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COMMUNITY TITLE / STRATA TITLE WHAT IS THE DIFFERENCE?

As conveyancers, we are regularly asked the questionWhat is the difference between a Community Title and Strata Title”.  Here are the comparisons that should assist with this query.

Strata Title

Prior to 1996 properties that were divided into units were set up as Strata Title. A unit in a Strata Plan is defined by the structural sections of the building where the interior linings are owned by the proprietor on the title but the exterior walls and roof of each unit are owned by the Strata Corporation along with the Common Property. The Common Property is usually a shared driveway, service area, gardens, gates and landscaping.

The Strata Corporation is usually administered by a Strata Manager who maintains the maintenance and upkeep of the Common Property and shared components of the land. Articles of the Association are setup either as a standard or particularly for the Strata and are the rules which the Unit owners or Occupants must abide by.

All unit owners are automatically members of the corporation and each year have the right to attend the Annual General Meeting and have a say and a vote for any works that may be required to take place in the future, what insurance is required and all other items that may arise in the general upkeep and management of the Strata Corporation.

Building and Public Liability Insurance is taken out by the Strata Corporation to cover the buildings and the common property over the land. The owners should take out either their own contents insurance or landlords insurance if the property is being rented out.

Each year administration fees are calculated along with a sinking levy (for future maintenance items such as painting) and these contributions are paid by each of the members on a quarterly basis. The contributions are calculated on a unit entitlement value which is usually based on the area or size of each individual unit. Insurance, garden maintenance, driveway and lighting maintenance are some of the items that these fees are paid towards. Water use may also be paid as part of these fees by the Corporation. Water rates are always sent direct to the Owner on an individual unit basis.

Community Title

In 1996 the Community Titles Act came into existence and the Strata Titles Act ceased to be in effect. In a Community Title the land is held similarly to a Strata Unit but the boundaries are not related to the structural sections of the buildings but rather to the land itself. When subdivided in a Community Division the land is divided into Lots (rather than Units) which are specified on the plan. There is still Common Property and this can be a simple as a shared driveway and the service infrastructure or similar to the old Strata Title they can also have landscaping, gates etc.

A Community Corporation is also created which comprises of the registered owners of the Lots and is responsible for the administration the rules of the corporation which are now called By-Laws. These By-Laws are similar to the Articles of the Association but are individual to each Community Corporation.

If the Community Corporation only has two Lots then a Manager is not required and annual meetings are also not required to be held. The owners generally share the cost for the insurance over the common property according to their lot entitlement. In a Community Corporation the Owners are responsible for the maintenance and insurance of any structures on their own Lot. No Owner is required to provide funds for maintenance to other Lot owners buildings

If the Community Corporation is larger two Lots then a Community or Strata Manager (this name has not necessarily changed with the changes to the Act) is usually appointed and they have the same role as with a Strata Corporation in organising the maintenance and insurance of the Common Property. Water use is usually not paid by the Corporation but is paid by the individual owner and is calculated on the Unit Entitlement which is based on the Lot size.

Moiety/Company Title

Just to keep things interesting prior to Strata Titles land such as flats and units were often held in what was called a moiety title. This form of ownership is rare these days but does crop up from time to time. The land is owned by an entity which could be a person or a company and they have a lease over the whole of the land. The ownership of each unit is then setup as an under lease in the individual owners’ names for the portion of the land that they own. Alternatively a company was the registered proprietor on the Title and each owner was granted a share certificate for their portion of the land.

If you need to know more about any of the above ownerships, then please call 08 8333 3525 to discuss these in more detail with your conveyancer.

By Denise McKay

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