Strata titling allows someone to own a share of a community property even if they don't live or rent a unit in that building or complex. Strata titling is an excellent option for private property owners and investors, but it's good to note some key details about strata titling before you decide if this is the right choice for your investment portfolio. Note some vital information about strata titling and especially the rights of an owner, and then discuss this arrangement with a real estate agent or investment attorney as needed.
What is strata titling?
Strata titling refers to individual ownership of a particular unit in a building or complex, as well as shared ownership in the rest of the property or the common areas. This ownership is obtained through what is called a body corporate.
Everyone who owns a share of the property is considered part of that body corporate, and each owner can vote on management decisions at its annual meetings. The body corporate can also hire an outside company to make certain decisions on behalf of the owners, such as hiring new groundskeepers or making needed repairs and renovations.
What is owned in a strata plan?
While strata titling is generally similar in design for every property, each particular strata scheme will be different; for example, every strata scheme will spell out the boundaries included for each unit and what everyone on the body corporate actually owns. For instance, an individual storage area might be considered part of your unit while the hallway directly outside an apartment is owned by the body corporate; you can then store what you want in the storage unit but might be limited by the rules of the body corporate as to what you can place right outside your unit!
If you're considering buying into a strata scheme or investing in strata titling, be sure you understand the boundaries for every unit and what every owner has claim to individually. This will ensure you make an informed decision about the best strata scheme for your investment dollars.
Can an owner modify their unit as they see fit?
Every strata plan will include some limitations as to how each unit can be modified or renovated. For example, many multi-storey buildings don't allow hardwood floors in order to prevent noise disturbances for the occupants of the lower levels. In any case, as with ownership, be sure you know all rules and restrictions included in strata titling.Share