Real Estate: Buying and Selling

Unless you live in the middle of nowhere and have few, if any neighbours within shouting distance, it is likely that you will have to interact with other people in your community whenever you set up a home there. If you live in a detached home within a subdivision, then there will typically be a homeowner's association of some kind and they will have several covenants in place that govern each owner or tenant. If you live in a shared building, however, you will be part of what is known as a strata scheme and this has its own rules and potential complications. If you are thinking of moving into an apartment, townhouse or other property affected by such a scheme, how will your voice be heard?

Cast Your Vote

You will be pleased to know that democracy is alive and well in this type of community living environment and you will have the opportunity to cast your vote in any important process. You need to know about resolutions and how they work and whether your input is essential or simply recommended.

Understand Levels of Resolution

Life here revolves around the general meeting, which is called whenever a decision needs to be made. This can cover a wide range of subjects including the appointment of a manager or the determination of a levy. Eligible owners are invited but not required to attend and a straightforward majority will need to be in favour of any motion before it is passed.

If the issue is somewhat more important, however, a special resolution meeting will be called. This involves any significant changes to the bylaws or decisions related to property that is commonly owned within the development. In this case, three quarters of those present (or represented by proxy) must be in favour of the new rule for it to go ahead.

On certain occasions, a resolution may not be passed unless there is unanimous consent. This type of meeting is rare, but usually related to the distribution of excess funds from within the strata scheme "pot."

Owner Weighting

You may think that this works on the basis of one unit, one vote, but this is not necessarily the case. Sometimes, a development will be composed of units that are markedly different in size or characteristic and in this case a weighting system will be introduced. Some of the voters will get an additional share according to the size or value of their larger unit.

Establish Safeguards

Not every owner will attend every meeting and you may wonder whether this is inherently safe. What if only a couple of owners turn up at a meeting and make an important decision by themselves? Usually, this is covered by a rule that dictates a minimum of one quarter of those entitled to vote be present before any decisions are valid.

Read the Report

Now that you know how to be actively involved in your investment, the next step is to get a comprehensive pre purchase strata report, so that you can see what you are buying into.