Strata Title Property
Strata title allows individual ownership of part of a property (called a ‘lot’ which is generally an apartment, unit or townhouse), combined with shared ownership in the remainder (called ‘common property’ e.g. foyers, driveways, gardens) through a legal entity called the owners corporation or a body corporate.
Developments that can exist under strata plans can be residential, commercial, retail, mixed-use, serviced apartments, retirement villages, caravan parks, golf estates, industrial estates, and resorts.
The key features of living in a strata scheme are:
- you own your unit or apartment as well as sharing ownership and responsibility for ‘common property’
- if you own your unit, you are automatically a member of the ‘owners corporation’ which has responsibility for common property
- you have to contribute to the cost of running the building by paying quarterly levies
- you also have to pay money into a capital works fund (sinking fund), for future long-term expenses such as painting the building or replacement of guttering
In comparison to living in a freestanding house, there are some lifestyle restrictions in a strata scheme, for example, there are rules (by-laws) that may affect you doing renovations to your unit, that state where you can and cannot park your car, where you can dry washing or whether or not you can keep pets.
The owners corporation
An owners corporation is made up of all lot owners in a strata property. If you buy into a strata title property, as a lot owner you automatically become a member of the owners corporation. There is no ‘opt out’ option from the obligations that go hand in hand with being an owners corporation member. It is the owners corporation responsibility to carry out tasks required under relevant laws including the maintenance of common property, infrastructure, and shared amenities.
The strata committee
The term ‘Strata Committee,’ also known as ‘Body Corporate’ or ‘Owners Corporation Committee,’ in other states, refers to the representative body of an owners corporation. This committee holds various executive positions, including the Chairperson, Treasurer, and Secretary. During each Annual General Meeting (AGM), the members of the strata committee are elected by the owners corporation, and their term typically spans one year. The core purpose of the strata committee is to act on behalf of the owners and oversee the day-to-day administrative tasks of the strata scheme. Their responsibilities ensure that the owners corporation fulfils its legal obligations. If a strata manager is involved, the committee’s role shifts more towards facilitation. This involves tasks like approving invoices, addressing owner or occupier requests, organising meetings, managing by-laws, and reporting maintenance issues.
Decisions and role of the strata committee
A decision made by the strata committee carries the weight of an owners corporation decision. No individual committee member can unilaterally make decisions for the owners corporation without consulting fellow members. If any conflicts arise between the owners corporation and the committee, the owners corporation’s decision holds sway.
Composition of a strata committee
The composition of the strata committee for the upcoming year is determined by the owners corporation during each AGM. The committee’s size can vary, generally ranging from 1 to 12 members, depending on the specific needs and requirements of the strata scheme.
The strata manager
What do strata managers do? Strata managers are professionals who are responsible for the administration of an owners corporation. They are appointed to look after the legal and administration requirements such as insurance, work health & safety compliance, the collection of levy contributions, maintenance and ongoing communications with owners. They are specialists in their field, possessing the knowledge and skill to administer the owners corporation in accordance with the complex requirement.
If a building is not properly maintained and someone is injured as a result, the owners of each apartment can be held legally responsible. If a building is not fully insured for the correct replacement cost, and if something happened to the building where a rebuild was necessary, the owners would have to make up the shortfall from their own pockets.
Strata manager duties include:
- Arrange insurance
- Ensures the strata scheme complies with all the Work Health & Safety (WHS) regulations
- Manages a preventive maintenance program to maintain the value of the property
- Chairs the committee meetings, annual general meeting, extraordinary meetings
- Prepares and distributes notices, agendas and minutes
- Prepares and distributes financial statements and budgets
- Attends to correspondence
- Organise and coordinate repairs and maintenance of common property
- Maintains the owners corporation register (the strata role)
- Arranges payment of related invoices
- Prepares and distributes levy contribution notices and manages payment and arrears
- Attends to orders, submissions and appeals
- By law breaches and appeals
- Provide advice in handling ‘difficult’ or complex strata issues.