Strata title is a unique form of property ownership that allows individuals sole ownership of part of a property (called a ‘lot’ – or more generally, a unit, apartment or townhouse), as well as a shared ownership in the common property (foyers, driveways etc).
These multiple ownerships make up the legal entity called the Owners Corporation. The Owners Corporation is responsible for the good management of their Strata Titled property.
Why do we use Strata Title?
- The concept of strata title became reality in New South Wales in 1961 when the Conveyancing (Strata Titles) Act 1961 came into effect.
- The concept of Strata Title was gradually adopted by all other Australian states.
- Prior to this legislative change, joint ownership in apartment or unit blocks was arranged via one of the following methods:
- Creation of an incorporated company for the sole use of ownership of the building in question. Individual owners then hold shares in the incorporated company which provides them with exclusive use of a specific apartment or unit.
- Creation of long-term lease agreement (e.g. 99 years) between the building owner and the unit ‘tenant’.
Tenancy in common
- Creation of a co-ownership and management deed between a group of individuals in relation to the joint purchase of a building.
These three methods created significant issues in medium and high-density property ownership, specifically in relation to the lack of individual property title ownership held by individual owners.
Since 1961, all states and territories in Australia continue to review, amend and update their own strata related legislation to enable strata (and similar) schemes to evolve throughout the country.
Categorised in: Strata