Strata Title FAQs

Q. I live in a home unit building and it is full of defects, what should I do?

A. First, you need to inform the Owners Corporation including the secretary and chairman and/or the managing agents so that they can have the problem inspected.  In many of these cases where the damage is common to a number of unit owners the owners corporation will need to instruct lawyers to protect the owners’ interests where reasonable attempts have not been made by the builder to rectify the problems or where attempts have been made which failed and the damage remains or worsens.

Q. What happens when the Owners’ Corporation will not put enough money away to cover long term repairs?

A. The Owners’ Corporation is required to budget for foreseeable repairs.   They cannot just issue special levies where the expense was foreseeable.

Q. I have a part of the common property which is not on my title but no one uses the area except me. How can I formalise my use of this part of the common property?

A. There are several ways of doing this, all requiring the consent of the owners corporation of course. These include:

• Merely obtaining permission or a 'licence' from the owners corporation to use that part of the common property.
• Arranging for a lease of that part of the common property.
• Arranging for exclusive use rights with respect to that part of the common property to be given by way of a by-law.
• Acquiring the freehold of that part of the common property.

Of these, the most secure is the last one referred to, where the freehold rights are acquired. However this is the most complicated and most expensive alternative. This would usually involve the preparation of a strata plan of subdivision and the re-definition of the common property. All of the other methods entail that part of the common property concerned remaining as common property, albeit with rights given to one owner.

The most frequently used is the third-mentioned alternative, the granting of exclusive use rights to the owner of one particular unit. This would not normally permit that owner to construct any building on that part of the common property land. To be effective, the exclusive use rights need to be formalised by registration of the change of by-laws document on the title to the common property.

Q. My unit has a smaller area than most of the other units, yet I pay as much in levies as everyone else. Why is this?

A. The strata title unit entitlement is determined early in the piece in the creation of the strata scheme. The strata scheme levies are made in accordance with the unit entitlements. The unit entitlements can be determined by several factors such as the size, position, aspect, facilities etc. which the unit has going for it.

It may be that your particular unit has other factors which more than outweigh the floor area, such as its being a penthouse unit, giving it a higher-than-average unit entitlement.  

Q. I have had a cat for about 7 years and don't want to part with her, but I'm buying a home unit. Can I take the cat with me?

A. This will depend on the strata scheme by-laws for the particular strata scheme and whether they allow the keeping of pets, and in particular, cats. The usual strata scheme by-laws nowadays allow for more flexibility in this regard than used to be the case. In some cases where certain by-laws are adopted, the owners corporation cannot withhold its approval unreasonably.

Q. I live in a home unit and have rowdy neighbours who say that as they don't own the unit they're living in, they don't have to abide by the by-laws. Is this right?

A. Strata title by-laws operate for the benefit of and impose obligations on both occupiers and owners alike. Consequently your neighbours are wrong. They must also abide by them, as you and everyone else in the strata scheme must do. 

Q. I'm looking at two home units to buy. One is a strata title unit while the other is a company title unit. What's the difference?

A. With strata title units, you have an ownership of the land. By contrast, with company title units, you own a parcel of shares, and by owning that particular parcel of shares, you have a right to occupy a particular designated home unit. It is usual with company title units for the board of directors' approval to be required before any transfer or lease can be made. However this is not the case with strata title units where there is freedom of transfer, lease, and other kinds of transactions concerning the property. It is also more difficult to carry out alterations to the unit where company title is concerned. Because of the restrictions there is often, but not always, a discount on the market price of company title home units compared with strata title units. Therefore they are usually cheaper to buy but consequently the resale value is often (but not always) lower. 

Q. I'm thinking of buying a strata title unit but am unsure of what I'll end up owning. I'm mystified by the legalities of property ownership. What will I own?

A. With strata title units, generally speaking you own the airspace bounded by the walls, floors and ceilings together with the surfaces of those walls, floors and ceilings. You don't usually own structural walls though you may do so in the case of internal walls. You also own a share of the common property as a part owner, though your share is obviously not severable, that is, it is not a distinct and separately identifiable part of the common property land.  

Q. I'm looking at buying a unit in Chatswood and have seen work on a building site where there's a sign saying 'For sale: 2 and 3 bedroom luxury apartments: 85% of apartments sold. Don't miss out.' Should I act now as they seem to be selling quickly or am I better off waiting?

A. It has been common over some years to sell home units 'off-the-plan', that is, where the units are being sold while still in the course of construction and before being completion. This of course assures the developer / builder/ vendor that the properties are actually being sold and that therefore they will receive their return on their investment sooner rather than later. The problem from a buyer's point-of-view is that he or she cannot see what they're going to end up with. The building and with it, the individual units might end up fraught with a multitude of problems. The purchase contract cannot foresee all of the practical problems which may eventuate. At best the contract may provide certain ways by which certain problems can be overcome but this is not a guarantee that the finished product will be free of faults.

Q. I'm buying a home unit. Should I get a building inspection carried out or is it an unnecessary expense?

A. You should be mindful that while it is common or even usual for a buyer of a strata title unit to get only a strata scheme records inspection carried out, without being concerned about a building inspection, such an inspection of the strata scheme records may not tell the whole story. For example, there may be certain building problems which the owners corporation has just become aware of recently and which have not been recorded anywhere or minuted in owners corporation meeting papers. Alternatively, there may be problems which, quite simply, no one in the owners corporation is aware of yet.  

Q. When buying a strata title home unit, what is the minimum I need to know when buying from a legal standpoint?

A. Buying a strata title unit is really little different from buying other real estate except that there are additional considerations and factors to be taken into account. Those additional considerations include among other things: information on the status of the owners corporation's funds (the sinking fund and the administrative fund); the levies applicable to the particular unit (the amount and regularity of payment); what the strata title unit entitlement is for the particular unit you are buying; insurance taken out by the owners corporation and whether it is adequate; whether there is likely to be any special levy cast because of work need to be undertaken and an insufficiency of funds, and if so, what would be your contribution; the ratio of owner-occupied units to the whole; the extent of harmony within the strata scheme; and whether there are any claims against the owners contribution, and if so, are they likely to lead to (costly) litigation. This list is not exhaustive, so there may well be other things which are of special interest to the unit you are buying, such as those relating especially to retirement village home units. 

Q. I live in a strata unit and the people upstairs have installed floorboards without the permission of the owners’ corporation. The owners’ corporation are loath to do anything as they wish to promote good fellowship between all. Is there anything I can do in the circumstances?