Is anyone able to explain how strata title works when purchasing a unit? I’m not sure exactly what it means.
Regards,
[strum]
F1JORDANHI Jordan,
In brief strata titling occurs when a large piece of green titled/freehold land is broken up into smaller pieces of land – typically this occurs when a large block is subdivided.
Sometimes the redevelopment may see adjoining blocks redeveloped as a single entity and then each unit having its own ‘piece of land’
Practically speaking this means each unit owner buys part of the whole block with the relevant portions of ownership being determined by the strata plan. This share is expressed in percentage terms.
Each owner is required to contribute their share of the costs of maintaining the common property (shared facilities – pool, drive way, BBQ areas etc that may be included in the development). The contributions are usually levied on a per share basis. There was a recent case which tested this on the Gold Coast where the lower unit owners were paying the same (on a per share basis) as owners in the upper levels even though the higher units were more valuable.
Depending upon the number of units in the strata complex there may (or may not) be a requirement for a strata management body to be formed which makes decisions about the maintenance and upkeep of common property. The strata management group is also responsible for insuring common property and ALL of the buildings.
Trust this helps
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Derek, thanks for the explanation. Perhaps it is easier to skip over the development stage and buy in at the completed block stage. The strategy being to buy at wholesale and sell the units off individually at retail. I notice this is was what Steve McKnight did recently. Where do you start looking for these opportunieis? Do you ring around develeopers? Or do you start with the councils?
We find comfort among those who agree with us – growth among those who don’t. Frank A. Clark.
Thanks for the replies people. I have been looking at purchasing individual units (to start with) that are posatively geared. I was just working out what risks I have ahead of me & if I anything stood out from what you have said.
Regards,
[strum]
F1JORDAN
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