Buying or selling a strata property in Australia is different from dealing with standalone houses or land. Strata properties—such as apartments, townhouses, and units—come with unique legal and financial obligations that every buyer and seller must understand. Misunderstanding strata laws can lead to unexpected costs, disputes, or complications during settlement.
At The Simple Settlement Co, we specialise in ensuring a smooth property settlement for strata buyers and sellers. Here’s why understanding Australian strata laws is essential and how a conveyancer plays a crucial role in the process.
What is Strata Property?
Strata properties are part of a shared ownership structure where multiple owners have individual ownership of their unit or lot but share responsibility for common areas such as gardens, hallways, pools, and parking. These properties operate under a strata scheme, which is governed by a strata corporation or owners’ corporation responsible for maintaining and managing the shared spaces.
When you buy a strata property, you don’t just own your unit—you also become a member of the owners’ corporation, meaning you have a say in decisions about the entire complex, including maintenance, insurance, and strata fees.
How Strata Laws Impact Buyers and Sellers
Strata laws vary by state and territory, but they generally cover how a strata property is managed, what fees and responsibilities apply, and how disputes are handled. Here’s what buyers and sellers need to know:
For Buyers: What You Must Consider Before Purchasing
Strata Levies (Fees) – All strata property owners must pay levies to cover maintenance and administrative costs. These fees can vary significantly based on the property’s amenities, so understanding the financial commitments before purchasing is crucial.
By-Laws and Restrictions – Strata schemes have specific rules that regulate everything from pet ownership to renovations and parking rights. Buyers must review these by-laws to ensure they align with their lifestyle needs.
Financial Health of the Strata Scheme – Buyers should check the strata records to determine if the scheme has enough funds for ongoing maintenance or if special levies are likely to be imposed for major repairs. A poorly managed strata scheme could mean unexpected costs for new owners.
Insurance and Maintenance Responsibilities – Unlike standalone properties, strata owners share insurance costs and maintenance obligations for common areas. Buyers should understand what repairs and upkeep they are personally responsible for.
For Sellers: Key Considerations Before Selling a Strata Property
Providing a Strata Information Certificate – In some states, sellers must supply potential buyers with a strata report detailing the financial and management aspects of the scheme. A well-maintained and financially stable strata property is more attractive to buyers.
Outstanding Levies or Special Fees – If you owe unpaid strata levies, these must be cleared before settlement. Outstanding fees could delay the sale or reduce your final proceeds.
Approval for Renovations or Alterations – If you’ve made modifications to your unit that required strata approval, you need to provide documentation proving that all changes were compliant with strata by-laws.
Disputes with the Strata Committee – If you’re involved in a strata dispute, such as unpaid fees, disagreements over repairs, or neighbour conflicts, these could impact the sale. Resolving disputes before listing your property can help prevent settlement delays.
How a Conveyancer Helps with Strata Property Settlement
The settlement process for strata properties involves more complexities than a standard property transaction. This is where a conveyancer plays a crucial role in ensuring a smooth, compliant sale or purchase.
Key Ways The Simple Settlement Co Assists with Strata Property Settlements
Reviewing Strata Documentation – We review all strata reports, by-laws, and financial records provided under the Contract and as provided by enquiries to the Strata Company prior to settlement to ensure buyers understand their obligations before settlement is completed.
Clarifying Special Levies & Fees – We check for outstanding levies or hidden costs that could impact your financial commitments as a buyer or seller.
Confirming Ownership Rights & Restrictions – We help our clients understand their rights and limitations regarding renovations, subletting, and shared facilities as per the by-law or management statements registered to the Scheme.
Managing Settlement Payments & Transfers – We oversee the financial transactions, ensuring that all strata levies, outstanding fees, and other costs are adjusted between the vendor and purchaser at settlement.
Why Understanding Strata Laws is Crucial for a Hassle-Free Transaction
Many first-time strata property buyers and even experienced investors underestimate the impact of strata laws on their ownership experience. From managing costs to dealing with the owners’ corporation, having a clear understanding before purchasing can prevent future disputes and unexpected financial burdens.
Sellers, too, must ensure they meet legal requirements to avoid settlement delays and maximize their property’s market appeal. At The Simple Settlement Co, we simplify the process for both buyers and sellers by helping with the complexities and ensuring everything is in place for a successful settlement.
Ready to Buy or Sell a Strata Property? Let Us Handle the Details!
Strata property transactions require attention to detail, compliance with regulations, and careful review of documents. At The Simple Settlement Co, our experienced team is here to guide you every step of the way.