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In the world of Australian property management, strata are quickly gaining traction as the premier way to establish a standard of living. According to the 2020 Australasian Strata Insights, 9 per cent of Australians live in strata apartments. At publication, there were 340,601 strata schemes and over 2.8 million strata lots across the country, a staggering 7 per cent increase from the last time the study was conducted. This upward trend clearly indicates that it is becoming more crucial to understand how strata and body corporates work.
A strata is a real estate model where two or more people possess individual assets in a larger development while simultaneously sharing ownership of the common areas within the parcel of land or building. Each separate property is referred to as a lot or strata title property. A strata is also known as a strata scheme. As soon as you have completed the purchase of a lot, you are issued a Certificate of Title.
An owners’ corporation or body corporate is a legal entity that brings all lot owners together under one umbrella. It automatically forms when you register a property plan indicating the presence of common property and the formation of a strata scheme.
What is the role of the owners’ corporation?
If you boil it down, the function of the body corporate is responsible for managing and maintaining the common areas of a strata-titled property. Examples of common property include communal gardens, foyers, lifts, gyms, driveways and footpaths. However, there is more to it than that. Body corporates are akin to businesses. They have financial obligations, rules governing members and goals to guide their operation.
Other responsibilities of an owners’ corporation involve:
- Administrating the maintenance of all the strata’s joint property, including buildings.
- Monitoring and safeguarding the body corporate’s finances, for instance, collecting fees and settling bills.
- Collecting and archiving proper strata records.
- Certifying that the property is adequately insured.
- Calling and documenting owners meetings.
- Resolving disputes among members.
- Creating by-laws to govern the operation of the strata.
- Enforcing the rules and regulations.
As you may have surmised, running a strata is no easy task. The duties of the owners are not static- they change with the ever-shifting needs of a strata. Moreover, depending on the size of the body corporate, it can be difficult to determine a leader. For this reason, members of an owners’ corporation often elect an executive committee to establish clear, distinct governance.
In some cases, the executive committee fully embraces the oversight of the strata’s daily operation. They do so in their own time and with no pay. Conversely, others still determine that a professional is better suited to the task. This acknowledgement leads to hiring a strata manager.
A strata manager is an individual or company whose professional qualifications allow them to administer the day-to-day running of strata schemes. Upon appointment by the body corporate, the strata manager signs a contract that defines their role within the strata and owners’ corporation. From here, the manager takes over the duties of the owners’ corporation, putting structures in place to facilitate efficiency and compliance.
Stratas and body corporates are strong, interconnected units that can help to streamline daily living in large developments. Owners’ corporations play a vital role in how a strata works. Therefore, the success of an owners’ corporation feeds the success of the strata scheme. Consequently, the onus is on the members to strive for the best outcomes in all avenues, beginning with the body corporate management services they engage to help take care of their strata.
You may also like: What Can You Expect From Your Strata Manager?
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