6 common strata problems to look out for
Thinking of buying an apartment? Learn about six common strata problems, from hidden costs to poor maintenance, to help you make a smarter, more confident property decision if you’re considering buying a strata-titled property.
Buying a property that’s part of a strata scheme can offer a range of benefits. As well as being part of a community, you’ll also have access to shared facilities that typically aren’t available to standalone property owners.
However, there’s no doubt that strata living comes with its own set of challenges and considerations, which are important to be aware of.
By understanding the potential pitfalls of purchasing a strata-titled property, you can make a smart decision and choose a property that gives you all the advantages of strata living without the stress.
1. Poorly managed funds
Effective financial management is one of the key elements of a well-run strata scheme.
This includes maintaining a healthy capital works fund (also called a sinking fund) for long-term work, as well as an administrative fund for day-to-day expenses.
If strata funds aren’t managed effectively, this can lead to problems like insufficient resources for repairs and maintenance, and potentially having to pay special levies to cover shortfalls.
Before buying into a strata scheme, you should review its financial statements to ensure it's being managed responsibly.
2. Building defects and maintenance issues
Issues with the building and its maintenance can cause major headaches for strata-titled property owners.
These might range from minor cosmetic damage to major structural defects that need extensive remediation.
Investigate the building’s maintenance history and any planned works, so you can get an idea of the property’s condition and the likelihood of future special levies.
3. Disputes between owners
Spats and disagreements between owners are not uncommon when you’re part of a strata community.
Whether it’s noise complaints, pet problems, parking issues, or the use of common property, knowing how these disputes are managed can give you an insight into the effectiveness of the strata scheme.
Look for strata schemes with clear by-laws and consider how disputes have been handled in the past to assess the effectiveness of the strata committee.
4. Inadequate insurance
Strata schemes are legally required to have certain insurance covers in place, such as public liability and building replacement costs.
If a strata scheme is underinsured, owners can be hit with significant out-of-pocket expenses should an unforeseen event occur and cause major damage or loss.
Check the insurance policies in place on your strata scheme to make sure they’re comprehensive and adequate.
5. Lack of transparency and communication
Effective communication and a transparent approach are essential for a smooth-running strata scheme.
This can help with making important decisions, managing finances, and addressing concerns - while on the flip side, a lack of transparency can lead to mistrust and unhappy owners.
If possible, attend a strata committee meeting or speak to current owners about their experience with the scheme’s communication and management.
6. Overbearing strata rules
While rules and by-laws are there for a reason, overly restrictive regulations can impact your enjoyment of your property.
From by-laws relating to renovations and pet ownership to the use of shared facilities, carefully review the terms and conditions of your strata scheme to make sure they fit with your lifestyle and expectations.
While you may be smitten by a strata-titled property, taking the time to review its strata scheme can save you a lot of stress down the line. Now you know what to look out for, you can choose wisely and enjoy the many benefits of living in a strata community.
Keen to learn more about the home-buying process? Check out our other articles and stay in the know about all things home loans.
Unloan is a division of Commonwealth Bank of Australia.
Applications are subject to credit approval, satisfactory security and you must have a minimum 10% deposit or 10% equity in the property (LVR below 90%). Minimum loan amount $10,000, maximum loan amount $10,000,000, and total borrowings per customer across all Unloan loans is $10,000,000. You cannot borrow more than $2,000,000 of above 80% LVR loans. In some cases depending on the property’s location or type, we may only be able to lend you up to 70%.
Unloan offers a 0.01% per annum loyalty discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan. The loyalty discount is applied to your variable rate at the relevant time, and this rate may increase or decrease over your loan term. For more information view our rates and features.
*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.
Unloan is a division of Commonwealth Bank of Australia, and Commonwealth Bank does not provide tax (financial) advice under the Tax Agent Services Act 2009 (Cth). You should consider seeking independent tax advice from a registered tax agent, accountant or adviser before you make any decisions based on this information.
Applications are subject to credit approval, satisfactory security and you must have a minimum 10% deposit or 10% equity in the property (LVR below 90%). Minimum loan amount $10,000, maximum loan amount $10,000,000, and total borrowings per customer across all Unloan loans is $10,000,000. You cannot borrow more than $2,000,000 of above 80% LVR loans. In some cases depending on the property’s location or type, we may only be able to lend you up to 70%.
Unloan offers a 0.01% per annum loyalty discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan. The loyalty discount is applied to your variable rate at the relevant time, and this rate may increase or decrease over your loan term. For more information view our rates and features.
*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.
Applications are subject to credit approval, satisfactory security and minimum deposit requirements. Full terms and conditions are found on our Unloan Terms and Conditions. Modified Terms and Conditions will be set out in our Notice of Variation Agreement, if you are approved. This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.
Unloan offers a 0.01% per annum loyalty discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan. The loyalty discount is applied to your variable rate at the relevant time, and this rate may increase or decrease over your loan term. For more information view our rates and features.
*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.
