What is a strata and how does it work?
In Australia, the term “strata” refers to a type of property ownership and management arrangement that is governed by legislation known as strata or body corporate laws. It is commonly used for residential and commercial buildings with multiple units, such as apartments, townhouses, or office complexes.
Under strata legislation, individual units within a building are privately owned, while certain areas like common areas, shared facilities, and infrastructure are jointly owned by all unit owners. This shared ownership is managed by a body corporate or owners corporation, which consists of all unit owners.
The body corporate is responsible for making decisions related to the maintenance, repair, and management of common property. It also handles financial matters, insurance, dispute resolution, and enforcement of bylaws that govern the conduct of unit owners and residents.
Unit owners pay regular levies or fees to the corporate body to cover the costs associated with the shared property, such as maintenance, repairs, utilities, and administration.
Strata laws aim to provide a framework for efficient management, dispute resolution, and community living within strata-titled properties, ensuring the rights and responsibilities of all stakeholders are upheld.
What are the three types of strata?
According to Australian legislation, there are three types of strata commonly recognized: freehold strata, leasehold strata, and company title strata.
Freehold strata: This is the most common form of strata ownership in Australia. In freehold strata, individual owners have complete ownership of their units and shared ownership of common areas. Each owner holds a separate title for their unit and has the right to sell, lease, or mortgage their property.
Leasehold strata: In leasehold strata, owners have a leasehold interest in their units rather than outright ownership. The land on which the strata building is situated is leased from a landowner or a government authority for a specific period. Owners have exclusive use of their units during the lease term and are subject to the terms and conditions of the lease agreement.
Company title strata: Company title strata are less common but still exist in some older buildings. In this type of strata, owners hold shares in a company that owns the entire building instead of owning a specific unit. Each owner has the right to occupy a particular unit but does not hold a title to that unit. The company manages and maintains the building, and owners have certain rights and responsibilities as shareholders.
It’s important to note that the specific regulations and requirements for each type of strata can vary across different states and territories in Australia. It is advisable to consult the relevant legislation and seek professional advice when dealing with strata properties.
Why is it called strata?
In Australia, “strata” refers to a form of property ownership and management commonly known as strata title. This term is derived from the Latin word “stratum,” which means “layer” or “level.” The concept of strata title was introduced in Australia through legislation to address the growing need for efficient management and ownership of multi-level apartment buildings and other types of shared properties.
Different legislation for each state:
Legislation related to strata or apartment living varies from state to state in many countries, including Australia. Here is a brief overview of the different legislations for strata in each state of Australia:
New South Wales (NSW): NSW has the Strata Schemes Management Act 2015, which governs the administration, management, and operation of strata schemes. It outlines rules for meetings, decision-making, financial management, and dispute resolution.
Victoria (VIC): VIC has the Owners Corporation Act 2006, which regulates the establishment and management of owners’ corporations. It covers matters like governance, maintenance, financial management, and dispute resolution.
Queensland (QLD): QLD has the Body Corporate and Community Management Act 1997, which provides guidelines for the management and administration of community title schemes. It covers issues like by-laws, committee responsibilities, levies, and dispute resolution.
Western Australia (WA): WA has the Strata Titles Act 1985, which governs strata schemes. It addresses topics such as scheme management, meetings, by-laws, financial management, and dispute resolution.
South Australia (SA): SA has the Community Titles Act 1996, which regulates community title schemes. It covers matters such as scheme management, meetings, financial management, by-laws, and dispute resolution.
Tasmania (TAS): TAS has the Strata Titles Act 1998, which governs strata schemes. It includes provisions on scheme management, meetings, financial management, by-laws, and dispute resolution.
Australian Capital Territory (ACT): The ACT has the Unit Titles (Management) Act 2011, which regulates unit titles. It covers matters like governance, meetings, financial management, by-laws, and dispute resolution.
Northern Territory (NT): NT has the Unit Titles (Management) Act, which governs unit titles. It addresses topics such as scheme management, meetings, financial management, by-laws, and dispute resolution.
It’s important to note that the specific details and provisions of these legislations may vary, and it is advisable to consult the relevant legislation and seek professional advice for accurate and up-to-date information.
What defines a strata area?
In Australian legislation, a strata area is defined as a specific type of property ownership arrangement commonly found in multi-unit buildings or complexes. It is governed by state or territory laws.
A strata area refers to a portion of a larger building or land that is privately owned by an individual or entity. It typically includes an individual unit or apartment, along with a share in the common areas and facilities of the building or complex. These common areas can include hallways, staircases, elevators, gardens, swimming pools, and parking areas.
Strata areas are characterized by a strata title, which grants owners exclusive ownership and usage rights to their individual units, as well as shared ownership and responsibilities for the common areas. Owners become members of a strata corporation or body corporate, which is responsible for managing and maintaining the common areas and making decisions that affect the overall development.
The legislation sets out various rights and obligations for strata owners, including financial contributions for maintenance and repairs, adherence to bylaws and rules, participation in meetings, and dispute resolution mechanisms. This legal framework aims to ensure fair and efficient management of shared properties while promoting harmonious living within the strata community.
Our highly experienced solicitors at our sister company, Legal Kitz can provide you with advice that is tailored to your situation, ensuring that your concerns are addressed. You can also request to book a FREE consultation or contact them at firstname.lastname@example.org or 1300 988 954. You can also check out our Business Kitz subscription service today to begin your business with a solid foundation that ensures compliance.