Hey all, I've just got pre approval from the bank for a house loan and a lot of what is on offer (in my price range) is under strata title.

I've heard differing reports from various friend etc about the good and bad of strata, most of it bad. Was talking about it with a close friend this arvo though, and he pointed out some very good points about it (joint insurance, maintenance taken care of etc.

Has anyone on here lived under strata? If so,have you had good/bad experiences?

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Subsonic said..
Hey all, I've just got pre approval from the bank for a house loan and a lot of what is on offer (in my price range) is under strata title.

I've heard differing reports from various friend etc about the good and bad of strata, most of it bad. Was talking about it with a close friend this arvo though, and he pointed out some very good points about it (joint insurance, maintenance taken care of etc.

Has anyone on here lived under strata? If so,have you had good/bad experiences?

A few years ago my parents owned in a strata, ok for doing whatever you wanted inside the unit, but any works like garden changes, painting etc. to the outside had to be approved by the strata committee.
[not always easy or simple - like any dealings with committees]

Make sure you know about any strata related maintenance and insurance fees as they can vary a heap.

stephen

I think that REIWA has a strata info website. Beware of getting info from different states, as the rules are (or at least used to be) a bit different. Generally the more units in the strata title the more complicated it can become and will come down to the competence of he strata manager (which is usually a real estate agent). an external strata manager would be preferable than one of the unit holders doing the role. So, in summary, if it is one of many units, check the previous minutes of the strata meetings to see if there are any issues with the development and how much is in the maintenance account..

Everyone I know that has bought into that type of property has ended up on the committee in as high a position as was available. Gotta look after your investment but worth weighing up first how involved you're prepared to be and therefore how suitable it is to your personality and means.

Strata titles are now covered by a list of regulations so on the whole, they're not too bad, but you don't have the freedom to chop and change anything outside of the unit, or anything of a structural nature. No painting outside, no new aircons, no new anything on the outside without approval from the body corporate.

With strata ownership, all outside maintenance is determined by the body corporate, usually by way of a building committee.
If they decide the building needs painting or rendering or some expensive thing done to it,.. new windows or whatever, the cost will be levied against the owners, and this might be at a time when you don't have the spare cash.
There is an annual charge made each year, sometimes paid quarterly, or every six months, and it usually includes a 'sinking fund' which is money set aside for maintenance as it is needed, but often, if big jobs have to be done, there will an extra levy to cover it.

I've been involved with a few over the years, some good, some not so good. It all depends on how the body corporate is run and who's running it.
Sometimes the building committee might see things as necessary when you don't.
Sometimes the building committee are slack and the building gets run down.

To get some idea of what the situation is, look over the building properly to make sure it's been maintained in reasonable order, but not gold plated.
If it is gold plated, then check what the annual BC fees are. Maybe they know where to get gold plate cheap.
When they tell you the fees, make sure you are clear on whether the figure is monthly, quarterly, annually etc.
A lot of them now quote the fees as monthly, which makes it sound cheap,.. but $1200 a month adds up to $14,400 a year, and that's not cheap.
Around $4000 a year is more usual.
If possible, talk to other owners to see if they are happy with the way it's run.
You can get yourself voted onto the building committee if you want to have some say in how it's run.
Most committees find it hard to get people onto it because it's a job which gets little thanks from anyone,.. a bit like local councils.

If it's a small development, say a duplex or triplex, I don't think you need a body corporate, even though it's on a strata title.

There's some really big changes for strata titles in a discussion paper from the state government going on now.
Would pay to research thoroughly
W

You should ask a lot of the people living in the development how they feel about the rules. Sometimes with these situations the rules are reasonable and the people easy to work with and it ends up keeping the place looking nice and keeps out the riff raff but other times the people on the boards are Nazi's who make everyone's life miserable.

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Beaglebuddy said..
You should ask a lot of the people living in the development how they feel about the rules. Sometimes with these situations the rules are reasonable and the people easy to work with and it ends up keeping the place looking nice and keeps out the riff raff but other times the people on the boards are Nazi's who make everyone's life miserable.

Yep, I'm in a strata, the Council of Owners are in it for themselves and they aren't intelligent people . In the Council of Owners defense they don't spend money crazily like some strata's and occasionally make some rational choices.

We pay about $1600 a year strata which is great.

If the strata looks neat, and the strata fees are low you should be OK.

Hey mate, if your interested in living in dawesville pm me for info on the strata development we have lived in for six years. The blocks that are left are good value and project builders offer house and land packages, it has an indoor pool, gym and an outside resort style pool.

I live in a strata unit I'm paying off and don't like it. Its small, only four units in the block which is generally good but means fees have to be higher to cover fixed costs. I currently pay about $3K a year in fees. What I don't like is what happened last year. We live on the downstairs unit. We noticed water dripping from the ceiling of the kitchen on the weekend. I notified the strata manager and in the end it took them a month to get it fixed. The strata insurers employed tradesmen who didn't give a sh!t and came from the other side of Sydney. In that time our unit suffered a lot of water damage in the kitchen and a bedroom. Mould grew. There were water marks down the walls and on the ceilings. This was in the middle of winter too.

The strata manager was sympathetic but basically didn't really care all that much and did nothing to hurry the repairs along. I felt like placing a water hose in the ceiling of his house, turning on the tap and then seeing how he felt about it.

So in the end its the lack of control that gets me. However on the other hand I'll stick it out as houses are so expensive, well over a million dollars plus the whole suburb CBD is going to be redeveloped with 25 story apartment blocks to be built and our place about 100 meters away. So I guess land prices will rise and we own a quarter of a fairly big block of land.

Lots of different opinions provided here, there is no correct answer without knowing the type of property you are looking at, in general the following should apply:

1..The sale documents should detail any specific strata title or body corporate rules that apply to the property in question. This should also include the current fee structure, voting rights and what is covered.

2..Body corporate rules provided should also detail what limitations are placed on you regarding the external appearance of the property. These are usually more strict where the property is semi detached of multi level which makes a lot of sense.

3..Annual maintenance fees do not usually cover All repairs but more typically cover items such as common area lawn mowing, gardens maintenance, light globes etc. If a bigger maintenance item is required such as a new roof this would be covered by a special levy, depending on the rules this may be split by voting rights or proportioned to the Benefit of the repair.

4..Insurance costs usually only covers building, common property and public liability. Seperate contents insurance is required by each owner. In some cases buildings can be taken separately if the buildings are free standing of titles are not over each other.

We live in the original house that is on a strata title with 4 town house, we share a common drive. We self manage and the only costs are the annual buildings insurance and driveway lighting bill. We are responsible and pay for our maintenance and are allowed to paint, change, etc what we want. We have no annual fees, insurance and lights costs about $800 each a year.

the bottom line is look at the particular body corporate rules for the property in question.

There is a lot of controversy going on at present about fairness and equity with charging of body corporate fees.

As an example, in a multi story complex why should the ground floor owners who don't use the lifts and don't get the views have to pay the same as owners on upper floors??

Body corporate management in Queensland is a shambles and why I avoid them.

In Vic each property on the strata title is allocated voting rights based on size, proportion of total value, etc. most costs are then split based on voting rights, i.e. My house is allocated 4 votes out of a total of 11.

PS.. I took over the management of our Body Corporate after 12 months of living here the company was basically collecting insurance premium once a year and paying the power bill quarterley And collecting a couple of thousand a year to do so. In the 14 years we have lived here the 5 properties have each saved many thousands in fees without issue.

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Mobydisc said..
I live in a strata unit I'm paying off and don't like it. Its small, only four units in the block which is generally good but means fees have to be higher to cover fixed costs. I currently pay about $3K a year in fees. What I don't like is what happened last year. We live on the downstairs unit. We noticed water dripping from the ceiling of the kitchen on the weekend. I notified the strata manager and in the end it took them a month to get it fixed. The strata insurers employed tradesmen who didn't give a sh!t and came from the other side of Sydney. In that time our unit suffered a lot of water damage in the kitchen and a bedroom. Mould grew. There were water marks down the walls and on the ceilings. This was in the middle of winter too.

The strata manager was sympathetic but basically didn't really care all that much and did nothing to hurry the repairs along. I felt like placing a water hose in the ceiling of his house, turning on the tap and then seeing how he felt about it.

So in the end its the lack of control that gets me. However on the other hand I'll stick it out as houses are so expensive, well over a million dollars plus the whole suburb CBD is going to be redeveloped with 25 story apartment blocks to be built and our place about 100 meters away. So I guess land prices will rise and we own a quarter of a fairly big block of land.

you don't actually own land , You own everything inside your walls .

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dusta said..

Mobydisc said..
I live in a strata unit I'm paying off and don't like it. Its small, only four units in the block which is generally good but means fees have to be higher to cover fixed costs. I currently pay about $3K a year in fees. What I don't like is what happened last year. We live on the downstairs unit. We noticed water dripping from the ceiling of the kitchen on the weekend. I notified the strata manager and in the end it took them a month to get it fixed. The strata insurers employed tradesmen who didn't give a sh!t and came from the other side of Sydney. In that time our unit suffered a lot of water damage in the kitchen and a bedroom. Mould grew. There were water marks down the walls and on the ceilings. This was in the middle of winter too.

The strata manager was sympathetic but basically didn't really care all that much and did nothing to hurry the repairs along. I felt like placing a water hose in the ceiling of his house, turning on the tap and then seeing how he felt about it.

So in the end its the lack of control that gets me. However on the other hand I'll stick it out as houses are so expensive, well over a million dollars plus the whole suburb CBD is going to be redeveloped with 25 story apartment blocks to be built and our place about 100 meters away. So I guess land prices will rise and we own a quarter of a fairly big block of land.

you don't actually own land , You own everything inside your walls .

Not totally correct, depends on the strata title. I definitely have clear title over my land within the strata title. My neighbour on a different strata title has just subdivided his block within an existing strata title. May be different in other states...

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Smithy said..

dusta said..

Mobydisc said..
I live in a strata unit I'm paying off and don't like it. Its small, only four units in the block which is generally good but means fees have to be higher to cover fixed costs. I currently pay about $3K a year in fees. What I don't like is what happened last year. We live on the downstairs unit. We noticed water dripping from the ceiling of the kitchen on the weekend. I notified the strata manager and in the end it took them a month to get it fixed. The strata insurers employed tradesmen who didn't give a sh!t and came from the other side of Sydney. In that time our unit suffered a lot of water damage in the kitchen and a bedroom. Mould grew. There were water marks down the walls and on the ceilings. This was in the middle of winter too.

The strata manager was sympathetic but basically didn't really care all that much and did nothing to hurry the repairs along. I felt like placing a water hose in the ceiling of his house, turning on the tap and then seeing how he felt about it.

So in the end its the lack of control that gets me. However on the other hand I'll stick it out as houses are so expensive, well over a million dollars plus the whole suburb CBD is going to be redeveloped with 25 story apartment blocks to be built and our place about 100 meters away. So I guess land prices will rise and we own a quarter of a fairly big block of land.

you don't actually own land , You own everything inside your walls .

Not totally correct, depends on the strata title. I definitely have clear title over my land within the strata title. My neighbour on a different strata title has just subdivided his block within an existing strata title. May be different in other states...

true but that depends on the type of title . Torrens or strata title ..

Either way strats titles are sh!t . my first property was a townhouse . never again . Most of the other units were investment properties and the owners could not give a **** about upkeep . Many suggestions to replace guttering etc when it was cheaper were voted down . Then when they gutters fell apart years later it cost 3 times as much .

I really hated it , and i even ran it for two years and just gave up as there was no point .

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dusta said..
you don't actually own land , You own everything inside your walls .

Yeah I understand strata entitles me to a particular piece of airspace that my unit occupies. However I also have one quarter control of the strata and the strata corp owns the land. So of course I can't sell my quarter but what will probably happen here in the next ten to twenty years is the building will be knocked down and a tower block will be built in its place. We live around two hundred meters from a major suburban train station where two lines meet and another hundred meters from a large Westfield shopping centre.

Like a computer, **** goes in, **** comes out....

Strata complexes can be good, or it can be a nightmare but in my ten yrs experience living in a strata complex, issues (and their management) turn on two fundamentals:
1) the number of owner occupiers actually residing in the complex versus the number of tenants renting in the complex; &
2) the extent to which owners are engaged with what is happening re: maintenance, standard of tenants (i.e. behaviour)

My complex (18 townhouses) has had two separate strata management companies involved over the ten yrs; one was useless & sucked us dry for a couple of yrs; the current one isn't so bad.

My strongest advice to anyone contemplating purchasing a strata unit/townhouse (as a residence) would be to become involved in the strata council so that YOU know/understand what's going on/have some input into the decision making process(es).

in nq insurance is a big issue. a couple of cyclones (one every thirty years) as opposed to annual storms in brisbane has meant that the specialist insurance premiums have skyrocketed. I think my mate (wha has two) said he was int he hole twenty k per year. have also heard many others grumble about repairs and painting. employing bad tradesmen etc.

Hi,

There are a various number of strata title formats. The main two are based on the old Building Units Plan (BUP), where you own whats inside the lot, say a highrise unit etc, or a Group Title Plan (GTP) where you actually own the land and the improvements on it. In modern complexes they are all designated as Survey Plans but the principals remain the same.

Within each there are two types of entitlements, Unit entitlements and Interest Entitlements. Unit Entitlements form the basis of what you pay for with regards to the Administration Fund and Sinking Fund. Interest Entitlements are used to calculate the Insurance Fund and therefore the amount you would be paid out given the complex was destroyed. It is also used to divide up sale proceeds in the event that the complex is sold on a "one Line" basis. In alot of instances both of the entitlements are the same but many differ and it is worth knowing this. Lower Unit Entitlements and higher Interest Entitlements equals good and vice versa is average / not so good.

As mentioned some Body Corporates are good, some not so. Prior to purchasing go and meet as many members of the BC Committee and the BC manager if possible, you can then get a feel for how its run, you should also be provided with some type of disclosure statement relating to the BC prior to entering into a contract to purchase that statement will outline current costs and history of BC decisions.

So back to the BUP / GTP side of it. If it is a BUP and the BC decides that the building needs painting you pay for your Unit Entitlement share of the painting. If it is a GTP scenario you pay for the cost of painting your lot......etc etc.

Hypothetically,if you buy a GTP type unit, you should be able to rebuild / subdivide etc, subject to Council Approval, however you will still be subject to BC approval, which can be painful to obtain, but beneficial if you can.

The most important part of any Strata is the CMS or Community Management Statement. The CMS outlines who is entitled to what and the rules of the complex. So read and be familiar with this document as it will determine what you can and can't do, usually down to if you can hang your beach towel over the balcony to dry or not.

Then there is, in Queensland anyway, the Body Corporate and Community Titles Act which overrules everything within the BC. Each state will probably have it own Act.

Anyway....thats the basic stuff and it then works its way into a myriad of stuff you don't even want to know about yet.

Talk to a solicitor before you get to an unconditional phase in any contract.

Cheers Cord.

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Mobydisc said..

dusta said..
you don't actually own land , You own everything inside your walls .

Yeah I understand strata entitles me to a particular piece of airspace that my unit occupies. However I also have one quarter control of the strata and the strata corp owns the land. So of course I can't sell my quarter but what will probably happen here in the next ten to twenty years is the building will be knocked down and a tower block will be built in its place. We live around two hundred meters from a major suburban train station where two lines meet and another hundred meters from a large Westfield shopping centre.

fark that

enjoy your ten 2 twenty years of misery

Strata = fine if you have level headed residents and committee members who understand the type of environment they are living in or that they have bought into. This is often a constantly changing thing

Terrible if you have someone on the committee out to feather their own nest at any cost, which usually results in everyone else living in the strata or on the comittee being paranoid about anyone elses motive. usually sensible people don't want to be on the committee - often those that do aren't cut out for a close community living style and probably would be happier living in more isolation.

I've lived in three, two were pretty good and well managed, but after this last one, it would be a last resort to live in one again

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theDoctor said..

Mobydisc said..

dusta said..
you don't actually own land , You own everything inside your walls .

Yeah I understand strata entitles me to a particular piece of airspace that my unit occupies. However I also have one quarter control of the strata and the strata corp owns the land. So of course I can't sell my quarter but what will probably happen here in the next ten to twenty years is the building will be knocked down and a tower block will be built in its place. We live around two hundred meters from a major suburban train station where two lines meet and another hundred meters from a large Westfield shopping centre.

fark that

enjoy your ten 2 twenty years of misery

I actually enjoy living here. Its a short walk to work, the shops and a big train station so I don't have to drive much, a blessing in Sydney. Its quiet and the neighbours are good. Its just this one incident has pissed me off. We have a strata meeting coming up in February and this will come to the table.

Just make sure you can afford the Strata Fees / Levies... Usually fees are about $1500 to $3000 per year... But $6k to $20k are not uncommon, but that is usually including a Pool, Spa, Sauna, Gym, BBQ Party Area, Concierge, manicured landscapes, etc...

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Simondo said..
Just make sure you can afford the Strata Fees / Levies... Usually fees are about $1500 to $3000 per year... But $6k to $20k are not uncommon, but that is usually including a Pool, Spa, Sauna, Gym, BBQ Party Area, Concierge, manicured landscapes, etc...

I knew of an apartment complex in inner Sydney that charged $5,200 p/a in strata fees for a 3 bedroom unit.
It had all of the above inclusions plus a second pool, 24 hr security guard and a tennis court.
That was in 2004 so God only knows what they are paying today.

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Haircut said..
Strata = fine if you have level headed residents and committee members who understand the type of environment they are living in or that they have bought into. This is often a constantly changing thing

Terrible if you have someone on the committee out to feather their own nest at any cost, which usually results in everyone else living in the strata or on the comittee being paranoid about anyone elses motive. usually sensible people don't want to be on the committee - often those that do aren't cut out for a close community living style and probably would be happier living in more isolation.

I've lived in three, two were pretty good and well managed, but after this last one, it would be a last resort to live in one again

I've found the people on our strata committee to be mental, none of them hold a supervisor or management position in the the real world, and as I said before they are not intelligent people.

I was on the committee but found it to be be frustrating and stressful. I left and keep out of it and I am happier.

That being said that being said they aren't too bad, i would buy into one again but always with the view that I would rent it out in the future.

Thanks for all the answers, theyve all helped to to clarify my thinking a great deal.

Looks like Im going to avoid Strata if possible. If I entered into strata Id be giving myself a lot of the same headaches (possibly more) that Im trying to get away from by buying out of the rent trap.