A strata property is usually made up of a number of units, referred to as lots. Strata properties also have ‘common property’, such as hallways and gardens, which every lot owner is (usually) entitled to use. A strata property will usually always have a strata management in place to manage the property and be responsible for maintenance, repairs, insurance and holding general meetings to decide how the property should be managed. You sometimes find that a strata with just two properties forming the strata manage the insurance and repairs themselves without recourse to a strata management team.
When you purchase a strata property you will have to pay strata levies. These are billed in quarterly instalments. The levies are for the ongoing maintenance and management of the property common areas, such as walls and roofs. Your lot size will usually determine how much you pay in strata levies. Prior to you exchanging on the property, our conveyancing and property lawyers will ascertain how much the levies for a particular property are. Sometimes levies can be quite high and this may take the property outside your budget.
Strata properties will also time to time incur what is known as special levies. Special levies are levies that are imposed on all unit owners in order to carry out major repairs if there is not sufficient money in the capital works fund to pay for the repairs.
If special levies are imposed the amount of special levy you pay will depend on your unit entitlement. With the result that those with a higher unit entitlement will pay a higher amount for special levies.
With any strata property our property and conveyancing lawyers will:
- Obtain a strata report which will show the current amounts payable for the sinking fund and administrative fund.
- Check the strata report for special levies.
- At your request have a company inspect the books of the strata to ensure the strata company is financially sound.
- Obtain a copy of the insurance certificate over the common property.
- Ensure that any levies are adjusted between you and the vendor.
- Ensure that any special levies which are the responsibility of the vendor are paid by the vendor.