Multiple resident complexes such as units or apartments are regulated by certain rules so that every homeowner within the complex receives equal rights and obligations. These rules are encompassed under either a Strata Title arrangement or a Community Title scheme.
Strata titles can apply to a range of properties such as apartments, units, townhouses and retirement villages, on the other hand community titles applies to properties consisting of two (2) or more lots with a shared common area.
Strata title applies to properties such as apartments and units whereby a particular unit or apartment is considered to be the internal personal area and the external parts are shared common areas, for instance elevators, stairways and gardens. Residents are generally required to contribute to the maintenance and repair of the shared common areas.
Strata title properties are managed on behalf of apartment owners by Owners Corporations in NSW. They will look after various aspects of the strata title, including:
- Complaints between neighbours for issues such as noise or parking;
- Maintaining financial records; and
- Arranging general meetings with apartment owners.
There is insurance that is payable by residents and parties to a strata arrangement, whereby it will cover public and liability insurance as well as insurance for the shared common areas. Insurance is mandatory with respect to public liability for common areas, whilst the insurance for the contents contained in the personal apartment is covered by the respective individual resident.
Community title applies to land rather than properties, such as a large plot of land that is divided into allotments, for instance a gated community.
A community title arrangement requires:
- The area to be comprised of at least two (2) lots;
- Have common property between them, for instance cables, pipes and plants;
- Contain a community management statement; and
- A body corporate.
Communities titles are managed on behalf of property owners by community title corporations, who perform the same function as Owners Corporations.
In a community title arrangement, each individual owner of their respective lot is responsible for ensuring that there is insurance that covers their lot and building, reason being is that the community insurance only covers common areas – not personal property or lots.
Commonalities Between Strata and Community Titles
There are differences between Strata and Community Titles, however there are also some major commonalities, namely:
- Both schemes can cover shared areas that aren’t exclusive to any resident, such as swimming pools or playgrounds, however there are exceptions such as exclusive access car spaces and rooftop access.
- Maintenance or repair of common areas requires monetary funds, therefore each resident or party to the scheme must contribute to the fund and the contribution to the fund will be proportionate to the value of their respective apartment – for example, a larger apartment will contribute a larger amount.
- Decisions require a meeting so that each member has an opportunity to provide their input.
- A general meeting is held annually that provides transparency as the body administering the strata or community title will discuss their plans, including budget allocation and finances.
How We Can Help You
It is sometimes difficult to foresee the potential complications that may emerge when you are purchasing a property that consists of either scheme, which is why it is important that you speak with JB Solicitors as we can assist you in all aspects of your matter.