Buying into a strata? Time to research your strata documents.
Buying into a strata is unlike buying a detached home and it is important that you understand that it is a unique form of ownership. So you should read up and review the strata documents given to you by your real estate agent or the strata corporation. By doing this you will learn about the history of the building and if it is being maintained. Then hire a reputable home inspector to go over the building with their “fine tooth comb” so to speak. As a result of doing this review and then having an inspection you will be ready to make a confident purchase.
This blog is an introductory explanation of what a “strata” is. Additionally, I am giving you a few hints on what to look for in the strata documents.
What exactly is a strata?
A “strata” is a building, divided up into sections call ‘lots’. When you buy a ‘lot’ you own the individual lot (for a condominium: the actual interior area of your unit). You also own a share of the “common property” with the other ‘lot’ owners.
Common property: Areas owned in common by all the people who own a unit in the building. Each unit shares financial responsibility of the maintenance and repair of these areas.
Strata Corporation: The ownership at large. It has a registered strata number and runs like a company. The corporation has its own bylaws/rules, bank accounts etc.
Strata Council: A group of elected owners. They direct the property management company on the running of the building.
Strata fees: Monthly fees owed by each strata lot. It provides regular income to maintain the “common property”.
Meetings: The strata council meets monthly / every few months. They discuss issues affecting the building, maintenance schedules, and building financials.
Annual General Meetings: Every year the ownership at large meets to approve the financial budgets. All the owners vote, and make decisions that affect the building for the next year. Sometimes a Special General Meeting (SGM) happens mid-year. These occur if there is something crucial to discuss.
Special Levies: Sometimes unforeseen events can occur that can be expensive to repair or correct. Like roof leaks, boiler replacements, deck replacements etc. In this type of instance the building needs to raise funds by a special resolution.
Contingency Reserve fund: A fund reserved for making expenses that only occur less than once per year. Or that do not usually occur that must voted on by owners unless it is for an emergency. Simply; money set aside in case of an emergency.
What to look for:
Look at the info-graphic below. This is a very basic explanation of tips on how to read and what to look out for in the strata documents. But keep in mind, reading these documents are only a part of the research needed when purchasing in a strata.
Now you will be more prepared to complete your research with your real estate agent. Also for a worthwhile extra cost (extra piece of mind) hire a lawyer that specializes in strata law. They can further analyse the documents. Finally, by combining this research with a comprehensive home inspection you will a confident and smart buyer for the most important investment of your life.
Until next time, thanks for reading.
Author: Geoff Bohaker for Shelter West Home Inspections
For more articles from Geoff, check out his monthly articles for Chiganic magazine.
Disclaimer: All information located on in this blog is done so as a courtesy. It is for general information only, and not intended as legal advice. Reliance upon the accuracy of the information contained herein is at the user’s risk. Shelter West Home Inspections and Geoff Bohaker accepts no liability for any errors or losses that may result from reliance on information contained on this website.