If you are thinking of buying or you already own a strata property then you might be in for a surprise what this legal term implies in its narrowest sense. You probably know that strata properties are usually buildings or blocks of buildings in which the common grounds, like the lobbies and the playgrounds, are managed by owners’ corporations. This concept of property ownership is not only popular in Australia but more and more housing estates worldwide are coming up with strata regulations of their own. The legal is bit is perhaps the biggest snare for tenants as they are not always made aware of what the strata regulations allow them to do and what they are not entitled to.
Ownership of space
First things first, you need to know where the line of division between your and communal property runs. In most strata schemes, you become the owner of the inside space of the housing unit, i.e. an apartment in a building. What you own are the interior surfaces, like the walls and the flooring but you don’t own the other side of them, like the hallway walls and the façade. Everything outside your apartment, including the garages and the garden. is maintained by the aforementioned owners’ collective or a strata company as they are also called.
You are the king of your domain, which translates into responsibility for everything that goes inside your apartment. The maintenance of the elevators, mopping of the floors and trimming the garden all fall under the scope of owners’ association’s responsibility. Although the strata committee is mostly comprised of real estate owners, they usually delegate professional strata managing agents to take care of daily operations, so he or she acts as sort of a superintendent of the building. However, these people, alongside rental agents and other individuals who enter a strata scheme for a profit, cannot become members of the managing committee sue to conflict of interest.
Although strata schemes might seem like arrangements where everybody wins, the existence of so many factors means that a potential dispute is constantly looming in the air. For once, owners’ corporations can decide to sue the building company or their subcontractors (and/or suppliers) and on the other side, a title owner or tenant can get into a dispute with another owner or even the owners’ corporation itself. This is where experienced strata dispute lawyers come into play in an effort to mediate the dispute and try to find the best possible solution. After all, the people you as the tenant decide to be litigious about are your next doors’ neighbours so you might want to take it down a notch.
The risky renovation
Since you down actually own the walls of your home in their entirety as a physical object, according to by-laws, you are required to ask for a permit to hammer a nail for a picture. Luckily, this issue was more topical a few decades ago, as the current legislation does allow for different types of repairs or renovations, such as cosmetic, minor, and major. This means that you can nail the framed family photo but you have to notify the committee.
Any minor alterations that you wish to make to the property you occupy are going to require approval from the committee which is fairly easy to get for the most common improvements, like installing an AC unit. In fact, if several of your neighbours have already had similar work done to their homes, then this approval might be positive by default. Finally, any major changes you wish to carry out in the building, like tearing down sections of the wall, will require you to get a special resolution that is brought forward at a general meeting of the committee.
What does it cost to enter a strata scheme?
Coercive as it may seem at first but in strata schemes ownership implies membership, so you are required to pay levies. The strata company determines the annual rate that you have to pay during their general meeting and there are several factors which help determine individual amounts. In most cases, the size of the lot that a particular title owner possesses determines the levies that are due.
However, this money does not go to waste but it is reinvested back into the scheme through two separate funds. The first fund is used for day to day expenses, such as maintenance and hiring cleaning services. The second fund is a sinking one that is used when the need arises for capital investments that concern the interest of all the tenants. Such scenarios might include replacing the roof structure, painting the outside of the entire building or installing a new door phone.
A residential strata scheme is a communal living concept that has definitely stood the test of time. However, you as the tenant (or a prospective tenant) still need to learn more about your duties and your right, especially the legal ones.