What Are the Different Types of Strata Property?
When investing in property, you’ll find that many of options belong to a Strata Scheme. But what does this mean?
A Strata Scheme involves the division of a property into ‘Lots’, where each Lot is individually owned. Lot owners are also part-owners of the common areas of the property – things like roofs, driveways and exterior walls. Lot owners automatically become members of the Owners Corporation which manages the scheme and pay levies towards the administration and upkeep of the property.
Strata properties can
be self-managed, or a professional strata manager can be brought in.
Different types of strata property
Strata properties fall into one of three main categories: residential, commercial or mixed use. Each has its own rules and considerations.
Residential Strata Schemes involve residents owning their Lot and a share of the common property including external walls, paths, stairwells and roofs. Examples of residential strata properties include:
- Multi-storey low- or high-rise buildings
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 are becoming increasingly popular for commercial, retail and industrial purposes such as:
- office buildings
- storage units
- retail spaces
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.
Strata schemes can be a mixture of residential and commercial, or commercial and retail, with different lots used for different purposes. This type of scheme can be more complex to manage but is becoming increasingly common as many modern 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 have their differences. Some of these points include:
- Properties are divided into ‘Lots’ (which can be a unit, apartment or house)
- The owner of a Lot owns the interior of their Lot only
- Strata Lots are defined by the building’s boundaries
- Insurance, including public liability insurance, is compulsory
- Typically have lower levies than a community title
- Separate buildings with shared land and facilities such as recreational areas
- Often large estates which can include commercial and residential lots
- Insurance is not compulsory for owners of community 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, while a larger scheme is generally considered to be anything more than 100 Lots.
Different sized schemes have their own challenges. When large strata properties have more than 100 owners there can be a lot of disagreement due to there being so many varied opinions. In these cases, a professional strata manager is particularly beneficial as a mediator and manager.
Conversely, there are special provisions for strata properties with only two owners including both members automatically forming the strata committee, and capital works funds and building insurance being non-compulsory.
Need a strata manager in NSW?
Whatever the size of a strata scheme there are unique challenges and complexities to overcome. A friendly, professional strata manager from Lake Group Strata can take care of all the hard work for you.
We have more than 25 years’ experience providing Strata Management services in the Hunter Valley and greater Newcastle area. Contact your local office in Charlestown or East Maitland to find out more.