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What you need to know before investing in an apartment or townhouse

The landscape of home ownership is evolving, with an increasing number of Victorians choosing to downsize and opt for living in compact, convenient spaces.

This guide delves into the essentials of buying a townhouse, apartment, or unit, offering insights to help you navigate the intricacies involved.

Being aware of ownership differences

Many units, flats, and townhouses are adjoined or part of a complex. So, when comparing the ownership of smaller dwellings to standalone houses, a significant difference lies in the shared communal features. These can include gardens, driveways, and even walls. This shared ownership model introduces a layer of complexity regarding legal boundaries and responsibilities.

When you're looking to buy, it's crucial to understand that owning part of a building or complex comes with a responsibility for the maintenance and use of shared spaces. A property lawyer can review any features of your shared property and check if there is a common property on the subdivision plan. They'll also look at whether the lot entitlement and liabilities are shown appropriately apportioned for each property.

Navigating disputes over shared spaces

The close living arrangements in apartments and townhouses can foster a strong sense of community but also have the potential for conflict. Noise complaints, parking disputes, and differing views on property maintenance are common issues that can strain relationships with your neighbours. Before committing to a purchase, you should consider the social environment as much as the physical features of the property. Meeting with future neighbours and understanding the communal dynamics can provide valuable insights into what life will be like.

When disputes over shared space do occur, engaging with a property lawyer early in the process can provide clarity and guidance, ensuring that you're fully informed about your rights and obligations.

Buying into strata schemes

If you're considering buying an apartment, then there's a high chance your property will be part of a strata scheme. This may include extra costs, such as levies, and extra responsibilities, like attending general meetings and participating in decisions affecting the communal living environment.

What can make ownership and living in an apartment even more complicated is the set of by-laws associated with the apartment block. In some cases, these laws can be very restrictive on day-to-day use or affect your ability to renovate the property. That’s why understanding these by-laws before purchasing is essential.

Understanding owners corporations

An owners corporation (previously known as a body corporate) is responsible for managing common property. Membership is typically automatic for property owners within the development, and each member may be required to contribute to the costs associated with these common areas through fees or levies.

You should carefully investigate the rules of the owners corporation, as they can impose restrictions that affect your use and enjoyment of the property. Also, look into any legal proceedings if the owners corporation is suing a member, developer, builder, or neighbour and why.

Reviewing facility and maintenance responsibilities

The allure of an apartment or townhouse often comes with the benefit of shared facilities, such as gardens, pools, and fitness centres. However, these amenities also come with shared responsibilities for maintenance and upkeep, which can be a source of confusion and conflict among residents.

Before purchasing, it's important to thoroughly review the property's Contract of Sale and Section 32 statement, which should detail the shared facilities and maintenance obligations.

Understanding how the maintenance of these facilities is managed and funded is crucial, as it can impact your financial responsibilities as part of the owners corporation fees. It is also worth looking into whether the owners corporation has complied with its obligations to insure the common property.

Your pre-purchase checklist for buying an apartment or townhouse

Our expert property lawyers have put together the following checklist to ensure a thorough review before buying a townhouse, unit, or apartment:

  • Review the contract
  • Get expert legal advice
  • Research the market
  • Plan budgets and funding
  • Confirm rates, taxes, and government charges
  • Inspect the property and surrounding area
  • Look into zoning and town planning
  • Measure the land
  • Document all promises in writing
  • Ensure fixtures and chattels are listed
  • Check for any restrictions or easements
  • Verify compliance on any building work
  • Check builder’s warranties
  • Understand settlement terms.

While buying a townhouse or apartment in Victoria offers many benefits, it also comes with a unique set of responsibilities that require careful consideration and legal guidance. By understanding the nuances of shared property ownership, engaging with neighbours, and thoroughly reviewing all legal and communal obligations, you can make well-informed decisions.

Please note: The information covered in this guide is general and should never be substituted for professional legal advice. Contact us for further information.