Understanding strata titles, how it works and its fees

Strata ownership is a unique form of property ownership that allows individuals to own a portion of a larger property complex, while sharing responsibility for its maintenance and management with other lot owners. Whether you’re a property investor or owner-occupier, understanding strata rules, fees, and responsibilities is important.

What is strata?

Strata, also known as strata title or strata scheme, is a legal ownership arrangement primarily used in multi-unit residential properties. It allows individual ownership of a specific "lot" within a larger property complex (for eg: apartments, townhouses, or even individual houses in some cases).  

In addition to owning their individual lots, strata property owners also share ownership of common areas and facilities within the property. Commons areas include:

• Gardens
• Hallways
• Elevators
• Parking lot
• Recreational areas

How does strata work?

Lot owners within a strata property are members of an organization called the ‘owners corporation’ or ‘body corporate’. The owners corporation will hold regular meetings and are responsible for:

• Managing and maintaining the common property
• Making financial decisions
• Obtaining insurance for the entire strata scheme

What are strata fees?

Strata Fees or Levies

To fund the maintenance and management of the common property, the owners corporation collects fees or levies from each lot owner. These fees are typically paid quarterly, and can vary widely based on factors such as:

• Property's age
• Amenities
• Ongoing maintenance requirements

Sinking Fund and Special Levies

In addition to regular strata fees, there may be special levies or contributions for specific purposes. For example, if major maintenance projects are needed (e.g., replacing a lift or repainting the building), a special levy may be imposed.  

A sinking fund may also be established to save for future capital works and repairs.

If you’re interested in purchasing a property that’s part of a strata title, here are some factors to consider.

This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.‍

Unloan is a division of Commonwealth Bank of Australia.

Applications are subject to credit approval, satisfactory security and you must have a minimum 20% equity in the property. Minimum loan amount $10,000, maximum loan amount $10,000,000, and total borrowings per customer across all Unloan loans is $10,000,000. (For purchase loans a minimum 10% equity is required - however a Lenders Mortgage Insurance (LMI) premium and higher interest rate apply. In some cases, depending on the property’s location or type, an LMI premium may also be required for LVR between 70.01% to 80%). For loans with Lenders Mortgage Insurance (LMI) the minimum loan amount is $10,000, maximum loan amount is $3,000,000 and total borrowings per customer across all Unloan loans is limited to $3,000,000).

Unloan offers a 0.01% per annum discount on the Unloan Live-In rate or Unloan Invest rate upon settlement. On each anniversary of your loan’s settlement date (or the day prior to the anniversary of your loan’s settlement date if your loan settled on 29th February and it is a leap year) the margin discount will increase by a further 0.01% per annum up to a maximum discount of 0.30% per annum. Unloan may withdraw this discount at any time. The discount is applied for each loan you have with Unloan.

*At Unloan, we do not charge any annual, application, banking, account, transaction, late or exit fees. In certain circumstances you may be required to pay a Lenders Mortgage Insurance (LMI) premium. Learn more about why this is applied and how it works. Government fees may also apply. Learn more about government fees here. Your current lender may charge an exit fee when refinancing.