What is a strata scheme? Should I buy a strata property?

Moving into a strata scheme can be a daunting prospect for home buyers. What is strata, exactly? How does it differ from owning a house? Who takes care of maintenance? Are pets allowed?
Imogen Baxter
Ava Crawford
Australian couple cooking in their kitchen

Moving into a strata scheme can be a daunting prospect for home buyers. What is strata, exactly? How does it differ from owning a house? Who takes care of maintenance? Are pets allowed?

This guide will help prospective strata owners understand the strata basics and cover the nitty gritty of strata living.

What is strata?

Strata title (or ‘strata living’) is a system for dividing real estate into individually-owned units and shared common areas such as lobbies, pools, gardens, and driveways. It is also known as ‘stratified ownership’ or ‘owners corporation’.

Each unit owner owns their own unit, but they also share responsibility for the upkeep of common areas with other owners in the building or complex.

Strata title allows individuals to own their own piece of real estate while still having access to communal facilities like swimming pools, BBQs, security systems, and gyms without having to bear all of the costs alone. It’s an increasingly popular form of ownership in Australia, particularly as apartments, townhouses and shared space becomes more common.

As many first home buyers get onto the property ladder by buying an apartment before upgrading later, it's important to understand how strata works.

What are strata responsible for?

The owners corporation is responsible for all upkeep of the strata building. In general, they must:

  • manage and administer the common property
  • repair and maintain the common property, fixtures and services
  • take out and maintain required insurance
  • raise fees from the lot owners to meet financial obligations
  • prepare financial statements and keep financial records
  • provide owners corporations certificates when requested
  • keep an owners corporation register
  • establish a grievance procedure.

What is a strata plan?

A strata plan outlines the different parts of the property that are owned as individual units and those that are considered common property. It also contains information on by-laws – rules governing how the property can be used – and levies – regular fees to pay for upkeep and repairs.

What are strata annual general meetings (AGMs)?

Decisions on the use of common areas often occur at annual general meetings (AGMs), where the body corporate reviews proposals, annual strata fees, and existing strata laws and approves major expenses. These were historically held in person - but, in the modern day, are more likely to be via webinar or Zoom. Strata management affects the day-to-day operations of a strata property and your experience as a resident.

What rights do I have as an owner in a strata scheme?

Unit or lot owners have certain rights when residing in a strata scheme. You have the right to attend meetings, vote on decisions regarding the scheme, access common property areas such as gymnasiums or swimming pools at any time during business hours, and receive copies of records relating to their schemes - including meeting minutes and financial statements. Votes are based on ownership lots or unit entitlements (not the number of individuals living at a property).

An important way that strata-titled property can impact you as a property owner is if you need to do renovations. If you require access via a common area or will obstruct the regular use of a common area for other residents, you’ll be required to get approval from the strata committee. You can contact your chairperson or review the strata documents in advance of committing to renovations.

If you plan to buy into a building that has a strata title, it’s important to understand the financial health of the building’s capital works fund and administrative fund.

  • The capital works fund is what’s used to pay for significant renovations or improvements to the building, in addition to reviewing the building and pest inspection report.
  • The administrative fund is used for day-to-day management such as cleaning the carpets and emptying the bins etc.

It’s recommended to get independent legal advice before buying so you avoid accidentally buying into a building with an outstanding financial claim against it - or a broken roof or lift, which may immediately require an additional expense for you via special levies.

What rights do I have as a tenant in a strata scheme?

Tenants who reside within a strata scheme have rights similar to those of owners but might not attend meetings or vote on decisions being made regarding the scheme unless they are specifically invited by an owners corporation member or representative.

Tenants do have access to all common area amenities provided by the owners corporation during business hours unless otherwise stated in their lease agreement with an individual owner/ landlord. There are some owners’ rights that tenants may not automatically be granted - for example the automatic right to own a pet in the unit.

Tenants are more likely to deal with strata managers and property managers on any building-related issue than they are with the body corporate.

It’s important to note that rights for tenants and owners vary within each state and territory. Find out more about strata management in your state or territory:

What are common strata by-laws?

By-laws are often where you’ll find the rules that affect your day-to-day experience as a tenant or owner in a strata property. Common by-laws include:

  • Rules on pets: if you can have one (assuming your landlord approves if you’re a tenant), what responsibilities you have as a pet owner and any obligations on common property.
  • How many security keys or fobs your unit can have, the cost and process for obtaining a new one
  • Rules on short-term letting your apartment (Airbnb-ing your place might be banned)
  • Restrictions on alcohol consumption and smoking on common property
  • Hours of use for the gym, swimming pool or other shared amenities

What should I do if I have a dispute?

If you have a dispute, it is usually easiest and cheapest to resolve disputes directly through discussion or mediation. If talking it through doesn’t work, you have other options:

  1. Contact the owners corporation (or body corporate equivalent)
  2. Contact Fair Trading or your state or territory mediation service.
  3. Attend a Civil or Administrative Tribunal (in NSW) or equivalent service.

Should I go to strata meetings?

Absolutely! Attending meetings is one of your responsibilities as an owner in a strata scheme, so make sure you know when meetings are held and make sure you attend them if possible.

At these meetings, you can voice your opinion on matters that affect your lifestyle within the property, including security measures taken by management companies or any changes proposed such as alterations to common area amenities etc.

You can also propose suggestions for betterment or improvements that you may feel would benefit all members within the property etc. You may also hear about upcoming events planned by management companies, which could be great opportunities for getting involved with the community. So make sure you attend if possible!

Should I move to a strata property?

Living in a strata scheme has many advantages over non-strata homeownership - convenience, cost savings through communal resources like maintenance staff or shared gardeners, etc. - but it also comes with some unique challenges.

To ensure smooth sailing once you move into your new place, familiarise yourself with relevant laws pertaining to stratified ownership schemes, read through rules regarding pet ownership and press upon your obligations as both tenant and owner.

You should make an effort to understand what levies are due when; learn when meetings are held (and consider attending them). It’s also helpful to develop relationships with other tenants and ask questions about things you don't understand.

FAQs

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Disclaimer
This article is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation, or needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS), or other offer documents before making an investment decision in relation to a financial product (including a decision about whether to acquire or continue to hold).
Prepared by OwnHome Services Pty Ltd ACN 664 492 059. This information does not take your personal objectives, circumstances or needs into account. Always read the disclosure documents for products and services before deciding on a product or service, and consider seeking independent legal, financial, taxation or other advice for your unique circumstances.
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