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Strata - why should you care?
We’re going to call it—strata is possibly one of the most widely misunderstood concepts in the real estate industry. Few seem to ‘get it’, and few seem to know just how important it is to be actively involved in the dealings of their Owners Corporation and/or Executive Committee.
Strata is not just a random fee you have to pay once per quarter! It’s actually really important that you understand why you’re paying that fee and what it entitles you to.
So What Exactly is Strata?
Strata is a type of title that allows for individual ownership of a piece of property (known as a lot) and shared ownership of the entire premises that encompass the lots. Typically, an apartment would be a lot, while the common property would include spaces like the car parks, shared courtyards and gardens.
Originally an Australian invention (go us!), strata title gives owners the ability to be part of an Owners Corporation (also known as a Body Corporate) have a say in how the common areas are maintained.
Who is Involved in the Strata Scheme?
Every person who buys a lot within a strata-titled building automatically becomes part of the Owners Corporation. The Owners Corporation can also elect members to form an Executive Committee who will represent all owners and look after the running of the strata scheme.
The Executive Committee can also (and usually does) select a Strata Manager to handle the legalities of running the building as well as budgets, reports, and secretarial responsibilities. It’s a great idea to have a Strata Manager involved, as most owners do not understand the laws and can find themselves in some serious hot water in certain situations—for example, if the building doesn’t have enough insurance, the owners might be forced to pay the difference from their own pockets. Not a good time.
Why Should You Care?
In a nutshell: you’re paying for it! And wouldn’t you prefer to have a say in exactly how your strata fees are distributed?
Think about it: the garage door that’s constantly broken—that’s something you could potentially have a hand in fixing, rather than having thousands spent on replacing the perfectly good shrubbery that lines the front perimeter. Or you could help overcome the long-running issue of the broken intercom that means you have to traipse downstairs every time there’s a visitor or delivery guy present.
There are a variety of other reasons why it’s beneficial to take an active role in the management of the overall property, too. We’ve listed a few below:
It’s Your Responsibility
As part of an Owners Corporation, you’re jointly responsible (along with the other owners) for maintaining the common areas. And it’s important that you see to repairs asap wherever they impact the use of the property for others.
You Can Have a Say in the Pet Policy
Whether or not you’re a fan of furry friends, it’s going to be pretty important to know your Owners Corporation’s thoughts on keeping them at the property. It’s also up to you and your fellow owners to create policies that are reasonable and fair to all with regard to pets and their behaviour.
It Builds a Sense of Community
We bet you’ve lived in complexes (or even some suburban streets) where you’ve never so much as sighted your neighbours. It’s a weird trend that seems to be particularly present in apartment buildings, where neighbours simply no longer talk to one another. So being an active part of your Owners Corporation could be one way to bring back the community spirit and work together towards common goals.
Two Heads Are Better Than One
Well, okay, it’s more than two heads—but you get the picture. Decisions made with as many owners as possible will have a much better chance of reflecting the needs of a greater sample of people. So really, your involvement in your Owners Corporation is about bettering the living environment for everyone who lives there, including both owners and tenants.
You Could Potentially Affect the Value of Your Property
By being an active member of your Owners Corporation and having influence over how funds are spent on the upkeep of common areas, you’ll also have a more direct influence over the value of your property over time, and may even feel more of a sense of pride towards it. Your property is probably the biggest investment you’ll make in your entire life, so it’s a great idea to be aware of what decisions are being made about it.
We hope this article has helped you to see the value in participating actively in the dealings of your Owners Corporation. We think involvement is always better than apathy, especially when it comes to one of the biggest investments you’ll ever make.
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