What is a Resident’s Association?
SM Property

January 12, 2023

Townhouses are a great long-term investment, especially with a Residents Association (RA) in place. It’s set up in advance to manage the future maintenance of the common areas. 

Residents Association normally covers:

  • The long- term maintenance of the driveway, also known as the COAL or JOAL (common/Jointly owned access lot)
  • Management of shared lighting or Stormwater systems
  • General Governance of the by-laws (ensures your asset’s value is protected)
  • The by-laws cover the expected behaviours and up keep of the neighbourhood
  • Management of a group Insurance policy
  • Management of the waste collection
  • Maintenance of the shared landscaping area
Insurance and General Maintenance

Normally the RA covers insurance for your home. Typically, a policy is sourced that covers the properties, common areas, and shared facilities. Obtaining a group policy significantly reduces the insurers’ risk and lower premiums.

The RA maintains shared facilities or common areas like the driveway, pedestrian walkways, and shared parking. Funds are set aside to ensure common areas are properly maintained and repaired accordingly.

How does a Residents Association Work?

It’s set up by a set of bylaws and an annual budget. Someone gets selected to operate and manage the RA services, which makes life easy for you as the owner. 

As an owner, you need to become a member of the RA. You’ll have the ability to suggest and implement changes. Assuming the suggestion is agreed upon by other owners, those suggestions and changes can be implemented. The RA can determines who manages the RA services on a yearly basis.

Who manages the Resident Society, and do I need to join?

Each developer organises a manager for the development. If the development has a resident’s society, you must join the Resident’s Society. The terms and conditions are included in your sales and purchase agreement. Any future buyers of the property also need to join.

How much is the Resident Association fee? Is it the same for everyone?

The fee is you’ll pay is unique to each development. It’s determined by factors such as common areas, infrastructure (grounds/lights), and property insurance costs.

The price you pay depends on the size of your townhouse and the right of use. This means that not everyone will pay the same amount in the same development. The sales and purchase agreement will provide exact figures. You can ask your sales agent for the costs in advance.

Does the Resident Association provide insurance coverage?

The Resident Society generally procures insurance coverage for the entire development to safeguard against natural disasters or fire. This means residents are relieved of the responsibility of obtaining or paying for their own house insurance policy. Contents insurance is still something to obtain separately because personal belongings aren’t covered by the Residents Association insurance policies (unless otherwise stated).

Obtaining insurance through the Resident Association is significantly more affordable than procuring your own policy.

Does it cover my rates?

In terms of rates, it’s important to note that as a freehold owner, you’ll be responsible for paying your own rates. If the access lot is subdivided as a standalone lot, the Resident’s Association normally includes a rates component in its budget.

Can I change the colour of my house?

When changing the external appearance of your townhouse, you’ll need consent from the Residents Association. Your Residents Association Agreement includes information regarding these matters. It’s always a good idea to review this document thoroughly to avoid any potential issues down the line.

Residents Associations are a great way to manage your home or investment property in a development. If you’re looking for more tips and tricks on property, make sure to check out our other blogs, or our Instagram. If you’re ready to start your property journey, chat with the SM Property team.

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