If you’re in the process of hunting for a property, and have been looking into apartments or unit blocks, you may have heard the term strata scheme. But what exactly is a strata scheme, and how does it affect you as a potential owner?
If you are thinking of purchasing an apartment or unit, you may have been told about strata schemes. But what exactly is a strata scheme, and what do you need to know as a potential owner?
A system of multiple ownership of a building or collection of buildings is known as a strata scheme, where each owner owns a portion of the building (called a “unit”), and is usually an apartment, townhouse or commercial/retail unit. The common property of the unit has the ownership shared by every owner if indicated on the title.
These multiple ownerships are combined in a legal entity called the owners corporation, which can also be known or referred to as a body corporate, strata company or community association.
In Australia, a strata scheme is most commonly referred to as a body corporate. It can often be found in apartment buildings, caravan parks, retirement homes
The responsibilities of the body corporate owners include the management of the strata scheme. Annual General Meetings can be held where management decisions can be voted on, but the decisions and outcomes are usually made on behalf of the body corporate by an elected committee of members at the AGM.
Strata schemes also sometimes manage the day-to-day financial, maintenance and other administrative duties themselves. Again, this is usually laid out in the title when purchasing the property involved in the strata, which may also include certain rules, restrictions or regulations about the properties themselves that the owner must abide by. The owner will also be required to pay levies on the unit.
If there are any issues that arise throughout residency or ownership, the Body Corporate can address them during the process of the AGM.
If an individual is renting in a strata scheme (someone has bought into the strata and is renting that out themselves or through a real estate agent), any issues concerning the management of the block should be discussed with the real estate agent or the landlord (if renting directly) who will be able to contact the property’s management on your behalf.
Purchasing into a strata scheme could be an investment opportunity for those looking to invest in a property to rent out, but seeking professional advice is always recommended. Speak with us today to see if we can assist you in this.
For further information, investment advice or consultation before buying into a strata scheme, speaking with a professional is highly recommended.