- Posted 14 Nov
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If you’re a first time home buyer thinking about buying an apartment or townhouse, you may have never heard of “Strata”.
You’ve finished the process of getting your home loan and made your apartment purchase.
Now, you’ll need to get comfy with Strata Schemes, as they make up the type of community-oriented lifestyle you’ll be involved in.
What is Strata Living?
Strata living can, at first glance, seem very complicated, but it’s an integral part of home buying when the type of home you’re buying is an apartment or townhouse. Before you get too overwhelmed by issues with committees, meetings, levies and by-laws, let’s review some of the basics.
- Strata schemes are a way of handling the legal ownership of a portion of a building or structure. A strata “title” in a home loan refers to the individual ownership of a piece of a property, or “lot”, which is usually a privately owned apartment or apartment complex.
- Strata buildings can be residential or commercial. Residential forms would be Units, High or Low rises, Duplexes, Townhouses or Villas. Commercial properties can be offices, retail shops, factories, warehouses or storage units.
- In home buying, when you buy into a strata scheme, you buy into the owner’s corporation. This is a legal entity formed by the owners in the building or complex (sometimes this is referred to as the “body corporate”).
What are your Obligations?
Once you’ve bought your dream home or apartment, you will have obligations to the strata scheme and community. You will have to become familiar with the bylaws of the strata scheme. These are designed to help with the harmony of communal living.
Bylaws cover such things as garbage disposal, pets, noise restrictions, washing, and renovations. These bylaws are enforceable, and penalties can apply if you don’t adhere to them.
As a home buyer in a Strata Scheme, you’ll also need to know about Strata Levies.
These are regular fees that are for upkeep of the building you’ve bought into. Your levy corresponds to your lot size, the age and size of your property and its facilities.
There are 3 types of levies: Sinking fund, Administrative, and Special levies.
What else is involved?
Your strata lifestyle will also include meetings and committes. In these forums, decisions are going to be made about how the strata scheme is run. This is where projects will get off the ground to help improve the building as well as the general running of the strata scheme.
As you can see, strata schemes are an important piece of the puzzle of home buying, home loans and home ownership.
For the first time home buyer, it’s an especially important thing to become educated about. You’re going to be living in a community, which can be a wonderful experience, if you participate in the way you are expected to. The more knowledge you have, the better you’ll be to contribute to the strata lifestyle.
If you need help with home finance or home buying, get in touch with us today!