What is Strata?
Strata, also known as a strata title, is a form of property ownership commonly used in Australia. It allows individuals to buy ownership of a specific unit or “lot” within a larger property, often referred to as a strata complex. When you own a strata title property, you hold ownership of both your individual lot and a shared interest in common property areas like gardens, parking, and recreational facilities. This shared ownership model is prevalent in various property types, including apartments, units, townhouses, commercial offices, and factory units.
For those new to strata property ownership, strata titles may seem complex, but they provide an organized system for managing property shared among multiple owners. This model, established under the Strata Titles Act, includes specific rights, rules, and obligations that define the relationship between lot owners and their responsibilities toward common property.
What is the definition of Strata
Strata is a type of property ownership model, primarily used in Australia and New Zealand, that allows individuals to own a specific part of a larger property or building (referred to as a “lot”) while sharing ownership of common areas with other lot owners. This model is governed by strata title, which outlines the legal framework for managing the property collectively. In a strata scheme, each owner holds individual ownership of their lot, such as an apartment or townhouse, and has shared responsibilities and rights over common property like gardens, foyers, driveways, and recreational facilities.
The concept of strata title is designed to simplify the ownership and management of properties that have multiple owners, ensuring that shared spaces are maintained and expenses are distributed fairly.
Understanding Strata Title: What Do I Own?
In a strata title, you own your individual lot and a proportional share of the common property within the strata complex. Your ownership is outlined in your certificate of title, which details the boundaries and specifics of your lot. There are two main types of strata schemes under the Strata Titles Act: Built Strata and Survey-Strata.
- Built Strata – Refers to multi-story buildings or other structures subdivided into individual lots. In built strata, ownership is defined within cubic air space, as seen in apartments or high-rise buildings.
- Survey-Strata – Involves dividing a freehold lot into smaller land lots with surveyed boundaries. Typically used for side-by-side housing, survey strata properties may or may not include common property, often resembling non-strata freehold titles.
Each lot within these schemes has boundaries specified in the strata plan, making it important to review these documents to understand your ownership rights fully.
What is Common Property in Strata Title?
Common property in a strata scheme refers to areas shared by all owners, which are not part of any individual lot. These areas, maintained by the Strata Company, might include features such as the building structure, swimming pools, gyms, foyers, lifts, car parks, and gardens. Regular maintenance of these spaces is typically funded through levies paid by each lot owner.
Your share of levies is determined by your unit entitlement, which is outlined on your strata plan.
The responsibility for common property varies depending on the scheme’s by-laws. In some cases, unique regulations may specify which areas require collective maintenance, so reviewing your strata company’s by-laws can clarify any questions about responsibilities.
What is a Strata Company?
The term “Strata Company” in Western Australia encompasses all owners within a strata-titled property. When you purchase a lot, you automatically join the strata company, becoming responsible for maintaining shared spaces and adhering to the Strata Titles Act.
The strata company is responsible for managing common property, collecting insurance, keeping financial records, and maintaining member information. As a member, participating in meetings and voting on issues that affect the property is essential to ensure fair and effective decision-making. Strata companies are different from Strata Management Companies, who, like ESM Strata, are engaged by Strata Companies to support in the day to day running of your strata company.
What is the Council of the Strata Company?
The Council of the Strata Company, previously known as the Council of Owners, functions similarly to a board of directors for a business. Elected at each Annual General Meeting (AGM), the council typically includes between 3 and 7 lot owners who represent the strata company in decision-making. Their responsibilities involve managing work orders, communicating with owners, and liaising with the strata manager to ensure the smooth running of the strata property.
What is a Strata Levy?
Strata levies are mandatory payments made by all lot owners to the strata company. These funds cover expenses for maintaining and managing common property areas, such as building insurance, rubbish removal, electricity, and strata management fees. Levies are agreed upon at a general meeting and calculated based on each owner’s unit entitlement.
The levies collected are deposited into a bank account held by the strata company, ensuring that funds are available for ongoing maintenance and unexpected costs.
Rules in a Strata Scheme
Strata schemes have rules, or by-laws, to promote harmonious living within the property. These by-laws, which vary between schemes, cover everything from pet ownership to noise restrictions, ensuring each owner can enjoy their property without negatively impacting others. Adhering to these rules is essential to maintain order and foster positive relations among residents.
What Does a Strata Manager Do?
A strata manager, like those employed by ESM Strata, assists the council of the strata company with administrative and operational tasks, such as collecting levies, organizing meetings, and providing guidance on strata issues. Although strata management companies charge a fee, they play a critical role in the efficient and effective management of strata properties, allowing the council and owners to focus on other responsibilities.
Do all Strata Companies need to engage a Strata Manager or Strata Management Company?
No, not all strata companies are required to engage a strata manager or strata management company. While strata managers can be highly beneficial in handling the administrative and operational aspects of managing a strata property, such as collecting levies, organizing meetings, and coordinating maintenance, it is not a legal requirement for every strata company to hire one.
In smaller strata schemes, particularly those with few lots, owners may choose to self-manage and take on the responsibilities themselves. However, for larger and more complex strata schemes, engaging a professional strata manager or strata management company can help ensure compliance with strata regulations, simplify property management, and provide expert support in handling financial and legal obligations.
Additional resources for Strata Companies:
Landgate has assembled a number of resources that support strata owners to navigate specific rules and regulations. Find the full list here.
ESM Strata has also compiled a number of resources covering key topics including:
- Council of the Strata Company (roles and responsibilities, nominating members and more)
- By Laws and House rules of Strata Companies
- Levies and Strata – why am I paying Levies and where does the money go?
- 10 year maintenance plans.
For more questions, please don’t hesitate to contact ESM Strata
