It doesn’t take much to make an experienced conveyancer twitch with anxiety and one of the triggers is positive headlines about particular types of real estate booming.
In a recent Advertiser article, New data shows South Australian units and apartments are the way to go, it was reported that units in Adelaide had year-on-year capital growth of 4.5 per cent, ahead of houses which only grew 2.9 per cent.
Furthermore, the quoted Core Logic RP Data home value index results showed units in Adelaide grew in value by 3 per cent while house values fell 1.5 per cent.
I’m expecting this will make many of us consider investing in apartments or townhouses and if this is unfamiliar territory for you, I’ve pulled together some points to consider before you rush in.
We’re all in this together: Understanding strata and community titles
Perhaps the most foreign thing for first time apartment buyers in South Australia, is the strata and community title systems.
Strata and community title divisions divide land into strata units or community lots and common areas.
Basically strata units or community lots are owned by individuals and common areas are owned equally by all owners in the group.
As an owner of a strata unit or community lot, you will automatically become a member of the ‘strata or community corporation’ for that property. This is the body that does maintenance for common areas and oversees administration.
You will have to pay fees to the strata or community corporation each year, typically called the administrative fund and the sinking fund.
From the perspective of our clients, we believe it is crucial that you understand the boundaries for common areas and the various restrictions placed upon your unit or lot and future tenants.
Apartment conveyancing demands extra attention to detail
Your conveyancer should be able to prepare you for buying a strata unit or community lot by demystifying common elements that can be costly if overlooked.
The first step is confirming the type of title, I have written before that in South Australia you might still come across property sold under Moiety Title.
For example, strata inspection reports can be critical to ensure all things are in order with the strata corporation and that no illegal work has taken place in the unit or common areas.
We can also summarise the by-laws or ‘lifestyle restrictions’ set out by the community corporation so you understand where you can and cannot park cars, dry clothes, etc.
Thinking more broadly, a conveyancer can let you know what interests are vested in your land relating to councils, water, roads, and, in the case of waterside allotments, marinas, because these will all impact future value.
As with all major investments like real estate, there is a lot at stake and it pays to trusted advisors around you to minimise risks and maximise returns.
And our way of helping you achieve those ends is to keep you well informed and keep the transferring processes running smoothly.