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Check The Data Before You Strata

By Rebecca Zhang

IT doesn’t take a property guru to know that in most cases, apartments are cheaper to buy than houses. But some househunters are put off buying a strata property because of the fiddly fees.

Strata levies can vary dramatically from building to building and neighbourhood to neighbourhood but with an educated guess, potential buyers can work out what they should be paying – even in a new building.

One of the first steps when buying into an apartment building is to have a professional do a strata check. However, in the case of an off-the-plan purchase, there are only ever estimated strata fees to check.

Exorbitant fees can be charged in prestige buildings to cover things like concierge services, elaborate security or even five-star communal spaces such as cinemas. But in an average building, something as standard as a lift or swimming pool can add to the fees.

David Ferguson, NSW president of Strata Community Australia, said: “The best thing buyers can actually do is look at nearby buildings that are a similar size and might be about 10 years old. It should give them an idea of what costs they will incur in the near future.”

Mr Ferguson, who also runs Strata Plus, said developers or builders should engage strata agents to work out what the future levies should be. He said if buyers did their homework they would not then be stung by high fees.

“You have to remember that strata laws are put in place to give consumers that power to decide what their strata levies should be. And when they’re put together they’re often done on a best efforts basis,” he said.

“One of the biggest tips for buyers into new buildings is that strata law requires that by the second annual general meeting the owners corporation must get a sinking fund assessment by a qualified professional,” Mr Ferguson said.

He said purchasers tended to worry about costs of pools, gyms and lifts, but they should consider how buildings stack up on their own merits.

“For example an elevator costs about $8000 a year to operate which is a significant cost if there are only five apartments, but the cost becomes more manageable if you divide that between 20, or 50 units,” he said.

“The biggest factor … is the increase in on-site labour costs; cleaners, gardeners. Insurance hasn’t changed much over that time and neither has strata management costs,” he said.

“You’ve got to think about will you use the facilities? When you do use them, then is it that good value?” he said.

Mr Ferguson advised owners to be an active member in body corporate decisions.

“Even a bad building that has been set up with inefficient water and electricity bills can be changed to a good building with a bit of effort,” he said.

Veronica Morgan, buyers agent with Good Deeds and co-host of Location, Location, Location on the Lifestyle Channel, said buyers should be aware that hunting down so-called “cheap” strata levies was not necessarily best for buyers.

“I think it’s a real mistake to assume that if a building has low levies it’s a great buy. What it could mean is that there has been some bad budgeting,” she said.

“As a buyer you should just judge a building on its own merits. With strata fees it’s not a one-size-fits-all approach.

She added: “I’d suggest that when you add up the costs around maintaining a house it will usually cost a whole lot more,” she said.

“Having another level of management taking care of things can be a great lifestyle so you really do need to put everything into context.”


* Have you seen the by-laws?

* Can you keep a pet?

* Can you hang washing outside or will you have to buy a clothes dryer?

* Will it be difficult for you if there are restrictions on visitor parking or where your children can play?

* Are there restrictions on the use of the common property which could affect you?


* Is there a strata manager?

* Is the building insured?

* Are there enough funds to cover long-term maintenance?

* Is there outstanding or planned building work which could mean special levies?

* Have you had a detailed strata search through a specialist?

* Which parts of the unit are in the “lot” and where are the common property boundaries? Pay attention to balcony walls, railings, sliding doors and garage doors.


SINKING FUNDS set up by the owners corporation to cover future capital expenses.

MOTION a proposal or suggestion to be discussed at the meeting and voted on.

POLL VOTE can be demanded by any owner on any motion at a general meeting. Counted by unit entitlements rather than one person, one vote.

PROXY an owner may authorise someone else to vote on their behalf at general meetings by completing a prescribed proxy form.

RESOLUTION a decision of the meeting (made after taking a vote).

SPECIAL RESOLUTION where no more than 25 per cent of votes, on unit entitlement, are cast against.

UNIT ENTITLEMENT: each lot has a comparative value that is decided when the strata plan is registered.


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