Top Tips When Buying Property with a Strata Title
Most people will have reservations when buying a property in a strata development. Below is a step by step guide on how this works so you can have more confidence when buying property.
Ask your conveyancer or real estate agent to organise a property inspection. Property inspections will give detailed insights about the current condition of the property. For example,when buying a flat, the inspector will examine the presence of pests, the structural integrity of the house, the quality and state of internal fixtures and the presence of land contamination in the area. Some buyers will forego property inspections since they think it is an unnecessary extra cost. However, it helps improve your bargaining power. For instance, you could ask for a discount if the house contains dangerous substances such as lead or asbestos.
Check the strata bylaws. Some of your concerns should include:
- Who are the members of the owners committee? It should comprise people with leadership and management experience.
- What activities are prohibited on the compound? For instance, residents may be restricted from playing loud music or holding parties at night.
- Are there restrictions on the use of common property? For example, the pool could be closed at night.
- Check development restrictions. For instance, the owners association could compel you to use certain fences. Besides, you could be prohibited from building extensions or installing landscape fixtures.
- Some strata developments will allocate a specific number of parking lots to each resident.
Most people will be interested to know how much they should pay for property maintenance. However, it would be worthwhile to examine the finances of the owners association to determine the following:
- What are the priorities of the association? Typically, money contributed should help improve the value of the property.
- Does the association have any loans? If it does, inquire whether new members will make loan repayments.
- Check the books of accounts to identify signs of financial improprieties. If they exist, do not purchase the property.
Your real estate agent should conduct an appraisal to determine whether the property is reasonably priced. They should examine the price of similar properties, the size of the property, quality of interior fixtures and the location of the property. Real estate agents will use a variety of tactics to ensure a price cut. For instance, they could use delay tactics to make the seller desperate. Alternatively, they could advise you to wait until the low season.
When buying property in strata developments, conduct a property inspection, examine the strata bylaws, check the strata finances and conduct a property appraisal.