Hi Folks,
I am seeking some advice on what the process is for strata titling 3 freestanding units/villas that I own that currently sit on a single title. there are only these 3 units on the title.
Why do I want to strata title?
Create additional equity that I can borrow against for growing my portfolio.
I estimate that the bank valuations for separating / strata titling the 3 units will create $100k-180k equity.
What actions have I undertaken so far?
1. Queried my mortgage broker about my current lender loan change processes, timeframes and if/how/when they will recognise the additional value once the strata title is complete.
2. Contacted multiple local REA's to get market appraisals and any information they can share about the process and costs in the area.
3. My own independent review
4. Review of the Local Council and Subdivision processes to get an understanding.
5. The villas do not appear to require any additional works to bring them into compliance for strata titling. E.g. No common walls, separate electricity/water. But I would like to pay the right expert to review all this for me and provide an estimate of any costs. I am not sure who this expert would be.
What do I know about current costs? (I would like to refine these to determine if the strata activity is even worth doing)
1. 1xREA advised $20k for the Surveyor/Council/Legals. Assuming no additional works required to bring into compliance.
2. Total of $5.5k-7k based on a few posts I have seen on this site and a couple of others.Core questions;1. What is the process to do this?2. What are the typical costs for a small strata like this? (Assuming no compliant works required)
3. Who are the expert consultants I can pay to help me through this process? Recommendations of individuals and firms are welcomed.
Any help greatly appreciated.
Thanks,
Emptyvessel
No takers? I am genuinely surprised.
EV
Reason no one has answered to date is that it will vary from State to State and Council to Council.
In essence once the surveyor has prepared the plan of subdivision and lodged this with the Local Council you will receive confirmation that the subdivision can proceed and then your Solicitor will lodge this with the Dept for Natural Resources.
You will need the lenders consent and this will need to be lodged at the time of registration.
Along the way you might be up for contributions, professional fees and additional Rates etc.
Assuming everything in regards to the Building is ok you should have too many conditions imposed.
Cost wise cant comment as i havent a clue where the project is based.
All in all it is a fairly easy process.
Cheers
Yours in Finance
Your Broker should be able to give you some further
Richard Taylor | Australia's leading private lender
Emptyvessel,
In most cases this is a town planning issue, and a town planning permit (or DA in the Sydney vernacular) will most likely be required. Given that the built form already exists there should be no affect on the amenity of any stakeholder and so this should not be a difficult application. Assuming this application is successful then the properties need to be formally subdivided into new titles through the creation of a proposed plan of subdivision which can then be certified and in turn registered with the titles office.
I don't work in Sydney, so some of the terminology may be a bit NQR, but planning theory is pretty much the same in all states and territories. Of course, wherever there are councils involved there will be fees to pay, so it might do you well to see if you can ascertain just how deep these might run.
Another minor consideration is rates and other expenses for each property after subdivision is completed.
Emptyvessel
– If you are looking at doing a Strata title check your council for section 64 and 94 contributions, with strata title they can amount to $10000 per dwelling/unit for (section 94) – sewer/water, section 64 contributions may be a % of the cost of the project. These are for NSW but check you local council, these are paid on approval.
– Have a building consultant check fire rating and party walls comply. If no masonry party walls fire rated plasterboard or similar will be required. A minimum of 900mm may apply
– There may be a minimum area size per unit/villa say around 250 to 300m² for a subdivision .
– Common areas also come into play.
– Consult your council first before you star forking out money for consultants.
Thanks folks, your info has helped me greatly.
I spoke to the planning and development folks at the council yesterday. They couldn't be more helpful. They checked the past DA's on my property and found that almost everything needed for the strata (or torrens, if I had 50m2 more land). The cost for the remaining council approvals is $500-1000 in total. So fairly minimal. They even called me back to correct some advice they had given incorrectly the first time, without me prompting. Impressive customer service, for a local council IMO.
They confirmed that it is best I get some quotes from a few local surveyors to draw up the plans and assist with the submission. They live and breathe this stuff, so it should be easy.
A friend suggested that I may incur some additional stamp duty costs from the NSW OSR / LPMA during the process of strata titling. The council folks weren't sure about this and suggested the surveyors should be able to give an idea. My other avenue is to talk to the NSW OSR / LPMA and ask them directly. I would like to know if I might be up for a big chunk of state duties cash in this scenario. If anyone has thoughts about this, please do share.
I will keep you posted on my progress. Thanks again for the advice.
Folks,
does anyone know if it is mandatory for me to set up a Body Corporate and Strata Plan with by-laws? Even when I own all three units on the block?I spoke to a strata management company that advised me this was necessary and also required careful thought. Right down to the rules I want to set for "No solar hot water systems can be installed", "Change Colour of building must be approved by the body corporate", "1 Toy dog or up to 2 cats is ok. anything more is not"….that kind of stuff.
This is all rather complex for something I think should be simple. The villas share a parking spot, part of a driveway, sewer easement, water access (3 separate meters) and a fence or two. That's it. I don't understand exactly what I need to do to cover this part of it. The rest seems easy (surveyor plans, DA, bank title change etc).
Any advice appreciated,
EVDid you get it done in the end?
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