Strata Law

Strata law is the law which governs how owners of strata title properties deal with each other and others such as the local council. As the name suggests strata is where a piece of land has been divided into stratum, such as a unit block, and strata title owners effectively own a little bit of space above the ground.

Before strata schemes, most commonly, a unit block was divided up was using a scheme called “company title”. Under that system a company was the owner of a property and shareholders held a right to occupy a certain part of the property. Some properties are still under company title. Often company title properties are less expensive than strata title because the ‘owner’ does actually own the real property, rather ‘merely’ the shares in the company which owns the property. Banks may not lend to as high an LVR (loan to value ratio) on company title properties.

Strata title was ultimately conceived in NSW and the legislation implementing the regime came into force in 1961. Since then strata law has continued to develop with a few significant pieces of legislation affecting strata schemes before and since. Some important changes commenced when the latest reform, the Strata Schemes Management Act 2015, came into effect in late 2016.

The capability to subdivide property using the strata system is now used by all states and territories of Australia.

A significant feature of strata schemes is the existence of common property for which the owners corporation have certain duties including to maintain and repair. While strata schemes have made the buying and selling of often more affordable property easier, strata living provides its own complications arising from often close living and joint responsibility intrinsic to the owners corporation.