Beginner’s Guide: What is Strata?

April 19, 2022
what is strata

Going back and forth between the style of living you want to embrace can be a difficult decision to make. Here’s an important question to consider: what is strata housing

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What is strata living?

It may seem like a foreign concept, but strata exist so that living in your home is a lot smoother. Instead of asking yourself ‘what is strata living,’ try looking at it as more of a guide.

Strata is purposed as a guide when you are dealing with the owners corporation. It helps with managing common areas, negotiating bylaws, and preparing for fees that may come up due to the strata scheme

There can be some confusion when it comes to the different committees, levies, bylaws, and meetings. Having a comprehensive understanding will help you make the best decision for yourself. 

Strata schemes

what is strata

You may be wondering – what is a strata scheme? This is essentially a system that is meant to handle the legal ownership of a specific portion of a building. 

If you live in a strata scheme, you own an apartment or lot, but you also share ownership of all the building’s common areas along with other tenants. 

Different variations of strata-titled buildings exist. You can either live in a residential stratum or own a commercial stratum. 

Residential strata living includes duplexes, high-rises/low-rises, units, townhouses, or villas.

Commercial strata include offices, factories, retail shops, warehouses, and storage units. The laws that govern strata schemes vary depending on the scheme, but once you buy into one, you are also buying into an owners corporation.  

Meaning of owners corporation

what is strata

The meaning of strata and the meaning of owners corporation go hand-in-hand. An owners corporation is considered the legal entity that is a strata scheme. 

So, an owners corporation consists of every individual that owns their own lot or space in a communal building. Some states also call this collective the body corporate.

All members of the owners corporation have a stake in the ownership and responsibility for the common property that they all share. This mainly includes communal areas such as pools, gardens, stairwells, driveways, lobbies, and other building factors like exteriors and interiors.   

Strata property is the property that is shared by all those who use it in some way. Basically, if you own a piece, you are a part of the larger group.  

What are strata fees?

Strata fees are also called strata levies. They are regular financial contributions that are made by lot owners, their money going towards the necessary maintenance of the strata property. 

The way they are calculated depends on the bylaws for that scheme, but they are typically calculated by the size of the lot that you own, the overall size of the building, how old the building is, and its amenities. 

If you have a larger unit and live in a building that requires regular maintenance, your levy costs are probably going to be on the higher side.

The three main types of strata levies are administrative fund levies, sinking fund levies, and special levies. 

Administrative fund levies

Used to largely cover the daily running of the scheme. Daily costs include things such as gardening, cleaning, utility bills for common areas, and more.

Sinking fund levies

Used when there needs to be a bigger repair or renovation that can potentially change the building’s overall structure.

Special levies

Designed to cover fairly unexpected expenditures. This includes things like covering termite damage or roof replacement. 

Special levies are paid in addition to other contributions.   

what is strata

What are strata bylaws?

Rather than asking ‘what is strata housing,’ you may be better off asking ‘how is strata living possible?’ Sharing spaces with a bunch of other people requires that there be an effort towards harmonious communal living, which is why strata bylaws exist. 

Bylaws focus on a variety of aspects of communal living. There are laws about the garbage disposal, renovations, and even if you are allowed to hang wet clothes on your balcony. 

Every scheme has its own set of bylaws, but they are not allowed to be oppressive or restrict you from having children or animals. 

How do strata schemes work?

What is strata housing and how does strata work are the two most asked questions when it comes to this topic. You may be wondering how a living situation like this one can even function properly.

The answer is strata meetings. This is when actionable decisions about how the scheme is being run are made. There has to be at least one meeting per year – the Annual General Meeting (AGM).

Meetings may be called in the meanwhile, but there have to be special requests to do so or an important reason. Those with bigger lots have more say.

To present an issue at a meeting, you must write to the Strata Secretary where you explain the issue. For approval, there is a minimum number of owners that need to be in attendance.    

Strata committees

A strata committee is supposed to represent the interests of all the lot owners. It maintains integrity by ensuring that strata laws and bylaws are followed. 

The committee must also enforce any decisions that were made previously.

The committee is kind of like a voice for the people when it comes to confronting the administration of your owners corporation.

Any projects, concerns, or issues pass through the committee, so having one foot in can be beneficial for comfortable living. But if you decide to join, you must also be heavily involved in maintaining the lot owners’ best interests.   

what is strata

Managing strata schemes

You will find that depending on the scheme, management can vary. Some strata are self-managed while others are designated a manager. Their job is to reduce the overall stress of running a scheme. 

Managers should arrange repairs, host the AGM, help draft bylaws, prepare finances, and send out levy notices. 

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