30 Sep Does Strata Title Mean Owners Corporation?
Is an owners corporation the same as body corporate? Are they different to strata title, and where does a strata plan come into it? For simple answers, read on.
An owners corporation, sometimes referred to as a body corporate, is occasionally described as a strata title. These are not the same. Strata title and owners corporations are different, but related, concepts.
What is an Owners Corporation?
Land can be subdivided to create separately titled lots with each lot set out in a plan of subdivision. If the plan of subdivision creates common property an owners corporation is created to administer and manage that common property.
Body corporate was the previous term used to refer to what is now an owners corporation. The term body corporate still used in some states but in Victoria the correct term is owners corporation. In some states, though rarely in Victoria, terms such as strata scheme and strata corporation may be used.
An owners corporation is a separate legal entity incorporated on registration of a plan of subdivision which creates common property. It has functions including to:
- manage, administer, repair and maintain common property and associated services;
- effect required insurance;
- undertake administrative duties including maintaining accounting and financial records;
- carry out functions and obligations imposed by any legislation.
The members of the owners corporation are the owners of lots affected by it. These lots are specified in the owners corporation schedule attached to the plan of subdivision. That schedule also sets out the lot liability which is used to apportion expenses and lot entitlement expresses the extent of the lot owner’s interest in the common property affected by the owners corporation.
As a separate legal entity, an owners corporation has perpetual succession (it is not reconstituted on change of membership) and may sue and be sued in its own name.
What is a Strata Title?
Strata title is a term which is used to refer to the title of a lot created by a plan of subdivision which subdivides an existing piece of land. It may refer to any separate lot which may be an apartment, shop, office, warehouse, factory or any other type of lot which may be created by a plan of subdivision.
Although the most familiar form is apartments, strata title can also apply to a townhouse or commercial development which has common property.
An owner of a lot affected by an owners corporation has:
- a title for the lot owned (the strata title);
- an interest in the common property which is managed and administered by the owners corporation.
Do I Need To Join The Owners Corporation?
Owners of lots affected by the owners corporation are the members of it. The purchaser of a lot automatically becomes a member of the owners corporation once the owners corporation is notified of the owners details following settlement of the sale of the lot. No separate application is necessary.
What if I Do not Wish To Join The Owners Corporation?
Membership of the owners corporation is compulsory upon becoming the registered proprietor (owner) a lot and is not possible to resign or leave the membership of the owners corporation unless the plan of subdivision is modified to remove the lot as a member. Apart from any relevant planning considerations which may inhibit this, it requires a unanimous resolution of the owners corporation to alter the membership of the owners corporation.
We get it – strata can be complex. At Turnbull Cook, we strive for simplicity. If you have further questions around strata management, fees & responsibilities, insurance & cleaning plus lots more, read our Strata FAQs.
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