Strata v’s Survey-Strata Scheme
Strata Scheme
This is the original form of “strata scheme”, or “strata plan”, commonly known as a “built strata”. At least one building must be shown on these strata plans and the boundaries of the strata lots are defined by reference to the building. The lot boundaries are shown on the floor plan of the strata plan and the wording on the floor plan must be read in conjunction with the sketch to ascertain the lot boundaries.
Survey-Strata Scheme
No buildings are shown on a survey-strata plan, even though there may in fact be buildings on the survey-strata lots. The boundaries of survey-strata lots are surveyed by a licensed land surveyor and shown on the survey-strata plan. The lots on a survey-strata plan look much the same as lots that are shown on surveys (deposited plans, plans and diagrams) for non-strata freehold titles.
What is owned individually and what is common property?
Common property is property which is jointly owned by all of the owners in the strata scheme and is not contained within any lot.
The most common scenario for 2-5 lot single-tier schemes is for the buildings to be individually owned. However, this depends on when he scheme was registered.
To understand what you own, it is essential that you obtain and examine a current copy of your strata plan and seek advice on its interpretation.
Who manages the Scheme?
All owners of lots on the strata/survey-strata plan are automatically members of the strata company. Larger strata schemes often employ strata managers to assist the council to carry out some of the duties of the strata company. Some of the principal duties of strata companies are to:
- enforce the by-laws
- control and manage the common property for the benefit of all proprietors
- Properly maintain and, where necessary, renew and replace the common property, including the fittings and fixtures used in connection with the common property.
What are Strata Levies?
Levies are apportioned in the same proportion that the unit entitlement of each lot bears to the total unit entitlement of the scheme. The strata company can also pass a by-law which allows strata levies to be apportioned on some other basis, which must be specified in the by-law.
If there is no common property, there may be no need to raise levies.
Building Alterations
Part 7 (Division 2) of the Act deals only with building alterations on lots, and not common property. Various local government authorities may also have differing requirements in respect to building approvals.
The term “alterations” is used to cover the construction, alteration or extension of a structure on any lot by the lot owner.
The alterations of any structure on a Strata lot must be approved by the other lot owners in writing or the strata company by a resolution without dissent at a general meeting. There are only limited grounds upon which the owners can object.
In a Survey-Strata scheme, the approval for alterations of any structure on a survey-strata lot is only required to be approved by the other lot owner in a 2 lot scheme or the strata company if carrying out the alterations will breach the open space or plot ratio requirements for the lot.
By-Laws
There are standard By-Laws included in the Act which by default apply to every Strata Scheme in WA. In some schemes the owners may have varied the standard By-Laws or created their own – these should be registered on the Strata Plan.
The Buying process
The process of buying a Strata Lot is similar to buying a traditional freehold (or “Green Title”) property. You just need to be aware that when purchasing a Strata Property you are buying into community living and as such there are additional rules and regulations you need to consider. For example:
- Strata owners share ownership of any common property such as gardens, external walls, roofs, driveways and stairwells, and need to share costs associated with this common property, including repairs and insurance.
- In a freehold lot, there are many things you can do without getting approval from your neighbours – like keeping several dogs or having a late night party. However, most strata schemes will have by-laws in place to ensure that people can live in close quarters with one another as harmoniously as possible.
In May 2020 the Strata Titles Act was amended to make it clearer and fairer for people, professions and industries involved in strata.
Information provided to a buyer must now include details on the strata scheme, in addition to the strata lot they are looking to purchase.
Before the buyer signs the offer and acceptance contract, the seller must provide information including:
- Estimated contributions they will have to pay as their strata levy over a 12-month period.
- The most recent statement of accounts of the strata scheme.
- Any amount already owed to the strata company by the current lot owner.
- The minutes from the most recent Annual General Meeting (AGM) of the strata company or any other general meeting that’s been held since.
- Information about any termination proposal received by the strata company.
This additional information will better enable buyers of strata to:
- Budget for any ongoing scheme costs after purchase (eg. through the strata levies).
- Understand the existing level of cooperation among the strata community and what upcoming costs there might be, such as any major repairs (via the AGM minutes).
- See what the overall financial status of the scheme is looking like (via the statement of accounts).
For more information including retired persons strata schemes go to the Department of Commerce website.
Read all the information carefully and seek advice if you are unsure about any information you receive, by doing so you can make an informed decision about whether or not Strata living is for you.
What are some of the questions you should consider before making an offer to purchase a Strata Titled property??
- What part of the scheme do I own?
- Do the By-Laws suit my intended use?
- If you’re a smoker what restrictions are in place?
- Are there restrictions on age of residents, pet ownership, overnight visitors, noise, etc.?
- Is the body corporate financially viable?
- Is there a healthy amount on hand to cover the day-to-day running of the scheme (e.g. maintenance and insurance)?
- Is there money saved in a Reserve Fund for large future costs (e.g. replacing a lift or resurfacing driveways) or if the other strata owners are keeping their levies up-to-date and paying their share.
- A recent client discovered after settlement that the levies of another Lot were 2 years in arrears and Water Rates were on a payment plan because there was $0 in the Strata bank account.
- Are any major repairs to common property required/planned (e.g. re-roofing, upgrade of elevator/lift, etc.)?
- Does the body corporate have sufficient funds?
- Has a special levy been raised?
- Will you have to contribute to a special/reserve levy?
- Is a 10-year Maintenance Plan in place?
- Is water/electricity separately metered?
- Is the common property insured (and is it adequate)?
- The body corporate (of which a buyer becomes a member after settlement) is potentially liable if someone is injured whilst in/on a common property driveway
- There is nothing in a standard contract that requires common insurance to be in place prior to settlement!
- Are building/contents onthe Lot covered by joint strata insurance?
The above information has been sourced in large part from “A Guide to Strata Titles” – a free publication by Landgate. We strongly recommend you read the Guide in full before considering the purchase of a strata-titled property.