be used in the garden.
Each owner must pay Strata levies each quarter which are used to pay insurances, common property electricity and general repair and maintenance of the common property. The amount of the levy will depend on how much and what type of common property exists in the Strata Scheme. A Strata Scheme which has a lift, pool or gym will have a much higher levy than schemes which do not have these things. Each Strata Scheme also has a ‘capital works fund’, which also raises a levy against all owners every quarter which is saved for major building work (roofs, lifts, fencing, gutters etc.) and capital repairs. It is critical that an owner understands how much the levies will be, and how much they are likely to increase over time, before they decide to purchase a Strata property.
At WMD Law, we have a team of highly experienced property lawyers who can assist you through the process of buying into a strata scheme or handling strata disputes. Please do not hesitate to contact our office on 9525 8688 or email firstname.lastname@example.org.