Strata Schemes. Get the low down.

If you own an apartment or townhouse, you probably know that you are part of a strata scheme. In Sydney, over half of residential sales and leases involve strata. But what exactly is strata, and what rights and responsibilities does a strata scheme entail?

What is Strata Title?

Strata Title includes the right to two primary rights:

• the entitlement to individual ownership of your Lot within the strata scheme, and
• the entitlement to shared ownership of Common Property, such as the garden, stairwells, driveway and foyer. The body which governs the shared ownership of common property is called the Owners Corporation.

Requirements of a Strata Scheme

Under the Strata Schemes Management Act 1996 (NSW) and the Strata Schemes Management Regulation 2010 (NSW), all Strata Schemes must have the following elements.

• A registered surveyor must draw up a subdivision of the land. The survey must show the lots and the common property.
• An Owners Corporation must be established to manage the Strata Scheme. Management includes ensuring that the Lots and Common Property are maintained, repaired, or renewed. Safety devices and inspections must also be arranged for by the Owners Corporation. Usually, an Executive Committee, or an agent is tasked with administering the strata scheme.
• An administrative fund and a sinking fund for the Owners Corporation must be established. The purpose of both these funds is to allow the Owners Corporation to have funds to undertake management and maintenance. The funds are drawn from levies paid by every Lot owner.
• Insurance must be arranged by the Owners Corporation to cover the building.
• Records and accounts must be kept by the Owners Corporation.

By-Laws

Once a Strata Scheme has been established, by-laws take effect to define the rights and responsibilities of all parties in a strata scheme. The Model by-laws, which apply by default, are prescribed in the Strata Schemes Management Regulation 2010, Schedule 2. These include provisions governing:

• Noise,
• Vehicles,
• Obstruction of common property,
• Damage to lawns and plants on the common property,
• Damage to common property,
• Behaviour of owners and occupiers,
• Children playing on common property in building
• Behaviour of invited persons on Lots,
• Deposit of rubbish or other material on common property,
• Hanging out washing,
• Preservation of fire safety,
• Cleaning windows and doors,
• Storage of inflammable liquids and other substances and materials,
• Floor coverings, and changes to floor coverings and surfaces,
• Garbage disposal,
• Keeping of animals,
• Appearance of Lots,
• Notification of change in use of a Lot,
• Provision of amenities or services,
• Compliance with planning and other requirements,
• Service of documents.

These Model by-laws can be amended or added to by the Owners Corporation. Common modifications include:

• Safety and security measures,
• Details of any common property of which the use is restricted,
• The keeping of pets,
• Parking,
• Floor coverings,
• Garbage disposal,
• Behaviour,
• Architectural and landscaping guidelines to be observed by lot owners,
• Matters appropriate to the type of strata scheme concerned.

Setting up a Strata Scheme can be a complex and often daunting endeavour. It is essential that you know the that the rights and responsibilities of tenants and Owners Corporation are clearly defined.

If you have further questions, please contact us at frank@franklaw.com.au

This is not legal advice.