What is a Strata Title? How It Affects Property Ownership in NSW
When purchasing property in NSW, especially apartments or townhouses, you'll likely encounter the term 'strata title'. Understanding what a strata title entails and how it affects property ownership is crucial for making informed decisions. As a real estate agent, we guide clients through this process, ensuring they know what they're signing up for when purchasing a property under a strata title.
Introduction to Strata Title
A strata title is a form of property ownership often used for apartments, units and townhouses. It allows individual ownership of a part of a property, referred to as a "lot" (such as an apartment or townhouse) while sharing ownership of common areas like gardens, pools or driveways with other lot owners. In NSW, the Strata Schemes Management Act 2015 governs the rights and responsibilities of all parties involved.
Individual Ownership vs. Common Property
One of the most significant aspects of strata title ownership is the distinction between individual ownership and common property. As a lot owner, you have exclusive ownership of your unit, meaning you're responsible for its maintenance and any decisions regarding renovations or improvements. However, the common property, which includes areas like the building's exterior, roof, stairwells and shared facilities, is collectively owned by all lot owners. The owners' corporation manages the upkeep of these areas, and all lot owners contribute to the maintenance costs through strata levies.
The Role of the Owners' Corporation
The owners' corporation, also known as the body corporate, plays a critical role in the management of a strata scheme. It is responsible for maintaining and repairing common property, enforcing by-laws and managing finances, including collecting strata levies from lot owners. The owners' corporation is typically made up of all the lot owners and holds regular meetings to discuss and vote on important matters. As a property owner, being part of this corporation means you have a say in the management of the property, but it also means you're subject to the decisions made by the group.
Strata Levies: What You Need to Know
Strata levies are regular payments made by lot owners to cover the costs associated with the maintenance and management of common property. These levies contribute to the administrative fund, which covers day-to-day expenses, and the sinking fund, which covers long-term repairs and capital works. Potential buyers need to be aware of the amount of these levies, as they can significantly impact the overall cost of ownership. As a real estate agent, advising clients to review the strata financials before purchasing is critical in helping them avoid unexpected expenses.
By-Laws and Restrictions
Living in a strata-titled property means adhering to a set of by-laws - rules designed to maintain harmony within the community. These by-laws can cover a wide range of issues, from pet ownership to noise restrictions and the use of common areas. Understanding these by-laws is crucial, as they can affect your lifestyle and property use. For example, if a client has a pet*, they must ensure the strata by-laws permit pets before purchasing.
* In many parts of Australia, particularly New South Wales, laws related to pets in strata complexes have evolved. The general principle now is that strata by-laws cannot unreasonably prohibit the keeping of pets. Click here to read more about strata when it comes to pet ownership in NSW.
Strata title ownership in NSW offers a unique blend of individual and shared property rights, making it a popular choice for those looking to buy apartments or townhouses. However, it's essential to understand the implications of owning a property under a strata scheme, from the financial obligations of strata levies to the responsibilities of being part of an owners' corporation. As a real estate agent, we provide clear and accurate information, helping clients navigate the complexities of strata title ownership.
You can read more about Strata & Community Living on the NSW Fair Trading website - here.