In the complex world of real estate, understanding the nuances of property titles is crucial. This article unravels the specifics of Stratum Title and Company Title subdivision in Australia, providing a clear understanding of the stratum title meaning. We’ll break down the legalese, highlight the benefits, drawbacks, and key differences between these titles. Understanding this will enable you to make informed decisions when purchasing property in Australia.
What is Stratum Title?
A Stratum Title, a common form of property ownership in Australia, is a type of title property that allows for individual ownership of part of a property, usually in a multi-storey building, combined with shared ownership in the rest of the property or common areas. Each unit within the building, such as an apartment or townhouse, has its own stratum title.
It’s important for prospective buyers to familiarise themselves with how the owners’ corporation operates, given that it manages the common property areas. Strata management companies usually handle these operations. Key factors to consider while buying a Stratum Title property are by-laws, levies, and strata plans, which outline the exact boundaries of each lot or unit.
How Does Company Title Work?
On the other hand, a Company Title property works on a different mechanism. In this case, the company owns the property, and a person gets to live in it by buying shares in the company, hence “buying into a company title”. The shareholder then has the right to occupy a specific unit within the building. Company share titles are often overseen by a board of directors or a service company.
Stratum vs Company Title: What’s The Difference?
There are several distinguishing features between a stratum title and a company title property. Understanding these differences can help prospective buyers to conduct a strata search as part of their research and choose the best option for them.
The legal ownership structure is the primary difference. A Stratum Title allows for the individual ownership of a unit and shared ownership of common areas. Meanwhile, a Company Title gives a shareholder the right to occupy a unit without conferring individual title units. These titles affect the rights of the title holder, the degree of control they have over their property, and the flexibility they have in selling or altering their property.
Common Property Management
In both stratum and company titles, certain areas of the property are common and shared amongst all occupants. This includes facilities such as gardens, parking lots, stairwells, roofs, and hallways. The body corporate or owners’ corporation manages these common areas. However, in a company title, the service company or board of directors has a say in the management of these areas.
The Importance of Strata Management
The owners’ corporation or body corporate operates through annual general meetings. They appoint a strata management company, which looks after the maintenance of the common property, carries out bylaws, and manages funds. It is vital to understand how this strata management company operates and that the strata plan is being managed properly before buying a stratum property.
Buying into a Company Title Property
If you’re considering buying property through a company, it is essential to check the constitution of the company and understand any limitations there might be. It’s important to conduct thorough research to make sure you’re aware of any legal and financial implications.
Property Types: Houses in Australia vs NSW Stratum Properties
Stratum titles are typically used for apartments or townhouses in Australia. In New South Wales (NSW), you can find stratum titles in various types of properties, including townhouses, villas, and certain types of apartments.
How to Buy a Strata Title Property?
The process of buying a stratum property begins with understanding the specific lot you’re buying. It’s crucial to know which title it comes with, and to understand the strata plan, and by-laws that apply. Before finalising the purchase, prospective buyers should consider obtaining a strata inspection report.
Understanding Torrens Title
In comparison to stratum and company titles, a Torrens title is a system of land registration where the state or territory the property is located in guarantees the title holder’s ownership rights. Torrens titles are usually used for freestanding houses in Australia. They are often preferred for their simplicity compared to stratum and company titles.
Frequently Asked Questions
What is a strata company?
A strata company is a company that is responsible for the management of a strata scheme. Strata schemes are buildings or complexes that are divided into individual units, each with its own owner. The strata company is responsible for the day-to-day management of the strata scheme, including collecting fees, maintaining the common areas, and resolving disputes.
What does stratum title mean in Victoria?
In Victoria, stratum title is a form of property ownership in which a building or complex is divided into individual units, each with its own owner. The units are owned in strata, which means that each owner owns a portion of the land and a portion of the common areas.
What is the difference strata and stratum?
The terms “strata” and “stratum” are often used interchangeably, but they have slightly different meanings. “Strata” is the plural form of “stratum,” which means “layer.” In the context of property ownership, “strata” refers to the individual units that make up a strata scheme. “Stratum” can also refer to the common areas that are shared by all owners in a strata scheme.
What does strata title mean in South Australia?
In South Australia, strata title is also a form of property ownership in which a building or complex is divided into individual units, each with its own owner. The units are owned in strata, which means that each owner owns a portion of the land and a portion of the common areas.
What is the difference between strata and freehold?
The main difference between strata and freehold is that in a strata scheme, each owner owns a portion of the land and a portion of the common areas, while in a freehold property, the owner owns the entire property, including the land and the buildings.
How much are strata fees in Adelaide?
The cost of strata fees in Adelaide varies depending on the size and complexity of the strata scheme. However, as a general rule, strata fees in Adelaide are in the range of $200 to $500 per quarter.
