What is ‘common property’? Investment terms explained

Those looking to buy property, usually under strata title such as an apartment, townhouse or villa, will likely hear the term ‘common property’.

Essentially, common property is a term that applies to sections of the residence that are owned by all the owners of that complex. This can cover many things; the driveway into an apartment block is owned by all the apartment owners, thus making it ‘common property’. This means that the responsibility for that driveway, and its upkeep, is jointly shared among those owners as well.

The section that you own that does not share common property is usually called a ‘lot’.

How do I know what is common property?

New South Wales Land and Planning Information explains that in order to determine what is and isn’t common property, you will need to inspect a copy of the registered strata plan and a current search of the common property title. These can be purchased through the government portal in each state or territory (for instance, Western Australia’s Landgate, which refers to them as Survey-Strata Plans and costs $24). The common property title will alert purchasers to any changes in the by-laws that may affect what is and isn’t common property.

Usually, external walls on the sides of the building are common property, as well as the floor and the roof of the entire complex in some circumstances. They are usually identified with thicker lines on the strata plan.

Within the lot itself, the walls from the paint or wallpaper inwards and the floor coverings and upwards are usually the responsibility of the owner – including the fixtures and fittings and often the internal walls. This may include balconies and courtyards, so it’s worth checking. New South Wales Fair Trading notes that, usually, if the strata plan was registered after 1 July 1974, the balcony doors are usually common property.

Common property also covers hidden things in these areas, such as wiring, pipes and other facilities. This can also cover pruning trees and gardening plants that exist on common property and cleaning common areas. Foyers, fences and lifts are usually common property.

Who looks after common property?

As all the owners have a stake in the common property areas, the responsibility lies with every owner. Maintenance and repairs are, therefore, the responsibility of the owner’s corporation. The safety and appearance of the areas must be maintained unless there is a special resolution not to do so (and the safety and appearance is not greatly affected) – usually this is based around the replacement of certain items.

These decisions are usually made at the general meeting of the owner’s corporation. Changes can be made to the by-laws if an owner wants to add something that will enhance the common property for all owners, explains Fair Trading.

However, these additions will be the responsibility of the lot owner – and a by-law is then created – otherwise it will fall on the plate of the owner’s corporation.  For instance, someone may also want exclusive access to part of a garden. To pass the by-law, 75% of the owner’s corporation or more must agree.

Who pays for the common property maintenance?

While the owner’s corporation is responsible, each owner must contribute to ensure the owner’s corporation can keep repairs, maintenance and upgrades up to date. This is usually the case through your strata levies, also known as body corporate fees.

Levies usually cover administration funds and the sinking fund, which pays for maintenance, insurance, budgeted repairs, emergencies and future capital works on the property.

Ask about the sinking fund plan or the ‘maintenance plan’ prior to buying to see what sort of plans are ahead for covering the maintenance of common property. This will alert you to what is ahead to pay for. If it hasn’t been recently reviewed, or carefully done, it may under-estimate what you will need to pay.

Special levies are sometimes used to cover common property, particularly in the case of upgrades. This could be re-carpeting or new paint, or even larger upgrades depending on the wishes of other owners. This is an additional cost, on top of your current strata fees, that may not be welcomed by all owners.

A special levy is often discussed if the sinking fund is not adequate to cover either necessary repairs, due to poor forecasting of maintenance, unexpected costs, or to cover new upgrades. Look into strata meeting details to get an understanding of what may be coming up.

To find these details it is often worth purchasing a strata report, which includes what the current levies are, any special levies, defects and repairs that have been made and plans of the owner’s corporation. For these reasons, professional pre-purchase strata inspectors can be useful.