Strata title was first introduced to better cope with the legal ownership of apartment blocks.
Historically, communal ownership of apartments, units or flats usually fell under company title. This was the only adequate method of dividing ownership. A company would own the building and a prospective buyer would purchase shares in the company that then entitled them to inhabit a specified apartment.
Company title do not confer separate ownership of a lot and financial institutions saw this as a risk, weren’t then keen on lending money to such purchasers, and purchasers were typically charged higher interest rates as a consequence.
This funding impediment made it difficult for real estate developers to build and market large residential buildings. So around 1960 Lend Lease made representations to the then New South Wales Government for legislation that facilitated flat ownership. In support of these representations they engaged a Sydney barrister, Mr Rae Else-Mitchell (later Mr Justice Else-Mitchell of the New South Wales Supreme Court), to draft a new titles law.
The goal was to devise a solution to make it easier to borrow money for these types of residential units. The answer was Strata Title, a world first Aussie phenomenon.
Read Related: What is Company Title?
The very first version of strata title was the Conveyancing (Strata Titles) Act 1961 which came into force on July 1 1961. A few weeks later the first Strata Plan in the world was registered in the suburb of Burwood, a block of 18 units named Lindsay Gardens. It would be the beginning of strata living and has led to a thriving strata community!
The most significant feature of the new legislation allowed each lot or apartment to have its own title deed. It can be bought, sold, rented out or mortgaged without any consent being needed – hence giving the banks the much needed security for the loan.
living with more than 270,000 strata schemes in Australia that cover in excess of two million individual lots.
The growth and increasing popularity of strata is captured in this interactive map of strata schemes in Sydney from 1961 to 2015.
Strata title, an innovation in property law, has enabled individuals or businesses to own a section of a property, or a ‘Lot’ and combined this with the shared ownership of Common Property.