Ep 53. The Dangers of Overlooking By-laws
In this episode, Michelle discusses the importance of understanding strata by-laws.
Here’s what you’ll learn from today’s episode:
Why you need to read the by-laws prior to purchasing.
How reading the by-laws can save you money.
Where to find the by-laws.
What strata can restrict you from doing.
Speakers in today’s episode:
Michelle May - Michelle May Buyers Agents
Follow Us:
Enjoy the show?
Don’t miss an episode, follow via iTunes. If you like it, please leave a review!
Or, find us on the podcast app of your choice, such as Spotify.
This podcast has been produced and edited by Snappystreet Creative
Please note that any views or opinions presented in this podcast are solely those of the speakers, and do not necessarily represent those of any business. These views and opinions are general in nature, and do not take account of your personal objectives, financial situation and needs. Please consider whether it applies in your circumstances and seek professional advice wherever appropriate.
Listen to the Episode Now
VIEW TRANSCRIPT
Hi and welcome to another episode of the Buy Your Side podcast, the property podcast to help you make smarter property buying decisions. My name is Michelle May, and I am the Principal of Michelle May Buyers Agents here in Sydney. We work with owner occupiers, investors, house buyers and apartment buyers, and a big misconception is that buyers’ agents are only for the rich and wealthy. I'm sure that a lot of you would have seen lux listings and all that shenanigans that go on there, and sure there are some buyer’s agents who only work with people who have massive amounts of money. Although even to be a starter in the Sydney market, a first home buyer, you still need a ton of money. A million dollars doesn't hugely buy you a mansion anymore. So, this is the reason I have this podcast, and I'm sure this is the reason why you're still listening to pick up some new tips and tricks on how to become a more efficient and educated property buyer.
Today the episode is all about how by-laws in strata apartments can save you money, or how reading those by-laws before you commit to anything can save you money because I'm always going on about doing your due diligence and in some cases these steps cost you money at every step of the way so to speak. So, I want to give you this tip, because it will help you not commit to spending any more money before you actually know whether this property is the right one for you. When you go through an apartment, they take your name and number, and when you're showing interest, you will ask for a contract. What the agent usually does is they'll send you a copy of the contract or a link to the contract and then they'll also send you a link to the strata report which, more often than not, you have to pay for, it's usually at a discounted price, but it can be anywhere from you know, $29 to $79 to $119 or you may even have to pay the full whack which can be up to $400. Now in saying that, the contract is always free, because you know you need to understand the terms and conditions as to which the property is for sale at. Did you actually know that in the contract you will always have the by-laws. So basically the rules and regulations under which the strata, the people who live in the complex, operates and this is interesting because what a lot of people don't know is that when you're buying into a strata complex there will be things that will be governed, if you like, by the committee and by the majority of the votes that happen during the meeting. I have learned from my years of working with buyers that you can't assume people know things, you don't know what you don't know.
So I once had, for example, a client who wanted to buy an apartment in Redfern and as we were going through the apartment, which was already a two-bedroom apartment, but it had this massive roof terrace, and she started to explain to me why she loved this apartment so much, and it was because she had plans to build an extra third bedroom and an extra bathroom on that roof terrace. I then had to explain to her that the likelihood of that happening was low, and that if nothing else she would actually have to get Strata permission for this to work. She was incredibly surprised, and I don't blame her, you simply don't know these things, that's okay, that's what I'm here to help you with. There's other things for example, did you know that not all strata’s will allow floors other than carpeting. For example, I know of a very big, very popular strata complex here in Alexandria that doesn't actually allow anything but carpets all throughout the apartment, so in the dining, living room, everywhere, whereas we've gotten very used to having hard wood flooring or tiles etc. Other than the kitchen and bathroom, this complex does not allow laminate flooring even with acoustic underflooring. It's simply not allowed.
Other things like air conditioning, most strata complexes will need you to have the engine, I’ve forgotten the technical term of the AC units, those wall hung units, they need to be out of sight on the balcony. But what happens if you don't have a balcony, do they still allow people to install air conditioning? Today I'm sitting here, it’s 35° outside, it's hot, it would be nice to have an AC in your apartment, and if you go through a property and you just assume these things, you could be in for a very rude awakening.
So, a long way to circle back to me saying ‘have a look at the contract’ because the contract is free. You don't have to pay for it like a strata report, in most cases, and so you can have a look at the back of the contract what those by-laws actually state, because every time someone puts in a request to change things like open up the kitchen to the living room for example, or install air conditioning or maybe even have a storage cage in the garaging or the parking and that needs to be recorded and a bylaw has to be created. If you have very specific ideas about what you want to do to this apartment that you've just seen or plan on seeing, then maybe having a browse through the contract before you commit any money to investigating further through a strata report, because, I'm not suggesting do not get the strata report, you definitely need a strata report to understand the financials etc, but have a look through the contract, and if you've already got a solicitor lined up, they may help you with that as well. But you can definitely have a good look yourself, and this also very much goes around the subject of pets right. It's very hard for a strata, I think it's impossible now, to actually disallow pets but they can certainly put parameters around the kind of pet you can have, or even the weight of the pet so they can only allow dogs up to 7 kilos for example, or they could stipulate that you have to carry the pet through all the common areas and in the lift. So, if you have got a Wolfhound or my very dense, twenty-five kilo cattle dog, that's quite hefty to carry through the common areas. So, things like that also will be relevant if you have a pet, or thinking about having a pet that you may want to have a quick dig in the contract.
When you go through open for inspections obviously quite often, the contract will be there on display as well, so you can just have a look whilst you're going through the open for inspection. I thought that might be a handy tip. The more information you can find out without having to spend money and get too emotionally involved before you find out that what you thought was possible is actually not. Have a look in the contract and have a look at the by-laws. I hope that was helpful.
A short episode this time, but you know short and snappy keeps you on the road, and not get distracted by those properties that were never meant to be yours in the first place. So good luck drop me line at hello@buyourside.com.au, and please leave me a review I would really appreciate it Have a great day and until next time.