Strata is a type of property ownership that includes individual ownership of parts of a parcel of land (lots) and shared ownership of other parts of the parcel (common property).
To manage the parcel, strata titles schemes are established as small, self-governing communities, operating as a democracy. The owners decide collectively how best to manage the parcel. For instance, each strata titles scheme can decide on and enforce its own rules, called by-laws, to suit the way owners want to live together and restrict unwanted behaviour.
In Western Australia, each lot owner has the right to vote on decisions affecting the strata titles scheme. Equally, owners have responsibilities, like sharing the costs for the upkeep of the common property.
The owners of lots in a strata titles scheme, through the strata company, may engage a strata manager to perform certain duties. If so, they should be aware of what the strata manager’s legal obligations are and make sure their strata manager delivers a professional service in line with the written contract they are required to have with the strata company.
People look to buy into strata titles schemes for different reasons - often they are cheaper than the equivalent freehold title or it is the location or property type that attracts them.
Whatever your reason for favouring a strata property, it is important to understand the ways that it is different from a freehold property.
Some examples of how living in a strata property is different to a freehold lot:
- Strata owners share ownership of any common property such as gardens, external walls, roofs, driveways, and stairwells, and need to share costs associated with this common property, including repairs and insurance.
- In a freehold lot, there are many things you can do without getting approval from your neighbours, such as keeping several dogs or having a late-night party. However, most strata titles schemes will have by-laws in place to ensure that people can live in close quarters with one another as harmoniously as possible.
It is important to understand what you’re buying into so that you can better compare properties and make a more informed decision.
Visit our Resources for strata buyers page for more information.
Strata scheme
A strata scheme is a building, or a collection of buildings, where:
- the property that each person owns is called a ‘lot’ (for example, an apartment, villa, or townhouse)
- all the owners share ownership of and responsibility for the ‘common property’, such as external walls, foyers, and driveways.
Strata is sometimes referred to as ‘built strata,’ where the boundaries of the lots, including the height of the lots are defined by reference to the building or buildings shown on the strata plan.
Survey-strata scheme
A survey-strata scheme is comprised of lots where the boundaries of the lots are marked out by a licensed land surveyor and shown on the survey-strata plan. The survey-strata plan does not show any buildings and is very similar to a freehold parcel of land. As with ‘built strata’, all the owners share ownership and responsibility for the ‘common property,’ such as driveways and garden areas. Common property is specifically shown on a survey-strata plan.
Single tier strata scheme
A single-tier strata scheme is a strata scheme where no lot exists above another lot. This means, the floor of one lot cannot form part of or all of the ceiling of another lot. Multi-storey blocks of units are not single tier strata schemes, but a two-storey unit such as a townhouse or villa can be part of a single tier strata scheme.
Leasehold scheme
A leasehold scheme is a strata or survey-strata scheme which is set up for a fixed term lease of 20 to 99 years. The owner of a lot in a leasehold scheme is referred to as the ‘lessee’ and the owner of the leasehold scheme is referred to as the ‘lessor.’ For the duration of the lease, the lessee has the right to deal with the land as they choose, for example, they may sell the lot without requiring permission from the lessor.
Strata titles scheme
A strata titles scheme is a type of subdivision where a freehold parcel of land is subdivided into:
- two or more lots, or
- two or more lots and common property.
Strata titles schemes allow lots to be owned separately and for common property to be owned collectively by the lot owners and managed through a strata company.
Strata company
The term ‘strata company’ refers to all the owners of lots within a strata titles scheme. When purchasing a lot in a strata titles scheme you become a member of the strata company. On registration of a strata titles scheme, a strata company is automatically established and the name of the strata company is recorded on the scheme notice for the strata titles scheme.
The strata company is the governing body of the strata titles scheme and is responsible for:
- managing the common property
- the financial management of the scheme
- enforcing scheme by-laws
- obtaining insurance for the scheme (if required).
Strata council
A council comprising lot owners in the strata company, exercises the duties and powers of the strata company for the benefit of all proprietors. The number of members of council, election of council members and council procedures and decision-making are set out in a scheme’s by-laws.
Strata manager
A person engaged to carry out some of the duties of the strata company. They are instructed and controlled by the strata company. In the new legislation a strata manager is a person engaged to take on the duties and powers of the strata company for a fee.
Strata or survey-strata plan
A strata or survey-strata plan shows how the freehold parcel of land has been subdivided to create the strata or survey-strata scheme. A strata plan will show the boundaries of the strata lots, including the height of the lots, which are defined by reference to a building or buildings shown on the plan. A survey-strata plan will show the boundaries of survey-strata lots as surveyed by a licensed land surveyor.
Common property
Common property is property that is jointly owned by all owners in the scheme and is not contained within any lot. The common property in a strata scheme is the part or parts of the parcel of the scheme that do not form part of a lot in the scheme. The areas of the scheme which constitute common property will vary from scheme to scheme. To know exactly what is common property and what is a person’s lot, you will need to look at the plan for your scheme.
Unit entitlement
The schedule of unit entitlement, which is registered with Landgate, shows the unit entitlement for each lot in the strata titles scheme. The unit entitlement determines the lot owner’s share of ownership of common property in the strata or survey-strata scheme, and the lot owner’s voting rights in respect of their lot. Unit entitlement also determines the contributions (levies) each lot owner pays, although this is subject to the scheme by-laws.
Contributions
Contributions are the fees paid by all lot owners in a scheme to cover the projected costs and expenses of the strata titles scheme. They are paid into funds administered by the strata company, which include the administrative fund and reserve fund.
By-laws
All strata and survey-strata schemes have a set of by-laws, or ‘rules’ that owners, occupiers and in some cases, visitors must follow. By-laws cover issues such as parking, noise restrictions and the conduct of residents and visitors. The strata company can enforce these rules through the State Administrative Tribunal, which may penalise a person who breaches a by-law.
Scheme documents
The scheme documents are the critical documents related to a scheme. Scheme documents must be registered in accordance with the Strata Titles Act 1985 to establish a strata titles scheme. Registering a scheme document means that it is registered on and incorporated in the Register maintained by the Registrar of Titles under the Transfer of Land Act 1893.
Scheme documents are for a strata titles scheme are:
- Scheme plan
- Scheme notice
- Schedule of unit entitlements
- Scheme by-laws
- Strata lease for each lot (leasehold schemes only).