What is a strata company?
Have doubts about a strata title property investment? Or perhaps you want to familiarise yourself with the duties and rights of the strata company members before making a move? Either way, investments are a wise initiative, so congratulations are in order!
Understanding the strata company
The strata company, owners corporation, body corporate, or community association are pretty much the same thing, revolving around the effective management of the strata scheme. A strata title enables shared ownership through owning a section of the property called the lot or unit in a strata company. It could be a townhouse, an apartment, or a retail or commercial unit. In simpler terms, you own a unit or several units together with shares within the rest of the property, called the common property.
Common property is the sections managed collectively and may include the building’s external walls, driveway, garden, pool, roof, gym, and more, as every scheme is unique. Once you become a member of the strata company, you qualify to participate in its management while abiding by the bylaws.
Some strata schemes are up to managing their day-to-day responsibilities like the finances, maintenance and administration. Still, it’s no easy task, so most opt for professional strata management services.
What are my duties if I buy into a strata scheme?
As a member of the strata company, you have to adhere to the bylaws of the scheme. It may incorporate details like how to go about renovations or if pets are allowed in the building. You also have to pay your levies to meet:
If you think, ‘What are my levies?’ Every owner pays a different amount depending on the unit entitlement defined in the strata plan.
Another is attending various meetings, which is more of your right. It enables you to contribute to decision-making and even vie for a position in your committee. Also, keep in mind that you share unlimited liability if and when anything goes amiss, which makes strata insurance crucial.
These meetings are also used for the discussion of certain issues, which may incorporate voting regarding;
Nominating the strata council
Establishing the operating budget that will cater for the maintenance and repairs annually.
Adopting bylaws for the smooth running of the property.
Must I attend the regular meetings if I live in another city or country?
You do not have to, but it is in your best interest as an owner to be actively involved in the scheme’s matters. Besides, a proxy can’t stand in for you when voting.
Am I allowed to call for a meeting whenever I have a pressing or vital issue to address?
It is advisable to follow the proper procedures by first speaking with your strata manager, the chairperson, or the committee members. However, every scheme will have established various legislations; this should include how and when to call meetings.
Do strata schemes go with the majority rule, or is every vote meaningful?
Generally, it should vary based on the legislation in your state, not forgetting the type of decision matters too. In most cases, routine matters are assigned to the committee or professional strata management. On the other hand, levies and budgets are approved during general meetings. And to pass additional unexpected costs may also call for a general meeting. Sensitive decisions like altering the bylaws will only go through with a three-quarters majority of the owners and are dependent on the laws.
Buying a strata title property is undoubtedly a good investment, but knowing the obligations and rights around a strata company is also crucial. While at it, choosing a strata professional manager is the best way to avoid the headaches that come with the general responsibility of the common property.