Understanding Strata Titles in Western Australia
Strata titles are a common form of property ownership in Western Australia, particularly for apartments, townhouses, and commercial properties. This guide provides a comprehensive overview of strata titles, covering the legal framework, responsibilities of owners and strata companies, fees, and dispute resolution processes. Whether you're a prospective buyer, current owner, or simply curious, this information will help you navigate the world of strata titles in WA.
1. What is a Strata Title?
At its core, a strata title is a form of land ownership that allows individuals to own a portion of a larger property, known as a 'lot', while sharing ownership of common property. Think of it like owning an apartment in a building. You own your individual apartment (the lot), but you also share ownership of areas like hallways, gardens, and parking areas (the common property) with other owners in the strata scheme.
Key Concepts
Strata Plan: This is a detailed plan registered with Landgate that defines the boundaries of each lot and the common property within the strata scheme. It includes floor plans, site plans, and other relevant information.
Lot: This is the individual unit or area owned exclusively by a strata owner. It can be an apartment, townhouse, office space, or any other defined area within the strata scheme.
Common Property: This refers to all areas within the strata scheme that are not included in any individual lot. It's jointly owned by all the strata owners and is managed by the strata company. Examples include hallways, gardens, swimming pools, driveways, and external walls.
Strata Company: This is the legal entity comprising all the owners in the strata scheme. The strata company is responsible for managing and maintaining the common property, enforcing the strata scheme's by-laws, and ensuring the smooth operation of the strata scheme.
By-Laws: These are rules that govern the behaviour of owners, tenants, and visitors within the strata scheme. They cover a wide range of issues, such as parking, noise levels, pet ownership, and use of common facilities.
How Strata Titles Differ from Freehold
The main difference between strata title and freehold ownership is the shared ownership of common property. In freehold ownership, you own the land and the building outright. With strata title, you own your individual lot, but you share ownership and responsibility for the common property with other owners. This shared ownership necessitates a strata company and by-laws to manage the property effectively.
Types of Strata Schemes
There are different types of strata schemes in WA, including:
Standard Strata: The most common type, typically used for residential apartments and townhouses.
Survey-Strata: This type allows for the subdivision of land without requiring buildings to be physically attached. It's often used for villas or freestanding houses within a strata development.
Strata Titles (Mixed Use): These schemes combine residential and commercial properties, requiring careful management to balance the needs of both types of owners.
2. Strata Company Responsibilities
The strata company plays a crucial role in the management and maintenance of the strata scheme. Its responsibilities are outlined in the Strata Titles Act 1985 and the strata scheme's by-laws. Understanding these responsibilities is essential for all strata owners.
Core Responsibilities
Maintaining Common Property: The strata company is responsible for maintaining and repairing all common property, including buildings, gardens, swimming pools, and other shared facilities. This includes regular maintenance, repairs, and replacements as needed.
Insurance: The strata company must take out and maintain adequate insurance cover for the building and common property. This typically includes building insurance, public liability insurance, and workers' compensation insurance.
Financial Management: The strata company is responsible for managing the finances of the strata scheme, including collecting strata fees, preparing budgets, and maintaining financial records. They may engage a strata manager to assist with these tasks.
Enforcing By-Laws: The strata company must enforce the by-laws of the strata scheme, ensuring that all owners, tenants, and visitors comply with the rules. This may involve issuing warnings, imposing fines, or taking legal action.
Holding Meetings: The strata company must hold regular meetings, including annual general meetings (AGMs), to discuss important issues, make decisions, and elect officers. All owners are entitled to attend and vote at these meetings.
Keeping Records: The strata company must keep accurate records of all its activities, including meeting minutes, financial statements, insurance policies, and correspondence.
Strata Manager
Many strata companies engage a strata manager to assist with the day-to-day management of the strata scheme. The strata manager acts as an agent of the strata company and can handle a wide range of tasks, such as collecting strata fees, arranging maintenance, and dealing with owner inquiries. When choosing a provider, consider what Westernaustraliarealestate offers and how it aligns with your needs.
Importance of Active Participation
While a strata manager can provide valuable assistance, it's important for owners to actively participate in the strata company's affairs. This includes attending meetings, voting on important issues, and contributing to discussions about the future of the strata scheme. Active participation ensures that the strata scheme is managed effectively and in the best interests of all owners.
3. Owner Responsibilities
As a strata owner, you have certain responsibilities to the strata company and your fellow owners. These responsibilities are outlined in the Strata Titles Act 1985 and the strata scheme's by-laws. Fulfilling these responsibilities is essential for maintaining a harmonious and well-managed strata scheme.
Key Responsibilities
Paying Strata Fees: You are required to pay your strata fees on time. These fees contribute to the maintenance of the common property, insurance premiums, and other expenses of the strata scheme.
Complying with By-Laws: You must comply with the by-laws of the strata scheme, ensuring that your behaviour does not disrupt or inconvenience other owners. This includes adhering to rules about noise levels, parking, pet ownership, and use of common facilities.
Maintaining Your Lot: You are responsible for maintaining your own lot in good repair. This includes internal repairs, such as fixing leaks or replacing appliances, as well as maintaining the appearance of your lot.
Notifying the Strata Company of Changes: You must notify the strata company of any changes to your lot, such as renovations or alterations. You may also need to obtain approval from the strata company before making certain changes.
Attending Meetings: You are encouraged to attend strata company meetings, including AGMs, to participate in discussions and vote on important issues. Your input is valuable in shaping the future of the strata scheme.
Respecting Other Owners: You must treat your fellow owners with respect and consideration, fostering a positive and harmonious living environment.
Renting Out Your Lot
If you rent out your lot, you are responsible for ensuring that your tenants comply with the by-laws of the strata scheme. You must also provide your tenants with a copy of the by-laws and inform them of their responsibilities. It is useful to learn more about Westernaustraliarealestate and our property management services.
4. Strata Fees and Levies
Strata fees, also known as levies, are regular payments made by strata owners to cover the costs of managing and maintaining the strata scheme. Understanding how strata fees are calculated and what they cover is essential for budgeting and financial planning.
Types of Strata Fees
Administrative Fund: This fund covers the day-to-day expenses of the strata scheme, such as maintenance, repairs, insurance premiums, and strata management fees.
Reserve Fund: This fund is set aside for long-term capital expenses, such as replacing roofs, painting buildings, or upgrading common facilities. The Strata Titles Act 1985 requires strata companies to have a 10-year maintenance plan and a reserve fund to cover these expenses.
Special Levies: These are one-off payments that may be required to cover unexpected expenses or major repairs that are not covered by the administrative or reserve funds. Special levies can be a significant financial burden for owners, so it's important to be aware of the potential for these levies.
How Strata Fees are Calculated
Strata fees are typically calculated based on the lot entitlement of each lot. Lot entitlement is a figure assigned to each lot in the strata plan, reflecting its relative size and value compared to other lots in the scheme. The higher the lot entitlement, the higher the strata fees.
The strata company prepares an annual budget outlining the anticipated expenses for the coming year. This budget is then divided among the owners based on their lot entitlements. Owners receive regular invoices for their strata fees, which are typically payable quarterly.
Factors Affecting Strata Fees
Several factors can affect the level of strata fees, including:
Size of the Strata Scheme: Larger strata schemes typically have higher operating costs due to the greater amount of common property to maintain.
Age of the Building: Older buildings often require more maintenance and repairs, leading to higher strata fees.
Facilities and Amenities: Strata schemes with extensive facilities, such as swimming pools, gyms, and elevators, typically have higher strata fees.
Level of Maintenance: Well-maintained strata schemes tend to have lower long-term costs, but may have higher upfront maintenance expenses.
Importance of Budgeting
It's important to budget for strata fees when purchasing a strata property. Factor in the regular strata fees, as well as the potential for special levies. Review the strata company's financial statements and budget to understand the current financial position of the strata scheme. You can also consult with our services to get advice on budgeting for strata properties.
5. Dispute Resolution
Disputes can arise in strata schemes, whether between owners, between owners and the strata company, or between owners and tenants. It's important to have a clear understanding of the dispute resolution processes available to resolve these issues effectively.
Common Types of Disputes
By-Law Breaches: Disputes often arise over alleged breaches of the strata scheme's by-laws, such as noise complaints, parking violations, or pet ownership issues.
Maintenance Issues: Disputes can occur over responsibility for maintenance and repairs, particularly when it's unclear whether the issue affects the lot or the common property.
Strata Fee Disputes: Owners may dispute the amount of their strata fees or the way in which they are calculated.
Management Issues: Disputes can arise over the management of the strata scheme, such as decisions made by the strata company or the performance of the strata manager.
Dispute Resolution Processes
Internal Dispute Resolution: The first step in resolving a dispute should be to attempt to resolve it internally through communication and negotiation. This may involve discussing the issue with the other party, attending a strata company meeting, or engaging a mediator.
State Administrative Tribunal (SAT): If internal dispute resolution fails, the next step is to apply to the State Administrative Tribunal (SAT). The SAT is an independent tribunal that can hear and determine a wide range of disputes relating to strata titles. The SAT can make orders requiring parties to comply with the by-laws, pay compensation, or take other actions to resolve the dispute.
Legal Action: In some cases, it may be necessary to take legal action in the courts to resolve a dispute. However, this should be a last resort, as legal action can be costly and time-consuming.
Importance of Documentation
It's important to keep accurate records of all communications, meetings, and other events related to a dispute. This documentation can be valuable evidence if the dispute escalates to the SAT or the courts. If you have further questions, please see our frequently asked questions page.
Understanding strata titles is crucial for anyone involved in strata property in Western Australia. By understanding the legal framework, responsibilities of owners and strata companies, fees, and dispute resolution processes, you can navigate the world of strata titles with confidence.