Tuesday, July 5, 2022

What is Strata Title?

What is strata title - Strataville

What is strata title?

Strata title is a form of ownership devised for multi-level apartment blocks and horizontal subdivisions. It facilitates individual ownership of part of the property (called a ‘lot’) whilst sharing ownership of common areas.

Strata title is actually an Australian innovation in property law that has been copied around the globe.

The concept came into being nearly 60 years ago, to replace company title, and there are now more than 270,000 such schemes encompassing more than two million individual lots across Australia. In Sydney, strata now accounts for more than half of all residential sales and leases because of its popularity with investors.

Read Related: What is Company Title?

The word strata, the plural of stratum, can be defined as one of a number of portions or divisions likened to layers or levels.

When you buy into a strata plan you buy a “lot” – generally an apartment, unit or townhouse which may include the main unit area and possibly a balcony, garage or even storage area. Other parts of the property are known as common property. These areas could include car parks, entrances and lobbies, external areas such as gardens and lifts, and any recreational facilities such as pools and gyms.

The Strata Community Association define Strata Title as ‘allows individual ownership of part of a property (called a lot’ and generally an apartment or townhouse), combined with shared ownership in the remainder (called ‘Common Property’ e.g. foyers, driveways, gardens) through a legal entity called the owners corporation — or body corporate, strata company or community association, depending on your state or territory of residence and the type of scheme.’

Residential and commercial properties can both exist under strata plans, along with mixed use properties, retirement communities and caravan parks. Strata title can exist in properties with just two duplexes all the way to large tower blocks with hundreds of owners.

Read Related: History of Strata Title

Strata Title Pros & Cons


  • Strata Title is widely considered a fair, transparent and equitable system.
  • Strata properties (e.g. unit, apartment of townhouse) are often a great starting point for people looking to make their first home purchase, as the cost is generally much cheaper relative to buying land with a free-standing house.
  • Constant demand for strata properties could push up their price in the future and can make for an easier sale in due course.
  • Owners get to vote on bigger decisions.
  • Typically strata title adds value to a property when compared to company title.
  • Maintenance of the property is organised by the strata corporation (owners corporation or body corporate) and mostly paid for via strata levies/fees, which are paid every three months.
  • Maintenance (strata levies) can be budgeted with more certainty, and you’ll have the peace of mind of knowing that there is money available for repairs before they come up.
  • Strata Title is a great way to discover what upkeep properties need before buying a stand-alone house.
  • Depending on the suburb, bank lending policies are favourable for strata title.
  • The rules that limit what individual owners can and can’t do are designed to preserve the value and comfort for all owners, which, for example, lessens the risk of troublesome neighbours.
  • If you’re buying an investment property, strata fees and associated costs are tax deductible. The various restrictions on what can and can’t be done with the property can also be an advantage if you’re renting to tenants.


  • Owners are required to pay levies, adhere to bylaws and vote at meetings.
  • Strata fees, levies, are subject to change and are likely to increase as buildings age.
  • Strata levies can be expensive, particularly in larger blocks with lifts, gyms and pools.
  • As an owner in a strata title building you also have a share of the liability for anything that goes wrong. However, strata insurance is compulsory.
  • It can be very noisy to live in a strata title apartment since you’ll might have neighbours living above, below and besides you.
  • Your unit/apartment could lose significant value, particularly in large blocks, if your neighbour has to sell quickly as a result of divorce or other financial difficulty.
  • To get the most out of your purchase, stay engaged with the owners corporation and know what’s going on.
  • The rules (by-laws) which govern what owners can and can’t do can serve to your advantage, but are also restrictive compared to Torrens title. For example, it is not uncommon for a owners to require permission to keep pets on the property, or to make external changes to your lot.
  • Prospective purchasers are entitled to see the strata records and know the financial state of the building. This is only an issue if your buildings isn’t well run or doesn’t have satisfactory funds in a capital works fund.

Before buying property it’s important to understand what sort of title you’re purchasing.

Owning your own castle, on its own land, has many wonderful freedoms but all maintenance and upkeep falls on your shoulders. Conversely, a strata title property is maintained, external to your lot, by an owners corporation where you pay quarterly levies. Lots to consider before signing on the dotted line.

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.

Strataville Editorial
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