Strata title and body corporate

by Chris Lang on March 20, 2012

Body corporate and strata titles

If you are planning to buy a unit or a flat in an apartment building, you need to know what a strata title is. Basically, a strata title makes it possible for you to own a part of the building (and before the strata title law was introduced that was impossible).

Why do we need strata titles?

Usually any apartment building or block of units has “common areas” such as the entrance hallway, car spaces or garages, a garden, a gym, a pool, etc. It is clear that you’re responsible for maintenance of your flat, but who is responsible for maintenance of all common property? The answer is “all of the owners of flats/units together”. Naturally, when many people are involved in something there might be differences of opinion, so this is why body corporate was created. It is the organization that is in charge of enforcing all the regulations for strata units or apartments.

What kind of regulations are there?

As an owner of a strata title, you are responsible for things such as:

  • getting the right insurance for your property
  • obeying the rules and by-laws of owners corporation
  • participating in owners meetings
  • notifying the owners corporation any time the unit owner or the tenant changes
  • paying levies – money to cover the cost of maintenance and repairs of common areas, etc.

When you pay body corporate fees, what exactly are you paying for?

The owner’s corporation will do the following for you:

  • Keep all financial records, accounts and statements
  • Keep the common property compliant with fire safety and OH&S regulations
  • Carry out repairs, renewal and maintenance of common property
  • Pay the suppliers and service providers
  • Resolve disputes between owners
  • Hold strata owners meetings
  • Take care of insurances
  • Enforce by-laws

And that’s just a few examples. So as you can see there are many things to take care of, which is why most strata units are using special agents to deal with that entire headache.

In terms of expenses, compared to people who own a house on their own land strata owners have one extra expense, the body corporate fees. It is hard to provide an estimate here since the fees vary significantly depending on the size of common property, whether it’s high-maintenance or low-maintenance, and on management fees of the particular company that manages your strata scheme. However, when buying a strata unit or apartment, you can always check the Section 32 Vendor’s statement document, and find out the exact amount of body corporate fees, just like you would do with council rates.

Strata jargon

Those thinking of getting involved in a strata scheme, there is a whole new vocabulary you will need to know. For example, “by-laws” means a set of rules that tenants and owners must obey – such as no pets allowed, no noise after 11 pm, etc.

Another term you need to know is “lot” and how it is different from “common property”. Lots are the units or the apartments that people own, including parking spaces / garages. Common property is everything else on the parcel of land, that is not owned by a particular person. It can include common stairwells, driveways, visitor parking, roofs, paths, gardens, main gates, garbage areas, lifts, etc. “Sinking fund” is also a term you will often hear. This is a fund that owners corporation manages: a part of every body corporate fees payment you make goes towards this long term fund, to be used when major repairs or renewals are needed.

I have found a great site that explains everything about strata titles in details, including those new words and terms – check it out here .

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