One of the most overlooked aspects of buying an apartment or townhouse is the owners corporation. When you purchase a shared-title property, such as strata title, you also buy in to the community of owners (still known in some states as the body corporate).
This is the legal body that sets and controls most of the rules about owning and living in the property you have purchased.
As an owner, you automatically become a member of the corporation and must adhere to the rules it sets or risk legal action. Increasingly, however, we are receiving reports of very troubled and often very expensive owners corporations.
Costs appear to be soaring with very little transparency or explanation to owners — especially in large tower developments. New owners are also reporting complicated and long term management and service agreements imbedded in to the rules and often inserted by the developer or associates with very little benefit to the eventual owners.
While our preference in property assets is for traditional housing, we also see value in carefully selected older or period style apartments and some townhouses. When it comes to these purchases, however, careful due diligence must be made to the owners corporation — not just for its existing rules, costs and agreements but also for the ability to change these rules and escalating costs, if necessary.
Until next time,