Are you interested in a strata property? The truth is, most buyers do not understand how strata developments work. Below are some things that you should know about strata developments.
Forming a Strata Development
Strata developments are formed when a subdivision compels property owners to share common amenities such as parking lots, access roads, and parks. Some terms you should know when buying a strata development include:
- Lots: These are the units that make up the strata development.
- Schedule of entitlements: It is a comparison between one unit and the others. It could be based on the size of the unit or its current market value.
- Owners corporation: It comprises people that own units in the strata development.
- Body corporate: It is the leadership of the owner's corporation. It consists of the chairman, treasurer, secretary, and departmental heads.
- Administration sheets comprise the development's bylaws, strata development registration documents and unit entitlements.
Managing of a Strata Development
The owner's corporation determines how residents in the strata development will use the common property. Typically, the corporation meets and elects the body corporate to ensure members adhere to the bylaws. The bylaws could include the following:
- The number of parking lots allocated to each unit. Some units (based on the schedule of entitlements) could have more parking lots than others.
- The amount that members will pay to maintain common property. Typically, larger or more expensive units will pay more.
- The frequency at which members will meet.
- The dispute resolution mechanism to be used when members have internal conflicts.
- Penalties to be imposed when members break the development's bylaws.
- The development laws that apply in the development. For example, members could be prohibited from changing their homes' design to ensure units in the development maintain their original appeal.
What You Should Know When Joining a Strata Development
Your primary concern when purchasing a unit in the development is its price. Ideally, your real estate agent should appraise the unit to ensure that it is reasonably priced. Additionally, the agent should commission a property inspection to determine your unit's condition and the shared property. Once you sign the contract of sale, the agent should contact the strata management and ask for the association's bylaws and financial statements. These documents will help you determine how well the association is managed. Besides, you will know whether the development has debts.
You now have a comprehensive understanding of how strata developments work. An experienced real estate agent will help you as you buy the unit.
