What you need to know before buying a strata unit


In decades gone by it was common for first-time buyers, in fact, all buyers, to purchase a house in the suburbs. SydneyTerraces

A lot has changed since then, however, and more and more people are choosing to buy and live in units and townhouses, usually because of their superior positions closer to the city, their affordability, and less time required for maintenance.

Nationally 9% of our population live in apartments or 15% of households. Unsurprisingly, New South Wales has the highest proportion of apartment dwellers at 15% of its population (22% of households)

However, interestingly, it was the smaller territories that followed, with the ACT and NT recording an equal 10 percent of their residents in apartments (17 and 19 percent of households, respectively).

Tasmania has the lowest, with only three percent of residents living in apartments, just under WA and SA’s equal four percent.

But if you’re considering buying into a strata scheme, there are some unique and some not-so-unique elements that you must understand before signing on the dotted line.

What is a strata title?

Strata title is a method of facilitating individual ownership of part of a property – generally an apartment, unit, or townhouse.

Uniquely, strata title allows for individual ownership of an actual lot or unit whilst sharing ownership of the common grounds on which it is built.

The concept only came into being 50 years ago, however, there are now more than 340,000 strata title properties nationally providing close to three million homes across Australia.

Investing in a strata title property can be a smart move – it’s often an affordable way to enter the property market, and can be beneficial in managing repairs and renovations down the track

But whether you’re buying a unit or a townhouse, you should look into the history of the property and its strata scheme before you sign the contract to ensure you know exactly what you will own and what’s deemed to be common property, that is, shared by all of the owners in the owners’ corporation or body corporate.

Generally, as a strata owner, you own the air space within the boundaries of your lot, while the owners’ corporation owns and controls the fabric of the building and the land under and around it.

Common property is all of the areas of the land and building that aren’t included in any lot.

The common property boundaries of each lot are generally formed by:

  • the upper surface of the floor
  • the under the surface of the ceiling
  • all external or boundary walls (including doors and windows).

Being an owner in a strata scheme:

  • Your ownership includes your individual unit or apartment as well as sharing ownership and responsibility for the Common Property. Buying-a-new-property-off-the-plan-Feature-RET-300x200
  • You are automatically a member of the Owners Corporation, which has responsibility for the Common Property.
  • You will regularly (generally every 3 months) need to contribute to the cost of running the building by paying Strata Levies in addition to rates and taxes for your property.
  • Compared to owning a freestanding house, there could be lifestyle restrictions in a strata scheme, e.g. there are rules (by-laws) that may affect you doing renovations to your unit; where you can and cannot park your car; noise control; where you can dry washing; whether you can or cannot keep pets.
  • Each owner has principle obligations in relation to their lot and the common property and if they are an investor to ensure compliance with the scheme’s by-laws is a condition of the tenancy agreement

You should study all of the provisions of the contract – including the description of the property – and make sure that the plans attached to the contract match the property.

You should also check the following:


Before exchanging contracts, you must check that the list of inclusions is accurate and complete.Property-Investment-Checklist-300x199

All fixtures are included in the purchase without having to be named.

Under the law, a fixture is something that’s so attached to the land that it must have been intended to remain there permanently.

If you’re in doubt whether a particular item is a fixture, it’s best to mark it as inclusion or mention it by name in the contract.

Fittings such as floor coverings, cupboards, and the kitchen stove may belong to you as the new owner, but they’ll need to be itemised as ‘inclusions in the contract.

Where possible, include as much detail about the inclusions, including brand names to avoid any doubt. Man Signing Contract

Once you’ve settled on the property and taken ownership, you may replace or modify the fittings without consent.

However, with strata units, if you want to make changes to the fabric of the building, or wish to build new structures – such as installing an air­ conditioning unit – it’s important that you first notify the owners’ corporation first.

This is because the owners’ corporation has the power to stop any alteration or structural renovation being made to a lot if they believe it will interfere with the common property or the supporting structure of the rest of the building.


Each lot owner has title to air space, as shown by the lot boundaries in the strata plan, and has the right to use the fabric of the building and the access ways, corridors, and the grounds around the building in common with the other owners.

Each owner also has a share in the common property, called a unit entitlement, which decides voting rights, and each owner’s contribution to the maintenance levies including insurance premiums, upkeep of the property, and so on.


As an owner of a strata property you, or your tenants, must comply with the relevant by-laws of the strata building.legal law

These can be changed by a decision of the owners’ corporation or body corporate.

There are similarities with strata by-laws so generally, they cover such elements as safety and security, rubbish disposal, use of the common property, noise control, behaviour or residents, and the appearance of the building.

It’s important to understand that the ownership of pets is contained within strata by-laws.

Living in a strata scheme can present its own complexities, often because of people sharing close quarters as well as using the same common property.

Disputes aren’t uncommon between owners or between owners and the owners’ corporation, however, there are well-defined dispute resolution pathways enshrined in law to assist in these matters if they occur.

Insuranceprotect umbrella portfolio saving money coin insurance rainy day

The owners’ corporation or body corporate is required to ensure the building based on its most recent valuation.

It also insures for injury to ‘voluntary workers’ and against public liability and for workers’ compensation.

The building,  for insurance purposes, may include carpets in common areas, hot water systems, light fittings, toilet bowls, sinks, shower screens, cupboards, doors, and stoves.

As an investor, it’s always recommended to take out landlord insurance to cover potential losses due to non-paying tenants, damage to the property, or public liability for your lot.

Liability for strata contributions

When buying a strata property, the vendor is usually liable for a contribution levied by the owners’ corporation before the date of the contract (except future payments under an installment scheme).

You do run the risk of suffering a liability, such as paying a share of remedying a fault in some part of the common property that occurred in the past before you owned the property, which is why it’s important to inspect and assess the property and the records of the owners’ corporation thoroughly before committing to buy it.

4 things to look for when buying a strata property

1. Owners vs. investors

It’s usually better to have more owners occupiers than investors because they’re more likely to proactively keep the building to its optimum level.

Now that’s not because investors don’t care.

It’s more to do with the fact that investors aren’t onsite and can’t physically see any problems.

One of the other keys to successful strata investment is buying into a smaller complex because they are more desirable to future owner-occupiers who are prepared to pay more for property.

A smaller body corporate also means fewer owners to deal with and fewer owners who need to agree before a decision can be made.

2. A numbers game

In the rush and excitement that goes into buying a unit, many buyers fail to have a professional scrutinise the books and records of the body corporate.

This leaves them clueless about their current finances and unaware of the issues they might be facing.

A bad example might be that as a new owner you will automatically have exposure to major expenses or even lawsuits with neighbours!

The secret is to make sure that you check out the financials before you buy.

3. Repair history

Similar to checking out the books, you must complete a thorough investigation into the history of the building. 45168467_l

Has the building got ongoing problems that are costly to fix?

Will you be landed with a share of the bill to get a new roof within weeks of buying the property?

Most of the new multistorey buildings I’ve been involved with over the past few years have had water issues with their balconies.

While sellers legally have to disclose any material facts about a property, some are actually selling because they don’t want to deal with an ongoing repair problem.

Don’t get lumped with a problem that you can avoid.

It’s as simple as getting a hold of past committee meeting minutes, which can save you thousands of dollars in the long run.

4. Maintenance schedule

It’s an unfortunate fact that many bodies corporate don’t adequately plan for future maintenance.

This can be especially true with older schemes, which means you could inherit a property that hasn’t been adequately maintained over the years.

And that usually means money out of your pocket when the inevitable repairs (that could’ve been prevented!) start cropping up.

As well as assessing committee minutes for major problems, check whether the sinking fund is appropriately financial to undertake a long-term maintenance regime.

The bottom line:  woman property deal

Despite the various issues related to strata and the levies you may need to pay, I’d rather own an apartment in a high-growth inner suburb than a house in a lower growth outer suburb.

As always, it comes back to weighing up all the factors of the property.

A strata property may still be the best investment for you if all the ducks line up.

But as I explained, strata schemes are only as good as the owners within them. apartment

If you have a dormant body corporate that usually spells trouble for the future profitability of the complex.

Like I’ve said, investing in investment-grade units and townhouses can provide capital growth potential and solid yields.

But not if you buy into a scheme that doesn’t even have any money saved for a rainy day or one where the owners don’t seem to care about the upkeep of the building.

Over the last few years, we’ve built too many of the wrong type of apartment – many in high-rise towers aimed at overseas investors.

Smart investors are steering clear of these investor-dominated buildings for many reasons including no likely capital or rental growth for a decade and the scare of poor quality building issues.

However buying older established apartments (those that were previously called flats), villa units, or townhouses, which are located in the right inner and middle-ring suburbs of our capital cities, can make good investment sense.

You may also want to read:

What is a Strata Title property?


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Brett Warren is Director of Metropole Properties Brisbane and uses his 13 plus years property investment experience to advise clients how to grow, protect and pass on their build their wealth through property. Visit: Metropole Brisbane

'What you need to know before buying a strata unit' have 18 comments

    Avatar for Brett Warren

    September 18, 2021 kumar

    Hi Michael. i’m planning to buy a block of units that are strata titled. The current rates are about 1600 per 6 months per unit. Would it suit me better to convert them into a single property as i would manage them myself. Would i save some money by reduction in rates? kindly advise. thanks


      September 18, 2021 Michael Yardney

      Kumar – I can’t see any benefit in consolidating the titles into one unit. In fact there is more flexibility in the banks would prefer you to have multiple units even though you have one owner


    Avatar for Brett Warren

    December 28, 2020 Keith powell

    To buy an apartment in a block is it more expensive per annum due to having to pay council rates and body corp fees than a singular house


      December 28, 2020 Michael Yardney

      that’s not necessarily correct, you have to pay rates etc for the house and the body corporate fees are really for ongoing maintenance and insurance etc which you would also have to pay for a house


    Avatar for Brett Warren

    December 15, 2020 Derek

    Thanks Michael. “Market valuation” here I am referring to bank valuation for a loan if I want to purchase one of the houses, say if the common land (like garden) is 1000 square meters in total, would the bank split the valuation of the common land into 50% for each house?


    Avatar for Brett Warren

    December 15, 2020 Derek Wang

    I am looking at buying a house which has common land (all gardens, driveways, paths) on title with another smaller house, but physically each house has its own garden and driveway on its side, so the common land usage is not shared physically. The plan of subdivision indicates each house (lot) has the same value of entitlements and liabilities (1 and 1), and section 32 document shows owners corporation is inactive. So does it mean each lot entitles to 50% of the common land value in terms of market valuation? And each house can erect something like a deck in its garden without the other house’s approval?


      December 15, 2020 Michael Yardney

      Derek, while you are entitled to erect something like a deck in your own garden, you could not do that over the common land without the other parties permission. You ask about “market valuation”, I’m not sure if you mean the market price or a valuation. The market price is what a willing purchaser will pay with a vendor. A Valuation is what a valuer will place on the property based on comparable sales. The 2 are not always the same, but I assume what you are asking use will the common area add value to your property. It’s a common area is driveways and parts, I assume people would expect this to come with any property..


    Avatar for Brett Warren

    October 1, 2020 Matt

    Hi Michael – great article answers a lot of my dumb questions 🙂 You mention getting the records of the owners corporation before committing to buy a unit. How is this done? Is it a difficult process in your experience?


      October 1, 2020 Michael Yardney

      No it’s not a difficult process and it’s something your buyers agent should do on your behalf – approach the owners corporation manager.


    Avatar for Brett Warren

    February 10, 2020 Neozsita Argarini

    Hi There

    Im in one of these old strata, we dont have any body corporate at the moment my queries is to wether or not I can utilise my right of way which is located right in front of my own garage for visitor car space.
    At the moment the other half of the property own by dept of housing and the tenant seems to mind that I utilise that space with excuse like the path created is not thick enough and may crack if use for regular parking spot.

    Thank you in advance and looking forward for the response.


      February 10, 2020 Michael Yardney

      Unless there is no common land you should have a body corporate. On who’s property is the right of way you mention – that will make a difference


    Avatar for Brett Warren

    May 7, 2019 Jennifer Bowra

    I rented out my strata unit situated in an over 55’s village – the tenant moved in in March 2019. The unit was surrounded by lovely low care gardens and hedges. The unit is managed by a real estate agent. There is an onsite village maintenance manager that also manages rental units and they do the mowing and garden care for which I pay for in Body Corp fees. The tenant in my unit told the village manager (not the real estate manager) she wanted to change the gardens and he helped her rip out ALL the gardens surrounding the unit. I had asked him when I left to leave the gardens as they were but to advise me if the tenant wanted to change anything – he said he would. This manager has since left.. These changes were made in March soon after she moved in and I only found out today, 7 May – the ground around the unit is totally barren now, just dirt, no privacy. Before this it had lovely hedges on the front and side… I am not an investor, I am just having a break from the village and enjoying some time living closer to where my daughter lives. What has been done is just difficult to describe, it looks so awful and I feel has devalued the unit. Its just bare dirt and privacy of the hedges is gone. What can I do about it? I know its common property, but I, as one of the owners, own that common property and feel the village manager at the time had no right to do what he did. What can I do.. I have the RE agent to go there and take pictures and compare to what was there before, and I have also told them I want to be present at the inspection of the unit in two weeks time. How can common property be destroyed like this. Please advise.


      May 7, 2019 Michael Yardney

      I don’t know the rules of the village but the onsite maintenance manager of the village probably has the right to alter the common areas


        Avatar for Brett Warren

        May 7, 2019 Jennifer Bowra

        Yes, but to alter things so very badly? It looks ugly now. The garden was one of the reasons I bought the unit and I feel the way it looks now has devalued my property. Are they not liable to fix this problem? Any person who saw before and after pictures would be horrified. Do you think it would do any good to complain to the Body Corporate?


    Avatar for Brett Warren

    February 26, 2018 Roslyn brown

    We live in a strata unit we would like to make a caravan park on the common ground is this possible


      February 26, 2018 Michael Yardney

      The common area is owned by ALL the owners of the property and it’s unlikely the others would let one owner benefit


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