While Australia is one of the most sparsely populated countries (by landmass) on Earth, anyone who lives in the densely populated coastal areas may find that difficult to believe. In these locations, space can be at a premium and it's hardly surprising that more and more high-rise buildings are being constructed in the major cities. This means that a number of different owners may retain property within the same building and this requires a special type of management and ownership structure to be in place. How is this handled and what should you consider if you're getting involved in this type of situation for the first time?
Each individual owner will become part of a special legal entity, known as an "owner's corporation." This will enable them to get part of a strata title, which determines how parts of a common property are divided into individual lots. This will permit each owner to share the ownership of the actual building itself and parts of the property that are needed in order to join everything together. This could include driveways, hallways, gardens, lifts and garages.
While each individual will have complete control over the apartment, townhouse or unit within which they plan to live (or rent out), they will have a collective control over the maintenance of the actual building itself and the common areas.
This type of approach is not restricted to residential developments, as it is also found within commercial properties such as an office building, or a retail development such as shopping mall. In all cases, however, it's usual for the owner's corporation to collectively appoint a management company to work on their behalf on a daily basis.
Why It's Important to Be Proactive
It is, of course, in the best interest of each individual owner to be proactive when it comes to their input into the development of the owner's corporation. At the very least, they should attend each annual general meeting, where important decisions will be made about the future. They must ensure that the appointed managers keep up with their legislative and administrative duties carefully and maintain all the records necessary. This will help ensure that the value they have invested in their unit is maintained, as future buyers will look very carefully at the strata records before they consider their own investment into the property.
Making Your Own Decision
Before you consider buying your first apartment in a high-rise development, have a good look at the records of the owner's corporation, to determine whether it would be a sensible investment for you.