What Strata Means

Date published: 5th April 2023, updated 6th August 2024

What is strata and what does it mean for you living in a strata community

In Australia, the two most common types of ownership are freehold and strata. Freehold is pretty straightforward – you own the land and the building. Strata, on the other hand, can be a bit more complex, and the way it works can vary from state to state.

What is strata?

Strata means a type of property ownership where different individuals own specific parts of a property – such as apartments – and also share in a company that owns the building. The company is called the body corporate – also sometimes known as the owners corporation, council of owners or strata corporation, depending on which state they’re in.

The most common example in Australia is an apartment complex, where individuals own the units, and the body corporate owns the land, common areas (gardens, pools, lifts, driveways and other common property) and the building itself.

How does strata work?

Strata works by dividing a property into separate ownership parcels called strata titles. They give the owner full residency and ownership rights to their particular apartment and, by voting at AGMs and other owners’ meetings, a say on how the overall property is managed. Strata schemes differ across Australia due to individual state laws and each state compiles their own guide like this NSW example.

Owning a strata title makes you a stakeholder or member, giving you the right to vote on major decisions, elect committee members to manage the regular operation of the corporation, and vote on by-laws of the property.

In a way, it’s a bit like an exclusive club open only to those who own apartments in the building. You pay a fee to the body corporate (usually quarterly or annually), and in return, the body corporate pays council rates and sewer charges, and covers the cost of maintenance, building insurance, staff wages (e.g. cleaners, gardeners, managers) and expenses for common areas such as electricity bills for lobbies and water for gardens etc.

While laws are specific to each state, strata schemes do share many similarities, such as the need for committee elections, various financial obligations and compulsory minimum strata insurance.

What does it mean to live in a strata community

Living in a strata community refers to owning or renting a lot in a larger complex while sharing common areas and facilities with others. This setup, known as strata title, includes properties such as apartments, townhouses, villas, duplexes, and high-rises. The common areas, such as gardens, pools, and hallways, are collectively owned and maintained by a legal entity called a body corporate or owners' corporation.

Strata Structure

Strata titles allow individuals to own their units within a larger complex while sharing ownership of common areas such as gardens and pools through a body corporate or owners' corporation. State regulations governing strata titles vary across Australia. For example, New South Wales operates under the Strata Schemes Management Act 2015, while Victoria follows the Owners Corporations Act 2006. Both have their own frameworks detailing governance, dispute resolution, financial management, and maintenance responsibilities.

Benefits of Strata Living

Strata living offers significant advantages, such as access to shared amenities including swimming pools, gyms, tennis courts, parking garages, communal gardens, and retail spaces – fostering a strong sense of community and promoting a healthy lifestyle.

Security is another key benefit of strata communities, with features like CCTV cameras, gated entrances, and building managers providing residents with peace of mind and enhancing safety.

Moreover, one of the benefits of living in a strata community is the relief from maintenance responsibilities such as lawn care and roof repairs, which are managed by the strata manager or owner’s corporation.

Responsibilities of Strata Ownership

Owning a strata property means you are responsible for several crucial aspects. Firstly, adherence to by-laws and governing aspects like noise levels, pet policies, and use of common areas to maintain community harmony. Active participation in the body corporate is also essential. This can involve attending meetings, voting on decisions affecting the community (such as budget allocations and by-law amendments), and potentially serving on committees. Additionally, owners must contribute to regular strata fees to fund maintenance, repairs, insurance, and administrative costs for shared facilities. These responsibilities ensure the effective upkeep of the strata property and a cooperative living environment within the strata community.

What do I need to consider when buying a strata title property?

Buying into a strata property can require a little bit more research than buying a freehold property, because there may be a few more conditions attached that could potentially impact your enjoyment of the property.

Here are 4 key things to check:

Strata by-laws
Each strata property has its own by-laws in place. They can be quite simple, covering the use of common property, and any permission required to make changes or additions (such as an air conditioner etc.). However, they can also be quite complex, and cover things such as short-stay rentals, storage of items, when furniture can be moved in and out, using barbecues, decorating balconies etc. Always ask for a copy of the current by-laws before committing to buying a strata property.
Strata fees
They are mandatory contributions paid by owners with properties located in a unit, villa, townhouse or duplex complex. These can add a significant amount to an owner’s annual expenses – especially if the property has a manager or concierge, extensive gardens, a pool or lifts. Make sure you know how much the strata fees are for the unit you’re looking at, because many strata properties apply different rates to different units.
Strata finances
The strata fee you pay to the body corporate is often split between two accounts. The operating or administration fund is there to cover day-to-day and periodical expenses such as insurance, cleaning, gardening, management fees, council rates etc. A separate Capital Works Plan (NSW), sometimes referred to as a Sinking Fund Plan (QLD/NT/SA/ACT) or Maintenance Fund Plan (VIC/WA),can be optional or compulsory, depending on the state you're in. It's designed to cover the costs of major maintenance or improvement works – whether planned or in an emergency. Make sure you know how healthy the strata corporation's finances are – otherwise you may face ongoing costs you hadn't expected.
Insurance cover
All states require body corporates to carry strata insurance of some kind. At a minimum, it must cover the cost of building damage and repair, as well as public liability for personal injury or property damage that happens on common areas. But other events can also be very expensive to fix, and may not always be covered by compulsory insurance. Check the strata insurance policy and any optional cover that’s been included (or ignored), so you can be confident that if an expensive problem arises, you and the other owners won't be burdened with extra out-of-pocket expenses.

Navigating Strata ownership by state

Strata ownership can vary widely across Australia, as each state and territory regulates strata communities differently.

In NSW and Victoria, the elected owners who manage the community are known as the strata committee. In Queensland and the NT, they're called the body corporate committee. South Australia refers to them as the management committee, while WA uses the term strata council. In Tasmania, they are known as the committee of management, and in the ACT, they are referred to as the executive committee.

Knowing these differences is crucial for strata owners and buyers to manage their properties effectively. You can explore the specific laws in your state or territory to navigate strata ownership and ensure compliance with local regulations.

You can also visit our state-specific pages for more detailed information:

If you have questions or concerns about residential strata ownership in your state, reach out to Flex. Our team is equipped to provide expert advice to help you make informed decisions about your strata property and to ensure that it is adequately protected.