When you're looking at purchasing a strata titled property, there are a number of things you would know to consider. Does the property come with any draconian bylaws that might impact your decision? It might be that you wanted the property to generate income as a holiday rental, which might simply be prohibited. Or it might be that your dog will not be welcome at the property. There are other key issues regarding the purchase of a strata titled property, and this can be uncovered by your conveyancing professional. So what are some issues that your conveyancing professional might present to you?
One of the key issues pertaining to conveyancing for a strata titled apartment or townhouse is whether you will be liable for any future expenses. Certain aspects of conveyancing remain the same regardless of whether you're buying an apartment, a townhouse or a self-contained home, but strata titled properties can sometimes come with hidden financial burdens. It's not as though the strata management group is looking to deceive you, but these future expenses might end up being the responsibility of the property owners within the strata group.
These hidden financial burdens are maintenance or building defects that need to be rectified. The cost of general maintenance will be covered by your strata fees, and yet there might be insufficient available funds to cover significant maintenance or building defects that might have been noticed and yet not repaired. This might be something like bringing the building up to the necessary safety code, such as if it has been identified that the building does not have an appropriate fire detection system for its size. It might also be something cosmetic, such as fresh paint for the building. Of course, once you own the property, you will have the power to vote against non-urgent, non-mandatory work.
Your conveyancing professional can examine the previous minutes from the strata group's annual general meeting (AGM) to actually look for evidence that these significant maintenance issues or building defects have been identified. They will generally examine the minutes and other relevant documentation going back several years. Your conveyancing professional will then present you with the following information:
- The nature of the significant maintenance issues or building defects.
- If a timeframe for work has been established.
- The approximate cost of the work.
- Whether there are sufficient funds to cover the cost of the work in the strata title group's administrative fund or sinking fund. This point is key because the onus will then be on the respective owners to make up any shortfall.
So really, when you select a conveyancing professional, it can be prudent to choose one who has extensive experience with strata titled properties. What can be a fairly straightforward purchase can come with some hefty hidden costs without the appropriate research during the conveyancing process.