The Victorian government has recently announced a scheme to assist aspiring homeowners around Victoria

Suppose you are a purchaser of a residential property in Australia that is part of an Owner’s corporation or body corporate or strata scheme (typically apartments and units with multiple houses). In that case, care must be taken to understand the contract terms and your responsibilities as the lot owner. The contract of sale usually includes the Body Corporate rules, and the plan indicates the extent of the lot owners’ boundaries and the common properties related to the property.

Cost: Regular payments will be required to be paid by the Lot owners by the body corporate, which includes and is not limited to, Body corporate management fee, maintenance fund to maintain the common property, special levies, insurance, etc.

Boundary: The physical boundary of the property, unless defined otherwise by the strata plan, is the inner face of the property. For instance, a reference to the ceiling or roof means the boundary is the under surface of the ceiling. A reference to the floor means the upper surface of the floor. The internal surface of the wall remains the property of the owner. The Windows and doors form part of the property if the window and door serve the owner’s property.

Common Property: All areas marked in the strata plan that is not an owner’s area are the common property. For instance: the walls space used for the utilities of the building is common property. The qualifying factor would be whether the space services multiple owners or a single owner. Any significant alteration or upgrade to the common property requires a special resolution by the body corporate.

Defect and damages: The usual contention with a property containing strata title is to address who bears the cost of improvements, maintenance or repair of any damage or defect. In General, costs follow the ownership. So, the defect and damages caused by the common property are borne by the body corporate, and the lot owner accepts the fault and damage caused by their property.

Water on common Property: Any rainwater or other water that falls, occurs, or flows on the common property is taken as part of the common property. So, it is vital to establish what forms common property. However, where there is a water leak between an external wall and a door to a private balcony that serves one property, the owner may be liable to rectify the water leak.

Maintenance: Lot owners must not maintain or repair the common property. The lots must be properly maintained to ensure the outward appearance or state of repair is not adversely affected. The maintenance of the lot must also consider the use and enjoyment of lots or the common property by other lot owners.

Unless the purchaser of the property with strata title is aware of the various responsibilities under the contract, it could cost them much more than anticipated. A property lawyer could review the agreement to highlight the key provisions and obligations. The purchaser’s responsibility is to undertake due diligence before signing the contract.

Disclaimer: This article is for information purposes only and should not be taken as legal advice, please contact us for specific legal advice in your situation. We do not accept any liability to any person for the information or advice (or the use of such information or advice) provided.

Prepared by Vinu Kumar, 12 May 2022.