Structure of Strata Scheme
Strata Plan & Survey Strata Scheme
Two types of freehold schemes are permitted under the Act, strata schemes and survey-strata schemes.
The comments in this guide apply to both strata schemes and survey-strata schemes, unless indicated otherwise.
The plan of subdivision for the scheme determines if the scheme is a strata, survey-strata, leasehold or single-tier scheme.
Strata Plans
Strata plans are the original form of a subdivision plan for a scheme, commonly known as built strata. At least one building must be shown on the strata plan. The boundaries of the strata lots, including the height of the lots (stratum), are defined by reference to the building. Prior to 30 June 1985, lots could only be cubic spaces within a building. After that date, part of the lot could also be the land outside the building and include the external surfaces of the building structure.
A strata plan has four parts to it including the floor plan, location plan, the record of interests and encumbrances the Registrar of Titles registers or records for the scheme (for example, amendments to scheme by-laws) and the schedule of unit entitlements.
The lot boundaries are shown on the floor plan of the strata plan. The wording on the floor plan must be read in conjunction with the graphics on the floor plan to ascertain the lot boundaries.
The location plan locates the building in relation to the parcel boundary. The parcel is the freehold lot that is the subject of the strata plan of subdivision.
In a strata scheme, common property is the part of the land subdivided by the strata scheme that does not form part of a lot. It is not separately identified on the plan. It may include the parts of a scheme building that do not form part of a lot.
Survey-strata plans
A survey-strata plan has three parts, the part showing the lots and common property, the record of interests and encumbrances and the schedule of unit entitlements.
No buildings are shown on a survey-strata plan, even though there may, in fact, be buildings on the survey-strata lots. The boundaries of survey-strata lots are surveyed by a licensed land surveyor and shown on the survey-strata plan. The lots on a survey-strata plan look much the same as lots that are shown on deposited plans, plans and diagrams for non-strata freehold titles.
Survey-strata lots may or may not be limited in height. The height of a lot may be limited, for example, to protect a neighbour’s view. If there is a height limitation, it will be shown on the survey-strata plan and referenced to the Australian Height Datum (AHD).
Survey-strata plans may have a common property. If there is any common property on the survey-strata plan it must be unambiguously shown as common property and have its own unique number.
Leasehold Schemes
Leasehold schemes are a new form of land tenure introduced by the Strata Titles Amendment Act 2018. A leasehold scheme is essentially a strata or survey-strata scheme set up for a fixed term of 20 to 99 years.
The majority of the Strata Titles Act 1985 applies to leasehold schemes in the same way as it applies to freehold schemes. Leasehold schemes can be strata (built strata) or survey-strata schemes. The scheme plan will indicate if the scheme is leasehold. The scheme, all lots in the scheme and the strata leases for each of the lots, all expire on the same expiry day. The owner of a lot in a leasehold scheme has a long-term lease of a lot (a strata lease), which they can transfer and mortgage without the lessor’s consent, the lessor being the owner of the parent parcel of land. In leasehold schemes:
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A lot will have its own certificate of title
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There will be a separate certificate of title for the original parcel of land (for the owner of the leasehold scheme/lessor) over which the leasehold scheme operates. This is different to freehold strata/survey-strata scheme, where the certificate of title for the parcel is cancelled on registration of the scheme.
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The scheme is created for a fixed term (a minimum of 20 years to a maximum of 99 years)
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The expiry day of the scheme may be postponed to a later date, if the scheme by-laws allow, and provided the later date is not more than 99 years after registration of the scheme
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People can buy, sell and mortgage a lot
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An owner of a lot (lessee) can sell the lot without needing the consent of the owner of the leasehold scheme
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(lessor)
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The owner of the leasehold scheme is entitled to take back the land upon expiry or termination of the scheme.
Leasehold schemes give the owner of the leasehold scheme an opportunity to develop the land, which they otherwise wouldn’t or couldn’t develop. This is of particular benefit to organisations such as churches and universities if they want to retain ownership of their land and make it available for development. Leasehold schemes also offer an alternative form of tenure for retirement villages.
Single Tier Strata Schemes
Single tier strata schemes are strata schemes where no lot is above another lot, that is, the floor of one lot cannot form part or all of the ceiling of another lot. Multi-storey blocks of flats/units are not single tier strata schemes, but a two-storey unit such as a townhouse/villa can be part of a single-tier strata scheme.
In some circumstances, the Act allows a strata scheme to be a single tier strata scheme, even if parts of lots, such as
balconies, or other parts of buildings overhang other lots. These overhangs are called Permitted Boundary Deviations, as specified in Schedule 2A clause 3 of the Act and Schedule 1 clause 3 of the Strata Titles (General) Regulations 2019 (STGR 2019).
Lot boundaries in a single tier strata scheme may be the external surfaces of the building shown on the floor plan. This includes things that project from or are attached to the building and are described in STGR 2019.
The insurance arrangements for single-tier strata schemes are different from those of other strata schemes and are detailed in Schedule 2A Part 5 of the Act.
Managing a Strata Scheme
Running a strata titles scheme
For a strata titles scheme to run effectively, a strata company relies on a set of rules (known as scheme by-laws) which guide matters such as the holding of regular meetings, robust financial management, and other associated processes. The best outcomes occur when all owners are engaged in the governance and management of their scheme.
With the introduction of attendance and voting via electronic means, owners can exercise their rights regardless of their location or the demands on their time. The key principles underpinning the processes necessary to run a strata titles scheme are outlined in this section.