You’re about to buy a commercial property for your business or as an investment – but just you’ve spotted a reference to strata title. So what should you consider before buying?
Firstly, what does ‘strata title’ mean in the commercial sector?
When you purchase a commercial unit that holds a strata title, it means that you or your business will own your own unit but share ownership and responsibility for common property with other owners. Common property might include parking areas, building exteriors or other shared amenities.
Each owner pays regular strata levies to cover general management and maintenance of common property. The strata scheme can have certain by-laws that shape the way the building is used and maintained, and may enlist the services of a professional property manager to help manage property, meetings, levy payments and more.
What are the advantages of commercial strata property?
Strata titles can provide a vast range of benefits for commercial property owners. You can gain access to great amenities without paying for them completely yourself, therefore accessing a cost-effective way to invest in commercial property. You can also benefit from the shared attraction of multiple businesses in the area, as customers appreciate the convenience of a shopping complex. Some mixed-use strata properties will also include residential units, so you could potentially have some customers ‘built right in’ for your business. However, it’s worth considering a few key things before making that final decision.
- How well is the strata scheme being managed?
This can make or break the advantages of buying a commercial strata title. Commercial strata management can be complex in terms of compliance and insurance, and you’ll want to be sure the commercial strata management team is up to scratch so you’ll have peace of mind. If shared property is looking run down or if strata levies seem particularly high or particularly low, pay attention and consider asking other owners at the property what their experience has been.
- What kind of condition is the common property in?
The commercial unit itself might look brand new, but how does the carpark and entryway look? While you’ll be wholly responsible for your new unit, you’ll also be partially responsible for shared property too. If the strata scheme is well managed, a proactive strata manager will be looking ahead to any expected major capital works and planning appropriately to keep strata levies reasonable in the long term.
- Could the strata title determine my use of the property, and if so, how?
Strata by-laws can be put in place if 75% or more of owners agree to them at a general meeting. Depending on the strata property, by-laws could potentially influence aspects such as business signage, parking spaces and property upgrades. While strata by-laws must be reasonable and you’ll have your say as an owner, it’s important to request and review these by-laws before purchasing to ensure they’re aligned with your plans for the property
Remember, a commercial strata property can provide excellent value with great strata management. Jamesons provides professional and forward-focused commercial property strata management in Sydney and throughout NSW. Read more about our services, or contact us today.