Understanding strata titles, how it works and its fees
Get a clear overview of strata titles in Australia. Learn what they are, how they function, and the costs involved.
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.
