Taken from "Strata Living" by the NSW Office of Fair Trading, Department of Commerce
What is a Strata Scheme?
A strata scheme is a building, or collection of buildings, where individuals each own a small portion known as a 'lot' (for example, an apartment or townhouse) but where there is also common property (e.g. external walls, windows, roof, driveways, foyers, fences, lawns and gardens). Every owner shares ownership of the common property.
The original concept of strata title was to allow people to own their units in multi-level buildings. While it was originally expected that strata schemes would all be vertical blocks of flats, some strata schemes are all on the one level (e.g. townhouse and villa developments). Strata schemes vary in size - some comprise only two lots, other have more than 700 lots. In addition, strata schemes do not just apply to residential developments. There are also commercial, industrial, mixed use, hotel and retirement village strata developments.
Before strata title, the most common way of buying into a high-rise building was to buy shares in the company which owned the building, which gave the right to occupy one or more of the units. This way of organising property ownership is called 'company title'. There are still some company title buildings in existence.
There are currently around 65,000 strata schemes in New South Wales and the number is increasing steadily with five or more new schemes being registered each day. Strata schemes cover residential, commercial, industrial, mixed use and retirement village developments and they range in size from two lots to over 700 lots.
It is estimated that close to a quarter of the state's population live, own or are employed within a strata scheme.
The concept of strata title, where people own and have title to individual lots (units or apartments) within buildings or complexes, was originally devised in New South Wales in the early 1960s. The laws applying to strata schemes have been updated many times over the years to keep up with the increasing complexity and sophistication of strata developments.
The Office of Fair Trading administers the Strata Schemes Management Act 2015, which sets out a framework for the management of strata schemes by their owners and establishes a dispute resolution process.
The subdivision and registration aspects of strata developments are administered by the Department of Lands under separate legislation, the Strata Schemes (Freehold Development) Act 1973.
The Strata Lifestyle
Strata schemes are effectively small communities where the activities and attitudes of residents can have a significant impact on the satisfaction and enjoyment of others. Therefore, it is important to be aware of your responsibilities and obligations when you own or live in a strata unit.
Whilst strata living can provide a friendly community style environment, it helps to remember that it is not the same as living in a freestanding house. Some activities may be more restricted in a strata scheme, for example, where you can park your car, hang your washing or when and how you can renovate. Understanding these differences before moving into a strata scheme can help reduce the likelihood of disputes over these activities later on.
What is different about living in a strata scheme?
Before buying into a strata scheme what should I look out for?