Strata Buyers Encouraged to do Their Homework
Queenslanders looking to buy strata titled property need to take more care in doing their homework and reading the contract fine print, or they run the risk of facing unexpected costs.
And some buyers are guilty of just being too careless in checking their contract details or gaining a clear understanding of the differences between detached houses and strata communities.
I believe investing in an apartment or strata lot, rather than a detached house, is often a more cost-effective solution for price-sensitive home buyers; however I urge potential buyers to ensure they do their homework before signing a contract, to avoid facing unexpected fees in their first year. New or potential owners should ensure they have a good understanding of what their purchase price includes, before signing on the dotted line. They also need to be aware of differences in costs between a detached house, where buyers are responsible for all expenses, and a strata community, where some costs are shared between owners.
A purchase price covers the cost of the apartment but owners need to ask whether that includes other necessities, including fire compliance or pest control. In newly constructed buildings, owners should ask if the phone lines are ready to be connected – these are the kinds of things that people may just expect but, unless they ask, they can’t be sure.
For people who have not bought into a strata community before, I would suggest doing some serious homework into how fees work within the community. The most obvious one is body corporate fees – all strata communities and apartment complexes have a committee in place to manage the common areas of the complex, so owners are all required to pay a fee to for this service and this usually isn’t included in the purchase price. When new owners receive the bill from the body corporate manager, they may not understand why they have to pay and they may think it goes straight into the body corporate manager’s pocket, which is simply not the case.
There are obvious benefits in sharing costs between owners in a strata community. If you own a detached house with a pool, for example, you would have to pay for all of the pool maintenance costs. In a strata community however, these costs are shared between all owners, so are obviously reduced. Similarly, expenses for building maintenance are shared between all owners, which will reduce the overall costs for owners, compared to a detached property.
At the end of the day, it all comes down to education and effort. If a potential buyer does their research and has a good understanding of what their purchase price includes and, more importantly, what it doesn’t include, they can make an informed decision about going through with the purchase.
This really is a boom industry in Queensland’s property sector, and as long as people are coming into it with open eyes, it can be a very fulfilling opportunity for investment or living.
James Freestun
Strata Community Australia
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