Apartments: Strata Scheme and Owners Corporation
Strata Scheme and Owners Corporation
Prior to purchasing an apartment, it is important that you are aware of the rules relating to Strata Schemes. Properties such as apartments, units, townhouses and retirement villages will generally have Strata titles.
A Strata Scheme essentially means that if you are the owner of part of a property, it will generally include everything that is inside the walls – such as an apartment. Everything else externally is property that is commonly-owned and shared (for example, pathways and corridors). For these areas of property, a fee will be payable by each owner which is a contribution towards the maintenance of these shared areas.
A major advantage to a Strata Scheme is that expenses relating to maintaining or fixing walls or walkways will be shared. However, if the strata arrangement itself is poorly managed, then it may result in much more extensive costs to resolve how the scheme operates and the neglected property.
The ‘Body Corporate’ in NSW is known as the ‘Owners Corporation’. The Owners Corporation is an entity that is composed of all the owners of the lots in a strata scheme. It is the duty of the Owners Corporation to oversee the Strata Scheme for the common property by administering, controlling, maintaining, repairing and managing these areas properly.
Additionally, the body must attend to the financial records and insurances so that the legislation is complied with.
Some responsibilities held by the Owners Corporation include:
A Strata Scheme is an arrangement to share responsibilities for maintenance and repair of common property whilst the Owners Corporation is the body that manages the Strata Scheme. There are many rules and responsibilities that are imposed, therefore, it is essential that you receive legal advice on how you should proceed – such as how to set up a Strata Scheme or Owners Corporation and how it should operate. There are serious legal consequences for failure to meet your obligations.