3 reasons the new strata laws are a win for home buyers
From November 30, more than 90 changes to strata law are going to come into play for New South Wales. While that sounds like it might be stressful if you're buying a house, the vast majority of these strata title changes are actually going to make things easier - for both buyers and developers. Here are three big shifts that you should be able to benefit from.
1) You can make improvements and additions with ease
Making renovations and additions is great for adding value to a property, as well as boosting its positive cashflow potential. Under current strata laws, however, it can be a struggle to get these renovations underway for your property, as you require approval of a vast majority of your owners' corporation.
As of November 30, anything you do with significant impact on your strata (NSW Fair Trading's example is installing new floorboards) will only require the approval of 50 per cent of the vote. If you are making any renovations that will change how the exterior of the property looks, you will need 75 per cent of the vote.
Best of all, minor cosmetic adjustments will be able to occur with no restrictions. It gives you more freedom to personalise, add value to, or simply fix up your strata property.
2) More bang for your buck at point of sale
Under this strata law change, owners in a development will be able to come together to wind up a scheme, giving them more collective sale or renewal power. When these units or houses are put up for sale, the reforms dictate that you will get at least the market value for your real estate, as well as a bonus to cover moving costs and the like.
If 75 per cent of owners agree to sell a block, then it will go ahead.
If 75 per cent of owners agree to sell a block, then it will go ahead. As zoning change for increased density in the city, there are likely to be more developers buying blocks of strata - a prime opportunity for this collective sale to take place.
If you're looking to get out of an apartment and into a luxury house in the eastern suburbs, or simply like the idea of pocketing as much as 30 per cent more than you paid for your strata, these reforms give you the chance to do it.
3) Protection of the maintenance of your strata title
This strata law will take a little longer to come into effect, but has strong benefits for owners. Developers will have to put up a bond of 2 per cent of the total block's construction cost, which covers any defective work.
A final report on defects and the building's condition has to be provided between 21 and 24 months after construction is completed, and owners get a say in who conducts this independent inspection. If poor work is discovered, the 2 per cent bond is used to cover the work.
Under this reform, house hunters that invest in a strata scheme only to find it is sub-standard will be afforded extra protection.
The NSW Government has delivered wholesale changes to how strata works, and the benefits are clear for both investors and owner-occupiers. More autonomy, more value and more protections are all excellent things to see come into play.
Of course, that still leaves the question of where exactly you would buy your strata - or where you'd go after a collective sale. To spend your money wisely and get the best out of the Sydney market, make sure to use a professional buyers' agent.