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3 Things every buyer should know before purchasing a Unit

Buying a unit or townhouse is different to buying a house, as you not only buy the property you also enter a relationship with the other owners in the complex and become involved with a body corporate or owner’s corporation. There are also special Owner’s Corporation Rules to abide by and money which must be paid every quarter (levies) to cover maintenance and administration.

Given the financial investment at stake, it is important to be armed with the best information and advice before purchasing a unit or townhouse. Below are some key issues which you should be aware of when purchasing a unit. For more detailed information, we recommend that you seek advice from one of our property law specialists.

Different ways of owning a unit

The most common way of owning a unit or townhouse is through a strata title. A strata title is a building which has been divided into “lots” in a plan of subdivision. When you buy a lot in a strata title you are buying the airspace in the unit or townhouse. The external walls, the roof and sometimes the floor do not usually belong to the lot owner. In addition, you also buy a share of the ownership of common property with the other lot owners and buy into the rights and obligations of being a member of the owner’s corporation.

Two other less common forms of ownership of a unit include:

  • company title: this involves ownership of shares in a company which owns the land and the building and which entitles you to use of the unit and common property; and
  • community title: community title supports different land uses within one complex (for example, complexes with golf courses and shops) and it works in much the same way as a strata scheme.

What inquiries should be made before buying a unit?

Before purchasing a unit, a search of the records and accounts of the owner’s corporation should be undertaken. This is usually done by a qualified search-provider and can be arranged by your lawyer. A search of the books will provide you with information about:

  • the financial status of the Owner’s Corporation, including:
    • the assets and liabilities;
    • the current administrative and sinking fund amounts which are payable for the unit; and
    • the levies payable for the current financial year;
  • the current insurance policies held by the strata scheme;
  • any pending building works;
  • whether there are proposed special levies being considered; and
  • general information regarding the Owner’s Corporation Rules, any caretaker agreements and any disputes or legal proceedings involving the owner’s corporation.

Other considerations

After information is obtained from the records of the Owner’s Corporation, consideration should be given as to whether there are any issues which may affect your lifestyle or plans for the use of the unit. For example, some questions you might want to consider include:

  • can you afford the quarterly levies?
  • is the annual sinking fund allocation adequate?
  • what are the rules about having other people visiting and parking?
  • are pets permitted?
  • can you store your bike or bicycle?
  • can floor coverings in the unit be changed?
  • what system does the corporation have for solving disputes?
  • what is the access to the property and how secure is the building?


Whilst living in a unit can provide a terrific lifestyle, buying a property can be complex and risky. A specialist property lawyer can provide you with the right advice to enable you to make an informed decision as to whether buying a unit is the right move for you.

If you or someone you know wants more information or needs help or advice, why not book one of our free, 1 hour advice sessions today? Alternatively, you can also call us on 03 9592 3356.


3 Things every buyer should know before purchasing a Unit : City Pacific Lawyers

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