What to know about strata

Strata buildings can have many benefits including shared costs and less responsibility for owners, but there are a few factors buyers need to consider before signing the contract.
Strata buildings can have many benefits including shared costs and less responsibility for owners, but there are a few factors buyers need to consider before signing the contract.

With the issue of housing affordability in Sydney and Melbourne, many people are being pushed into buying apartments or townhouses within a strata managed complex.

Strata buildings can have many benefits including shared costs and less responsibility for owners, but there are a few factors buyers need to consider before signing the contract.

Zaki Ameer, real estate expert and founder of Dream Design Property said buying into a strata building may be a more affordable way of getting into the property market. But there could be hidden costs.

“If you buy into a strata run building there will be strata fees and you will need to share your space with other people. It’s also important to see whether strata has adequately insured the building.

“The first thing you want to consider is a strata report. You also want to look for how much money is in the sinking fund, if they can cover the cost of issues in the building,” Mr Ameer said.

Malcolm Gunning, president of the Real Estate Institute of Australia agreed.

“A strata report will give you the summary of what's happening with the building and what plans have been approved. It will inform you if there are any special levies or restrictions on the building, such as pet restrictions or if you can’t lease it short term through Airbnb,” Mr Gunning said. 

The president of the REIA said to consider orientation, location, parking, community, security and to be aware of who owns what.

“Strata is responsible for the outside of the buildings – windows and balconies. From the inside you're responsible. 

“If there are any fire of safety upgrades required, check if that’s covered in the sinking fund. If there's old windows that need to be fixed, it might be a levy.”

He said there are many strata buildings people don't buy into because of the levies.

“You have your mortgage payments, strata levies and any internal upgrades - that's all got to be factored in. Buying is one thing, but being able to afford living there is another.”

A Sydney resident Nathan Lennon and his mate, recently bought an apartment in Coogee and urges other buyers to do their homework.

“When you're buying into a strata run building, remember, you're not just buying your apartment, you're buying the building around it. So get a reliable builder to inspect the building itself, as well as take a good look at the strata report and history of repairs, renovations etc.

“You might be buying a great apartment but you don't want any nasty (and expensive) surprises after you've just moved in. Do your homework,” Mr Lennon said.

This story Research before buying in strata first appeared on St George & Sutherland Shire Leader.