What Are the Different Types of Strata Property?
When investing inproperty, you’ll find that many of options belong to a Strata Scheme. But whatdoes this mean?
AStrata Scheme involves the division of a property into ‘Lots’, where each Lotis individually owned. Lot owners are also part-owners of the common areas ofthe property – things like roofs, driveways and exterior walls. Lot ownersautomatically become members of the Owners Corporation which manages the schemeand pay levies towards the administration and upkeep of the property.
Strata properties canbe self-managed, or a professional strata manager can be brought in.
Different types of strata property
Strataproperties fall into one of three main categories: residential, commercial ormixed use. Each has its own rules and considerations.
Residential
Residential Strata Schemesinvolve residents owning their Lot and a share of the common property includingexternal walls, paths, stairwells and roofs. Examples of residential strata propertiesinclude:
- Units
- Townhouses
- Multi-storey low- or high-rise buildings
- Villas
- Duplexes
Residential Strata Schemes also include retirement homes and caravan parks, which can provide extra services like security, recreation facilities and transport.
Commercial, retail and industrial
Strata Schemes arebecoming increasingly popular for commercial, retail and industrial purposessuch as:
- office buildings
- storage units
- factories
- retail spaces
- shops
These enjoy the benefits of residential Strata Schemes, with an external body responsible for the upkeep of common areas, whether that’s landscaping, foyer cleaning or general maintenance.
Mixed use
Strataschemes can be a mixture of residential and commercial, or commercial andretail, with different lots used for different purposes. This type of schemecan be more complex to manage but is becoming increasingly common as manymodern developments include a row of shops or offices below a block of flats.
Strata Schemes vs Community Titles
Strata Schemes and Community Titles both involve collective responsibility for shared property and facilities. They both administer and maintain common property via an Owners Corporation or Community Title Corporation. All decisions regarding the strata or community scheme are made via corporations and committee meetings allowing contribution from all members.
They share some similarities but also havetheir differences. Some of these points include:
Strata Schemes
- Properties are divided into ‘Lots’ (which can be aunit, apartment or house)
- The owner of a Lot owns the interior of their Lotonly
- Strata Lots are defined by the building’sboundaries
- Insurance, including public liabilityinsurance, is compulsory
- Typically have lower levies than a communitytitle
Community Title
- Separate buildings with shared land andfacilities such as recreational areas
- Often large estates which can includecommercial and residential lots
- Insurance is not compulsory for owners ofcommunity title properties
- Stricter by-laws
- Typically has higher levies than strata schemes
Smaller vs larger schemes
Smaller schemes can consist of anything from two Lots, whilea larger scheme is generally considered to be anything more than 100 Lots.
Different sized schemes have their ownchallenges. When large strata properties have more than 100 owners there can bea lot of disagreement due to there being so many varied opinions. In thesecases, a professional strata manager is particularly beneficial as a mediatorand manager.
Conversely, there are special provisions forstrata properties with only two owners including both members automaticallyforming the strata committee, and capital works funds and building insurancebeing non-compulsory.
Need a strata manager in NSW?
Whatever the size of a strata scheme there areunique challenges and complexities to overcome. A friendly, professional stratamanager from Lake Group Strata can take care of all the hard work for you.
We have more than 25 years’ experienceproviding Strata Management services in the Hunter Valley and greater Newcastlearea. Contact your local office in Charlestown or East Maitland to find out more.
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