In Australia, the term strata refer to a model of property ownership where one individual purchase a single unit contained within a development while jointly owning the common areas with others.
Strata were first established in 1961 after the NSW Parliament passed the Conveyancing Act of 1961. Before then, the only system available to define the ownership of single units within a larger complex was inefficient and cumbersome. This lack made banks reluctant to approve lending geared towards apartments or units.
Since then, strata schemes have grown and become more commonplace. They have also evolved into complex structures in response to a corresponding change in the nature of developments. This growth has given rise to the birth of an entire professional industry centred around the operation of strata.
Finding a strata is simple. Today, many residential developments in Australia are established as part of a strata plan- a subdivision of a parcel of land representing the common property and the individual lots within the strata scheme. Serviced apartments, residential complexes, caravan parks, and retirement villages are all examples of potential strata. They are also established in some commercial buildings and retail areas.
To become part of strata, you must purchase a strata-titled property. A strata title is a legal document tailored to securing and defining the bounds of strata ownership. It includes a statement of possession of a lot and states the associated common property. Having a strata title gives you more control over your property; therefore, obtaining one is imperative as soon as the purchase is completed. It also provides a comprehensive framework for the development while setting out the rights of the parties involved.
A strata-titled property is a lot within a scheme whose ownership is established by a strata title.
As soon as you have ownership, the responsibility for the shared areas falls to you and your fellow owners. For example, if you buy an apartment in a building that is part of a strata scheme, you automatically gain joint possession of the lobby areas, amenities, gardens, and other common property. Furthermore, you become part of the owners’ corporation.
The owners’ corporation- also known as a body corporate– is a collection of individual lot owners within a strata. Membership in a body corporate is mandatory and automatic upon purchase. Its primary function is the management and maintenance of all common areas within the strata plan. To verify membership, an owner presents a strata title.
Body corporates establish by-laws that will govern every member of the community- owners and tenants alike. Conversely, they must certify that the scheme remains in compliance with state legislation at all times. In addition, they must safeguard all records about the strata, certify that the strata scheme is adequately insured, and proper maintenance of the common areas is carried out.
Considering the comprehensive and complex legislative requirements are, it is difficult for lot owners to be wholly responsible for navigating through all the legalities. Additionally, strata operation can be very involving, with nuances that are easily overlooked if you don’t have the experience to anticipate the needs of the strata. As a result, body corporates engage the services of a strata manager to oversee the day-to-day operation and act as a professional intermediary.
In conclusion, strata and body corporates are intertwined real estate entities that stem from a model of property ownership, which was established to streamline how multiple single lot owners within a development interact with one another. Before an owners’ corporation can be founded, strata must exist. Once each group is created, their interdependence means that one cannot exist without the other.