Neighbour running a business on strata block

Discussion in 'What to buy' started by Spence34, 31st Dec, 2020.

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  1. Spence34

    Spence34 Member

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    Hi,

    We are new to looking at townhouses so still trying to understand how strata titles work. When I googled the address of a townhouse we are interested in, it looks like the neighbour on the same block has two businesses registered to their residential address. It also looks like their house has a side entrance with the office name printed on the door.

    Is there anything we should be aware of with a scenario like this? Does it affect the value of the property and the strata fees?

    Thanks for any advice!
     
  2. Spence34

    Spence34 Member

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    To add, I just realised that the townhouse we are interested in also has a business registered to it. Explains why the ground floor bedrooms have doors leading to the front yard! Had found this feature very puzzling initially. Any advice on buying a townhouse that used to be a business will be much appreciated, thank you.
     
  3. thatbum

    thatbum Well-Known Member

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    It's not really a strata thing is it? Although maybe there's some strata bylaws that concern the commercial use.

    More of a planning thing.
     
  4. skater

    skater Well-Known Member

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    Having a business registered at an address does not mean the business actually operates at that address. My business is registered at my accountant's address.

    I really don't understand the concern, unless the neighbour has a business that affects the block, like, maybe he's a mechanic & has all his customers parking in the complex and makes a lot of noise.

    There's lots of different types of businesses that operate out of a residence, and you'd have no idea it's happening, unless they told you.
     
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  5. Spence34

    Spence34 Member

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    Thank you both.

    I'm asking for advice as I don't know enough to know whether it is a concern. So it's good to know others don't think it's an issue. If it was a house on land I wouldn't think twice. Just seems "closer to home" as it's part of a strata, and with having multiple people come through next to where my young children will be playing in our courtyard. It's possible they run the business there as there are multiple business signs and separate entrances.

    I was also wondering whether it affects strata fees like insurance.
     
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    what if a customer to that business is injured? A slip n fall case?
     
  7. skater

    skater Well-Known Member

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    It shouldn't affect fees or insurance, however not all businesses have people coming through, while some have many. We've got an online Business. We do get the odd customer come in, but it's more like once or twice a month, not a continual stream.
     
  8. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    It would affect them from a tax perspective, but generally not the value of the property. You would hope and assume that the strata by-laws allow for the business to be run from there (although possibly they aren't able to restrict this?) and their insurance would be their problem from a content PoV. I doubt it would affect anything from the building insurance PoV which is paid for via strata levies for the complex.

    Not really a concern on my part, save for lifestyle considerations (what kind of business, foot traffic, noise, etc). Plenty of homes run hair salons from their garage for example.

    - Andrew
     
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  9. Spence34

    Spence34 Member

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  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    If some customer is injured they could sue the body corporate and their insurance would not cover it. that would mean the strata scheme is liable. The strata scheme can't be liquidated but an administrator could come in and then raise special levies forcing all strata members to pay for it. The strata might be able to sue the strata lot owner that was running the business but if they knew about it and did nothing that would imply consent.

    I think strata property best avoided because you lose control to a certain extent.
     
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  11. Spence34

    Spence34 Member

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    Yes that's not our preference too but it might be the only way to afford the area we are looking at, unfortunately. I think the points you raised are important, thank you. It's unlikely but still a possibility, and I think we will steer clear of this property in particular.
     
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  12. craigc

    craigc Well-Known Member

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    Perhaps also best do a basic google search for the business for more info.
    Also ask another neighbour in the potential complex for the low-down of that or any other issues.

    If it’s a business with @datto ’s Mt Druitt associates selling & purchasing ‘herbs’ at all times or perhaps one with a red light over the door - agree best avoid.
    Although I would assume they are less likely to be registered as a legit business.
     
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  13. Spence34

    Spence34 Member

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    Haha! They actually did have a number of neon signs! It's a newish company so couldn't find reviews but it looks like they provide loans. There were a number of other issues with the property so not going ahead. The search continues!
     
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  14. datto

    datto Well-Known Member

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    Spence if you give me the address I'll check to see if it is associated with anyone up here. But I'd be surprised we run that far south.;)
     
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