When you buy a unit in a townhouse, apartment building or duplex, you’re becoming part of a strata scheme. If you’re new to the world of strata, you probably find some of the concepts used a bit confusing. Strata title and body corporate are two of the terms that are frequently used in the property industry, and it can be easy to confuse the two, as they tend to be used interchangeably. However, they mean quite different things, and it’s important not to get confused between the two. Before you move into an apartment or unit, make sure you get these terms straight.
What is a strata title?
The term ‘strata title’ was invented right here in Australia, and the concept was then exported to the rest of the world. It’s now widely used in many other countries, as well as becoming increasingly common in Australian cities in recent decades.
The word strata is basically a shorthand term for a multi-level building, and refers to the fact that apartments are generally on different levels in the building, or “strata”. Strata title thus refers to a type of ownership structure that applies when owning a unit that is a small part of a larger building or complex that’s shared by other people. A strata scheme gives equitable ownership to a smaller piece of the overall land which has been subdivided.
Strata schemes include both individual lots and shared (or common) areas that each owner has an equal right to use. The individual lot usually includes the unit owned by a single owner and any balcony or outdoor area that comes with it; while common property includes things like gardens, stairs, roofs, driveways, entrances, lifts, car parks and shared facilities such as pools and gyms.
So, what this essentially means, is that when you buy an apartment or unit, you also buy part of the strata title. You’ll not only own your individual lot, you will also own a relatively equal part of the building as a whole and its facilities and common areas. This is a theoretical ownership rather than a literal one. For instance, each owner does not own say, one twentieth of the driveway, but rather each has an equal right to use the entire driveway.
The whole group of owners is together responsible for the maintenance and upkeep of the common areas of the complex, while each is individually responsible for the maintenance and upkeep of their own unit or apartment.
What is a body corporate?
A body corporate is a way of managing the common areas of the building which are owned under the strata title. Bodies corporate help alleviate the problems that are likely to arise from the involvement of a diverse group of owners trying to manage the strata scheme. The body corporate will manage and resolve issues that occur among lot owners in an equitable
way, as well as taking responsibility for maintaining and insuring the structure of the building and the common property. The body corporate, through an appointed committee, will manage all aspects associated with living in and running a building, including:
- Upkeep and maintenance of common areas
- Financial funding and tasks
- Insurance
- Creating and enforcing by-laws
- Dispute-resolution
- Record-keeping, documentation and administration
Owners need to comply with directives from the body corporate, thus helping people to live together harmoniously, without interfering with the rights of others. The body corporate sets rules for the scheme (called by-laws), which regulate the use of both the units and the common property, and is responsible for enforcing them. This ensures that all owners are able to live peacefully in their own home.
The activities of the body corporate are funded by the group of owners, who all contribute to the applicable costs through the payment of fees (known as levies).
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Why do people get these terms confused?
The terms body corporate and strata title both refer to aspects of unit or apartment ownership, making it common for people to get confused when using them. However, they can’t be used interchangeably as they refer to different aspects of life in a strata scheme.
To sum up, strata title refers to a form of property ownership, whereas body corporate is a way of managing that ownership. Strata refers to ownership; body corporate refers to management.