- The meaning of strata
- Strata terminology in each state
- What is a strata scheme?
- What is a strata plan?
- What do you own in a strata title?
- Buying a lot in a strata scheme
- How do strata title properties work?
- Owners corporation
- Building rules and by-laws
- Governance and compliance
- What do you need to know about insurance?
- Paying levies
The meaning of strata
Strata means “to layer.” In property terms, it refers to a form of ownership where individuals own a specific part of a property, their lot, while sharing ownership of common areas, common property, with everyone else in the scheme.
It’s different from owning a freestanding house, where you own the land and building outright. In a strata scheme, you own the inside of your lot, and the shared spaces are owned collectively. Think driveways, gardens, lifts and lobbies.
Strata title was first introduced in NSW, Australia in 1961, and it’s now the most common form of ownership for apartments, townhouses, villas and units across the country.
If you’ve just bought into a strata property, or you’re thinking about it, this page covers the basics of how it works.
Strata terminology in each state
Strata title does not work the same across Australia. While the concepts are similar, the
legislation is not, and it is vital to use resources tailored to your specific state or territory.
This page has a list of the primary strata legislation for each state and territory in Australia – Australian Strata Legislation by State/Territory.
The table below helps you understand the different terminology used across Australia. If the
information in the article below refers to an owners corporation, we are also talking about the
body corporate or the strata company.
| State | Entity name | The committee | The funds (Savings) |
|---|---|---|---|
| NSW | Owners Corporation | Strata Committee | Capital Works Fund |
| QLD | Body Corporate | The Committee | Sinking Fund |
| VIC | Owners Corporation | The Committee | Maintenance Fund |
| WA | Strata Company | Council of Owners | Reserve Fund |
| SA | Strata Corporation | Management Committee | Sinking Fund |
| TAS | Body Corporate | Committee of Management | Maintenance Fund |
| ACT | Owners Corporation | Executive Committee | Sinking Fund |
| NT | Body Corporate | Management Committee | Sinking Fund |
What is a strata scheme?
A strata scheme is a building or group of buildings divided into individually owned lots such as apartments, townhouses, villas, units, along with shared common property. When you buy a lot, you automatically become part of the scheme and share ownership of the common areas with all other lot owners.
You can think of a strata scheme as the whole package: your lot, everyone else’s lots, the common property, the rules, and the legal structure that holds it all together.
What is a strata plan?
A strata plan is the registered legal document that maps out the scheme. It shows the boundaries of each lot, identifies what’s common property, and records each owner’s unit entitlement which determines their share of costs and voting rights.
Before buying into any strata property, it’s important to get a copy of the strata plan. It’ll tell you exactly what you’re buying and what you’re responsible for.
What do you own in a strata title?
In a strata title property, you own the interior of your lot. That typically means everything within the walls, floors and ceiling of your apartment, unit or townhouse, including fixtures and fittings. In some schemes it also includes a balcony, garage or storage space. Your strata plan will confirm the exact boundaries, so make sure you take a look.
What you don’t own outright is the land. That’s collectively owned by all lot owners through the owners corporation.
The foyer, stairwells, lifts, driveways, gardens and pools, for example, are common property. It sits outside your lot and is shared by everyone in the scheme. The owners corporation is responsible for maintaining it, funded by the levies that all owners pay.
Buying into a strata scheme
It’s a good idea to do your homework before purchasing a strata title property. A strata inspection report will tell you about the scheme’s financial health, levy history, insurance, any building defects and upcoming special levies. All things that could cost you money down the track.
You should also read the by-laws carefully. Some schemes have restrictions that may affect how you use your property, from pets and renovations to the short-term rental of your lot.
To find a qualified strata searcher in your state, search in The LookUpStrata Directory.
How do strata title properties work?
Owning a lot within a strata title property is very different from owning a free-standing house or building.
Owners corporation
When you purchase in a strata scheme, you become a member of the owners corporation. The owners corporation is responsible for managing and maintaining the building’s infrastructure and common areas. Owners corporation members share the legal and financial responsibility for the upkeep of these common areas through strata levies.
Building rules and by-laws
Every scheme has its own set of rules, called bylaws, that owners and tenants must follow. Residents share walls and common spaces, so these rules manage daily activities, such as parking, pets, renovations and noise.
In addition to the scheme by-laws, each state has strata legislation that covers committee governance, processes for levy increases, building maintenance, common property use, and the enforcement of bylaws.
Governance and compliance
The owners corporation consists of all lot owners, who elect a strata committee to manage the scheme’s daily operations. The committee handles routine decisions while all owners vote on major issues at general meetings. Most schemes engage a professional strata manager to oversee complex administrative and legal tasks.
What do you need to know about insurance?
Schemes are required to insure themselves against unforeseen events. Building insurance provides cover in the event of loss or damage to the scheme’s buildings, including the structures and fittings within each lot and all common property.
Schemes also require public liability insurance, workers compensation insurance and cover for voluntary workers. Requirements may vary from state to state, so it’s a good idea to check what the requirements are in your state or territory.
Paying levies
Lot owners must pay quarterly levies for the administration and maintenance of the common areas. The owners corporation may sometimes need to raise special levies to cover significant unexpected expenses when funds are not available.
If a special levy is approved, you are required to pay. The scheme can also borrow money through strata finance or a strata loan.