The History of Strata Title

What is Strata?

Strata title is a form of ownership devised for multi-level apartment blocks and horizontal subdivisions with shared areas. The word “strata” as it relates to property refers to apartments being on different levels.

While the term ‘strata’ in Australia has come to be synonymous with living in apartments, surprisingly this method of communal ownership of property is a relatively new phenomenon and was actually pioneered in Australia.

Company Title vs Strata Title

Before strata-titling, ownership of apartments, units etc. predominantly fell under ‘company title.’

Under this method, a company would own the building and a buyer would purchase shares into the company that entitled them to live in a specified apartment.

The key flaw with ‘company title’ was that it did not confer separate ownership of your apartment or lot.

This was seen as a risk by financial institutions who would be reluctant to lend money to such purchasers and usually charged higher interest rates as well. Some older buildings remain under company title, but it’s increasingly rare.

Strata title in Australia

Company title conditions made it difficult for real estate developers to build and market large residential projects, so in the early 60s the New South Wales Government introduced legislation that aimed to facilitate apartment ownership.

The Conveyancing (Strata Titles) Act 1961 came into force in July 1961. A few weeks later the first Strata Plan in the world was registered for a block of 18 units in the suburb of Burwood.

The most substantial element of the new legislation allowed each lot or apartment to have its own title deed, allowing it to be bought, sold, rented out or mortgaged without any consent being needed subsequently giving the banks much needed security for lending.

Around Australia, other state and territory governments followed the example set by New South Wales and passed their own strata-title legislation.

Strata titling had many positives especially when it came to transparency and fairness compared to company title, where everything operates through the Board of Directors who don’t have to consult shareholders, even on major issues.

Conversely, by collectively managing the property through a Body Corporate (also known as an Owners Corporation), strata title allows owners to have a say on how their property is managed as well as set reasonable rules and guidelines for living at the property supported by legislation.

Strata Title Schemes have been used successfully in many different residential settings, including residential complexes, serviced apartments, retirement villages and caravan parks.

You will also find strata schemes in industrial complexes, commercial buildings and retail precincts.

Although it is still a very imperfect system, there is common agreement that strata title is generally superior and more equitable than company title.

Since it was introduced in 1961 many other countries have adopted the Australian system (or a similar system) of apartment ownership including Canada, Fiji, India, Indonesia, Malaysia, New Zealand, the Philippines, Singapore, South Africa and the United Arab Emirates.

In Australia, strata living is growing in prominence and it is estimated that approximately 17 percent of the population live in strata title properties.

Data revealed in the June 2020 Australasian Strata Insights Report found there are around 340,601 strata schemes in Australia, with 2,869,845 lots—an average of 8.4 lots per strata scheme.

A massive 54% of these schemes were registered after 2000.

The increasing popularity of strata title has been driven by a few main factors:

  • conversion of existing buildings to strata title
  • Australia’s population growth
  • new development and
  • government policies to promote higher density living and reduce urban sprawl (building up rather than out)

From humble beginnings in a few urban areas of NSW in the 1960’s, strata developments are now an important feature of the housing landscape in Australia and around the world.

When done right, strata living is convenient, cost-effective and can provide local access and services to residents that they would not get in a free-standing home or company title property.

If current trends persist, we can expect strata developments to play an essential role in urban development for many years to come.

Strata title pros:

  • considered a fair, transparent and equitable system.
  • A surveyed structural diagram clearly shows which parts of the property are common and which are owned by individuals.
  • Owners get have a say on decision making

Strata title cons:

  • Owners are required to pay levies, adhere to bylaws and vote at meetings.
  • As an owner in a strata title building you also have a share of the liability for anything that goes wrong


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