Buying a Unit

Buying a unit? Find out everything you need to know about your responsibilities as a strata property owner.

We have many years of experience handling strata property conveyancing. 
Strata property means a building that has been divided into ‘lots’. These ‘lots’ might be units within the building, or townhouses within a group of buildings. When you buy a unit, you own your ‘lot’ but share common property with the other owners in the building, including things like driveways, external walls and stairwells. This means that you will need to understand the rules around the common property in the building you are buying into.
 

Our Conveyancing team will take the time to explain your responsibilities under the strata scheme when you are looking to buy a unit. We will walk you through the steps involved in purchasing your strata property, and make sure you are clear about any future expenses such as strata levies.

What are the steps involved in buying a unit?

1. The Contract

We will explain the Contract to you, ask the Vendor’s (Seller’s) solicitor to make any necessary changes and have you sign the Contract.

2. Inspections and reports

Before contracts are exchanged there are a number of things which may need to be attended to. We recommend that the following inspections take place, which we are happy to arrange for you:

 

  • Pest Inspection Report - We recommend that a qualified Pest Inspector thoroughly check the property. This will give you information about any damage such as termite infestation.

  • Building Inspection Report - We recommend that a qualified Building Inspector thoroughly check the property to let you know its structural condition.

  • Inspection of the Strata Roll - This will let you know many important things about the property, including how much the strata levies are, how much money is in the sinking and administrative funds, if there are any special levies coming up, and any other relevant information about the property.

3. Finance

If you are borrowing money to help buy the property, we will need to give your finance provider copies of certain documents. We can contact the person you have been dealing with, in order to avoid unnecessary delays in getting your finance approved.

4. Deposit 

The Normally you will need to pay 10% of the purchase price to the Vendor’s real estate agent before we commit you to buy the strata property. Sometimes an agreement is reached for a smaller deposit to be paid. If you are not able to pay a deposit, please contact our office to discuss the option of paying a deposit by way of a Deposit Bond.

5.Exchange of contracts

Once all of the above matters have been dealt with, we will confirm with you that you are happy to proceed. If you are, we will exchange the Contract signed by you with the Contract signed by the Vendor. Then the property is off the market!

6. Cooling Off Period

You will have 5 working days to ‘cool off’. This means that if you change your mind about buying the unit, you can still back out (as long as you have not agreed to waive your cooling off rights). If you cool off, you will forfeit to the Vendor 0.25% of the purchase price but you will get back the balance of your deposit and be free to walk away from the Contract.

7. Between exchange and settlement

During this period (usually 4 – 6 weeks) we will conduct enquiries into the title of the property you are buying. Several of these enquiries are to Council, the Water Authority and the Strata Manager to ascertain whether or not rates and levies are paid up to date. We will prepare a Transfer and arrange for it to be stamped by the Office of State Revenue before settlement. We will prepare a Notice which will be sent to the Strata Manager following settlement to let them know that you are the new owner of the property. We will also be working with your finance provider (if applicable) to ensure that everything is in order for settlement to take place on the appointed day.

8. The last week before settlement

We will calculate the amount that you owe the Vendor (including a daily adjustment for any rates and levies together with any other agreed allowances) and make arrangements to collect the money from you and your finance provider (if applicable). You will be able to have a final look at the property to make sure everything is in order before we complete your purchase. We will remind you about this as settlement gets closer. You should then contact the agent to make a time to go back to the property for a final inspection. If everything is in order, we will make arrangements for your purchase to be settled. If there are problems with your final inspection that the agent cannot resolve, let us know and we will contact the Vendor’s solicitor to work things out.

9. Settlement

Today is the day you will own your new strata property!
Once we have searched the title one last time, we will attend settlement and ensure that the correct title and transfer documents are handed over. Then we will give the Vendor’s solicitor the balance of money owing on the property. As soon as we return to our office, we will call you to let you know that settlement has taken place. You will then be able to collect the keys from the agent and start moving in!

Need help buying a strata property? call us today

Some common questions about buying strata property:

What is the common property?

This refers to the areas in the building that are owned by the strata scheme. When you buy a strata property you generally own everything inside your unit but not the actual building structure. Common property can include external walls, driveways, gardens, stairwells, roofs, pools, lifts etc. All of the individual owners in a strata property share the responsibility for looking after common property and must abide by the strata rules. The areas that are deemed ‘common property’ vary from one strata scheme to the next, so you will need to familiarise yourself with these when you buy your unit. For example, some may include balcony railings or garage doors.

Will I be allowed to renovate my unit?

That will depend on your building’s by-laws and common property areas. For example, you may be permitted to alter an internal wall but not the four main walls of your unit, as they are common property. You will often be able to make changes to floor coverings and kitchen/bathroom fittings (eg.the bath or bench tops) but you may need to seek specific approval from the owners corporation for certain changes that you wish to make.

What are by-laws?

All of the unit owners in the building will need to follow the rules of the strata scheme, known as the by-laws. For example, a by-law might be that owners cannot keep pets.

What are levies?

These are the fees that each unit owner must pay the Owners Corporation, usually every 3 months. This money is used to cover the maintenance and administration costs of the strata scheme such as the cost of electricity to light stairwells and garage areas. The amount is decided at the Annual General Meeting (AGM), and is based on an estimate of what will be needed to cover expenses for the year

What is a sinking fund?

Some of the levy money is paid into the building’s sinking fund. This is used for future expenses that may not be foreseen. For example, a storm might damage the building’s roof. Money from the sinking fund would be used to pay the repair costs, rather than owners having to suddenly find the extra money to pay for repairs.

Will I get to decide how the Owners Corporation spends money?

Yes. As a unit owner you become part of the Owners Corporation and get to contribute to the decisions and attend meetings.

What should I consider when getting a loan?

Finding a loan (or mortgage) is an important part of buying a property. The property you are buying essentially acts as security for the mortgagee (the lender) so if you fail to make your loan repayments, the mortgagee can sell your unit to pay the debt. When deciding on the loan that best suits you, you need to consider the term of the loan (the length of time you have to repay it), the principal to be borrowed (the amount you are borrowing) and the the amount of interest to be paid. Our team can go over the terms of the loan with you and answer any questions you may have.