Owning a real estate property is a huge responsibility. On top of making sure you pay your taxes and dues, you also have to ensure your home’s maintenance, especially when you decide to rent out your property for added income.
Recently, strata management has become more popular for real estate owners. It is commonly popular in Australia and Singapore, but it has begun to spread in some communities around the world. Here’s what you need to know about it, and why it’s only wise to seek help from property management professionals. These companies can be a big help, even in general administrative tasks.
What is a strata?
A strata scheme or strata title is a real estate concept where a property owner only has partial ownership of a certain property.
To make it simpler, imagine a house with two bedrooms. In a co-ownership, Mr. A and Mr. B both own the entire house. This means Mr. A and Mr. B have the legal right to enter all the rooms in the house. If they want their own private rooms, then they can agree which rooms are off-limits to the other, but ultimately the whole house is theirs.
Now, imagine the same two-bedroom house, but Mr. A and Mr. B purchased one room of the house on a strata title. This means the room Mr. A owns does not belong to Mr. B, and vice versa. Thus, Mr. B has no right to enter or do anything to Mr. A’s bedroom, and vice versa. As for the kitchen, living room, bathrooms, and yard, these jointly belong to both, so it’s both their responsibilities to do upkeep and maintenance.
If this sounds like the system in a condominium, townhouse, or apartment building, that’s because it’s the same concept. There is only part ownership for the person who bought the condominium unit. But buying the unit also gives them rights like the right to use the elevators, the right to use their parking spot, and the right to demand other owners minimize noise and litter.
What Strata owners can (and can’t) do
Strata titles are basically buying into a community. Not only does a property title buy you the unit itself, but the shared amenities as well. But just because it is shared does not mean you can do with it as you please, and you also have to give courtesy to the other property owners. This includes:
- Parking only in your parking spot
- Cleaning up after yourself, your household members, and your pets
- Adhering to the policies of the public spaces established by the owners’ corporation
- Not damaging public spaces
To make sure everyone is following the rules, strata properties often have a strata manager in place. This is either a person or an organization that oversees the day-to-day management of strata properties to ensure everyone is doing their part and keeping to the rules of the strata title.
How important is a strata title?
For starters, strata management is part of property management. It involves the daily management of jointly-owned property. These properties include both residential and commercial establishment with many units.
It may be a commercial building, apartment complex, or a condominium. It also includes facilities such as vehicle parking and security among a few.
Property owners should have a strata title. It gives you, the owner, control over the property. Likewise, you have the privilege to transfer the co-owned property to interested parties.
The strata title also gives tenants the privilege to create a Management Corporation. This covers the maintenance and management aspects of the said property. Other reasons why strata titles are important include:
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It serves as your proof of property ownership.
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You will need it in case you decide to sell the property. You won’t have to pay extra fees to the developer in the event of a property sale.
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If you don’t have it, the property technically belongs to the developer. This means you don’t have control of the property.
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In case you plan to sell the property, you have to pay consent fee and stamp duty to the developers.
A Strata Manager’s role
Property Managers and Strata Managers are often interchanged. But these two are different. The former handles the management of individual properties. They take over the responsibility of the owner, such as general administrative tasks.
Meanwhile, the latter is responsible in managing multiple properties. This includes apartment complexes, condominium, and flats among a few. Strata Managers also take care of insurance and legal aspects of property ownership. They also assist residents with any concerns and disputes within the property.
Administrative tasks
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Records management – archiving of owner’s information details and other property-related activities
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Insurance management – this includes claiming insurance and following up their status
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Tenant management – communicating with the residents through meetings and other property concerns raised
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Property maintenance – ensures the maintenance of the property and its facilities. This includes taking over repair, repaints, and general cleanings among a few.
Financial management
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Budget preparation as part of the repair and maintenance needed in the property. It will be subjected for approval by the developer
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Invoice monitoring
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Insurance filing and management
Tenant management
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Constant communication with all tenants for any concerns
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Ensure that rules and regulations are being followed
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Mediate on disputes and other issues involving tenants
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Conduct meetings and social events. This will give tenants the chance to share feedback for the betterment of the property.
Strata Manager vs. Property Managers
Property managers act on behalf of a property owner. Going back to Mr. A and Mr. B, let’s say they co-own the two-bedroom house which they decide to rent out to a family. Because they like the income of their property but not the duties that come with being a landlord, they pay a property manager to serve in their stead to collect rent, handle repairs, and deal with the minor complaints from their renters or the neighbors.
While property managers answer to one property owner and deal with multiple tenants, strata managers deal with multiple owners in one property. While a strata maintains a strata property, they cannot represent the strata owners collectively. They are simply there to ensure everyone is satisfied with the shared properties and there are no conflicts between the owners, but otherwise all the major real estate decisions go to the property manager or the property owners.
Like Property Managers, Strata Managers also carry a huge responsibility in managing a property. More so if properties like apartments and condominiums are very common in the area. Nonetheless, they can make your life easier and more manageable as a tenant.
