A strata scheme is a legal subdivision that creates individually owned lots and shared common property, managed collectively by an owners corporation. Strata title was developed in Australia to allow individual ownership within multi-occupancy developments while keeping shared ownership of common parts — and the statutory framework that governs it differs by state.
Three things every buyer must grasp immediately:
- Common property includes external walls, foyers, lifts, driveways, roofs, gardens, and any area not within a privately owned lot. You share ownership of all of it with every other lot owner.
- Owner responsibilities include paying levies, complying with by-laws, and maintaining the interior of your lot. The owners corporation handles everything outside your lot boundaries.
- By-law enforcement sits with the owners corporation, which can issue notices, impose fines (where permitted by state law), and refer persistent breaches to a state tribunal.
Key takeaways
A strata scheme gives you individual ownership of a lot and shared ownership of common property, governed by an owners corporation whose financial health and by-laws directly affect the value and liveability of your purchase.
| Point | Details |
|---|---|
| Lots vs common property | You own your lot outright; external walls, roofs, foyers, and gardens are shared and managed by the owners corporation. |
| Owners corporation membership | Membership is automatic on settlement; you pay levies, vote at meetings, and are bound by by-laws from day one. |
| Capital works fund health | A fund balance well below the 10-year forecast signals deferred maintenance and potential special levies you will inherit. |
| By-law constraints | Check registered by-laws before exchange if you plan to keep a pet, renovate, or run a short-term rental. |
| Sydney Property Buyers | Provides strata document review, sinking-fund assessment, and negotiation informed by due-diligence findings for Sydney buyers. |
Table of Contents
- What do you actually own in a strata scheme?
- How is a strata scheme governed?
- What are the rules for living in a strata property?
- What does strata living cost, and what do levies cover?
- Which documents should you request before buying into strata?
- Are there different types of strata schemes?
- Pre-purchase checklist for buying a strata property
- How are strata disputes resolved?
- How do strata laws differ across Australian states?
- How a buyer’s agent helps when purchasing a strata property
- What strata really means for Sydney buyers
- Sydney Property Buyers: expert strata due diligence for Sydney buyers
- Sources
What do you actually own in a strata scheme?
A strata scheme divides a parcel into lots and common property; the strata plan defines lot boundaries and what counts as common property. A lot is the privately owned part — typically an apartment, townhouse, garage, or storeroom. What sits inside your lot boundaries is yours: internal walls, floor coverings, fixtures, and fittings. What sits outside those boundaries belongs to everyone.
Common property typically includes:
- External walls, windows, and doors
- Roofs, foundations, and structural elements
- Foyers, stairwells, corridors, and lifts
- Driveways, car parks (unless titled as separate lots), and visitor parking
- Gardens, pools, and shared recreational areas
Unit entitlements are the numbers assigned to each lot on the strata plan. They determine two things: how much of the levy you pay, and how much voting weight you carry at meetings. A lot with a higher unit entitlement pays more in levies and holds more votes. This matters when a scheme is considering a major capital works project or a contentious by-law change.
A practical boundary example: the internal face of an external wall is common property in most schemes. If that wall leaks, the owners corporation pays for the repair. If your internal plasterboard is damaged as a result, you may need to claim on your own contents insurance. Getting this boundary wrong is one of the most common sources of dispute between lot owners and owners corporations.
How is a strata scheme governed?
An owners corporation is automatically created when a strata plan is registered; every lot owner becomes a member on settlement, with no opt-out. The corporation is a legal entity that can sue and be sued, enter contracts, and hold insurance policies.
Statutory duties include repairing and maintaining common property, taking out building and public liability insurance, managing finances, keeping records, and enforcing by-laws. Larger or “prescribed” owners corporations face higher reporting obligations, including independent audits and formal maintenance plans.
The governance lifecycle runs like this:
- Plan registration — the developer lodges the strata plan with the relevant state land titles office, which triggers automatic creation of the owners corporation.
- First AGM — held within a set period after registration; levies are struck, insurance is confirmed, and a committee is elected.
- Committee formation — elected lot owners take on roles such as chairperson, secretary, and treasurer. The committee handles day-to-day decisions between general meetings.
- Ongoing meetings — the AGM is held annually; extraordinary general meetings can be called for urgent matters. Resolutions are passed by ordinary majority, special resolution (typically 75% of votes), or unanimous resolution depending on the significance of the decision.
- Levy collection and expenditure — levies are struck at the AGM and paid quarterly; funds are held in administrative and capital works accounts.
Resolution thresholds matter. Routine maintenance decisions pass by ordinary majority. Changing by-laws, approving major capital works, or granting exclusive-use rights typically require a special resolution. Terminating a strata scheme generally requires unanimous agreement.
Pro Tip: Before exchanging contracts, request the last two years of AGM and committee meeting minutes. Minutes reveal disputes, deferred maintenance decisions, and whether the committee is functioning. A scheme with no recorded meetings is a red flag, not a sign of harmony.
What are the rules for living in a strata property?
By-laws are the rules that govern behaviour within a strata scheme. They bind every lot owner and every tenant. Tenants are not members of the owners corporation but must comply with the scheme’s by-laws while renting, in addition to their obligations under tenancy law.
Common areas covered by by-laws include:
- Noise — quiet hours, restrictions on musical instruments, and amplified sound
- Pets — some schemes permit pets with written approval; others prohibit them entirely or restrict by size or species
- Parking — visitor spaces, storage of trailers or boats, and use of common driveways
- Balconies and common areas — restrictions on hanging laundry, storing items, or installing outdoor furniture visible from the street
- Renovations — cosmetic works may be self-approved; structural or waterproofing works almost always require owners corporation consent and sometimes a special resolution
Getting approval for a renovation typically means submitting a written request to the owners corporation or strata manager, providing plans and contractor details, and waiting for a committee or general meeting decision. Non-compliance can result in a formal notice to comply, a fine, or an order from the state tribunal requiring you to undo the work at your own cost.
Pro Tip: If you are renting a strata property, ask the agent for a copy of the by-laws before signing the lease. A no-pets clause or a prohibition on short-term letting can directly affect how you intend to use the property.
What does strata living cost, and what do levies cover?
Strata levies fund the ongoing operation and long-term maintenance of the scheme. There are three main types:
| Levy type | What it funds | Key buyer check |
|---|---|---|
| Administrative (ordinary) levy | Day-to-day expenses: cleaning, gardening, utilities for common areas, strata management fees, insurance premiums | Is the fund solvent? Are levies keeping pace with actual costs? |
| Capital works (sinking) fund levy | Long-term repairs and replacements: roof, lifts, façade, pool, driveways | Is the fund adequately funded relative to the 10-year forecast? |
| Special levy | One-off works not covered by existing funds: emergency repairs, deferred maintenance catch-up | Has a special levy been raised recently, or is one proposed? |
The owners corporation is required to hold building insurance covering the structure and common property, plus public liability insurance. Individual lot owners are responsible for insuring their own contents and any fixtures or improvements within the lot that are not covered by the building policy. Check the insurance certificate of currency and confirm the sum insured is current.
A well-funded capital works account is one of the clearest indicators of a well-run scheme. Repeated special levies, or a sinking fund that is chronically low relative to the forecast, suggest deferred maintenance. Larger or prescribed owners corporations are required to commission formal maintenance plans and, in some states, have their accounts independently audited.
Special levies are not inherently a problem, but a pattern of them is. One special levy for an unexpected storm repair is normal. Three special levies in five years for the same roof suggests the capital works fund has been chronically underfunded.
Which documents should you request before buying into strata?
The strata plan and schedule of unit entitlements are the foundation documents. The plan shows lot boundaries and common property; the schedule shows each lot’s entitlement and therefore its levy share and voting weight. These documents, together with the by-laws and scheme notice, define lot boundaries, entitlements, and scheme rules.
A property title search will confirm the registered owner, any encumbrances, and whether the lot is part of a leasehold strata scheme.
| Document | What it tells you |
|---|---|
| Strata plan | Lot boundaries, common property, and building layout |
| Schedule of unit entitlements | Your levy share and voting weight relative to other lots |
| By-laws (registered and any amendments) | Rules governing your use of the lot and common property |
| AGM and committee minutes (last 2 years) | Disputes, deferred maintenance, committee functioning |
| Financial statements | Fund balances, levy arrears, and expenditure history |
| Capital works fund forecast | Projected major expenses and whether the fund is adequate |
| Insurance certificate of currency | Building coverage, sum insured, and any claims history |
| Owners corporation certificate | Confirms levies owing, any special levies proposed, and outstanding notices |
The owners corporation certificate is particularly important: it is a point-in-time snapshot of the scheme’s financial position and any known liabilities. In most states, the vendor is required to provide one as part of the contract of sale. Read it carefully before exchange.
Are there different types of strata schemes?
Not all strata schemes follow the standard built-strata model. Knowing the type affects your rights and the obligations that apply.
- Built strata — the standard model: lot boundaries are defined by reference to building elements (floors, walls, ceilings). Most apartments and townhouse complexes fall into this category.
- Survey-strata — lot boundaries are defined by survey measurements on the ground, not by building elements. Common in Western Australia for grouped dwellings and townhouses where each lot has its own land area.
- Leasehold strata — lots are held under a long-term lease rather than freehold title. The scheme includes a strata lease for each lot. Less common, but found in some retirement villages and resort developments.
- Two-lot schemes — a scheme with only two lots. Many states grant exemptions from certain obligations (no requirement for a sinking fund, reduced record-keeping). Buyers should still check the by-laws and confirm insurance is in place.
- Services-only schemes — created to manage shared infrastructure (roads, drainage) within a broader development. Often found in mixed retail and residential developments or large master-planned estates.
Retirement villages and mixed-use developments frequently use non-standard arrangements. Always confirm the scheme type before assuming standard rules apply.
Pre-purchase checklist for buying a strata property
A methodical approach to strata due diligence takes less time than most buyers expect and can save considerably more. Work through these steps before going unconditional:
- Request the full document set — strata plan, schedule of unit entitlements, registered by-laws, last two years of minutes, financial statements, capital works fund forecast, insurance certificate, and owners corporation certificate.
- Read the minutes carefully — look for unresolved disputes, deferred maintenance items, complaints about specific lots, and any proposals for special levies or major works.
- Assess the capital works fund — compare the current balance against the 10-year forecast. A fund that is significantly below forecast is a financial risk you will inherit.
- Inspect common areas in person — look for signs of water ingress, cracking, lift condition, roof condition, and the general standard of maintenance. What you see tells you more than any document.
- Check insurance and claims history — confirm the building is insured to full replacement value and ask whether any claims have been made in the last five years.
- Confirm by-law constraints against your intended use — if you plan to keep a pet, run a short-term rental, or renovate, verify the by-laws permit it before you buy.
- Obtain a strata report — a professional strata inspector will review all documents and flag risks you may miss.
Pro Tip: The owners corporation certificate confirms levies owing at a point in time, but it does not capture informal discussions about upcoming special levies. Ask the strata manager directly whether any major works are being considered that have not yet been formally resolved.
Common warning signs that warrant a deeper technical inspection or specialist advice:
- Large recent special levies with no clear explanation in the minutes
- Minutes showing the same maintenance issue raised across multiple meetings without resolution
- Insurance claims for water damage or structural defects
- A capital works fund balance well below the forecast requirement
- No professional strata manager engaged for a scheme with four or more lots
How are strata disputes resolved?
Disputes in strata schemes fall into a few recurring categories: by-law breaches (noise, unauthorised renovations, parking), unpaid levies, disagreements over repair obligations, and neighbour conflicts. Most can be resolved without going to a tribunal, but knowing the pathway matters.
Internal options come first. The owners corporation can issue a formal notice to comply, impose a fine where state law permits, and engage a strata manager to mediate. Many disputes resolve at this stage, particularly when the by-law breach is unambiguous.
External pathways vary by state but follow a broadly similar structure:
- NSW — the NSW Civil and Administrative Tribunal (NCAT) handles strata disputes; NSW Government strata guidance provides forms and procedural information.
- Victoria — Victorian Civil and Administrative Tribunal (VCAT) handles owners corporation disputes.
- Queensland — the Queensland Civil and Administrative Tribunal (QCAT) handles body corporate disputes; the Office of the Commissioner for Body Corporate and Community Management offers free dispute resolution services.
- Western Australia — the State Administrative Tribunal (SAT) handles strata disputes; Landgate provides guidance on the process.
- South Australia, Tasmania, ACT, NT — each has its own tribunal or magistrates court pathway; check the relevant state regulator.
Mediation is typically required before a tribunal will hear a dispute. Keep a written record of every complaint, notice, and response from the outset.
Pro Tip: Photograph every defect and date every written communication. Tribunals rely heavily on documentary evidence, and a well-organised file of photos, emails, and meeting minutes will carry more weight than verbal accounts.
How do strata laws differ across Australian states?
Strata law is state-based. The state or territory in which the strata plan is registered governs the scheme, regardless of where the buyer lives. Rules on by-laws, levy obligations, committee structures, and dispute resolution all differ between jurisdictions.
Key state resources to consult:
- NSW — NSW Government strata portal: covers the Strata Schemes Management Act 2015 and Strata Schemes Development Act 2015, with practical guides and tribunal links.
- Victoria — Consumer Affairs Victoria and LawHub Victoria: covers the Owners Corporations Act 2006 and tier-based obligations for larger schemes.
- Queensland — Office of the Commissioner for Body Corporate and Community Management: covers the Body Corporate and Community Management Act 1997 and free dispute resolution.
- Western Australia — Landgate: covers the Strata Titles Act 1985 (as amended 2020) with factsheets and buyer guides.
- South Australia — Consumer and Business Services SA: covers the Community Titles Act 1996.
- Tasmania — Consumer, Building and Occupational Services: covers the Strata Titles Act 1998.
- ACT — ACT Civil and Administrative Tribunal and Access Canberra: covers the Unit Titles (Management) Act 2011.
- Northern Territory — NT Consumer Affairs: covers the Unit Title Schemes Act 2009.
| State/Territory | Primary regulator | Key buyer check |
|---|---|---|
| NSW | NSW Fair Trading / NSW Government strata portal | Strata Schemes Management Act 2015; NCAT for disputes |
| Victoria | Consumer Affairs Victoria | Tier-based levy and audit obligations; VCAT for disputes |
| Queensland | Body Corporate Commissioner | Free mediation service; BCCM Act scheme types |
| Western Australia | Landgate | Survey-strata vs built strata distinction; SAT for disputes |
| South Australia | Consumer and Business Services SA | Community Titles Act; scheme documents |
| Tasmania | Consumer, Building and Occupational Services | Strata Titles Act; small-scheme exemptions |
| ACT | Access Canberra | Unit Titles (Management) Act; executive committee rules |
| NT | NT Consumer Affairs | Unit Title Schemes Act; dispute pathways |
Always use the regulator for the state where the plan is registered, not where you live.
How a buyer’s agent helps when purchasing a strata property
Strata due diligence is one of the areas where professional representation makes the clearest practical difference. A buyer’s agent with strata experience does not just read documents; they know what to look for and how findings affect negotiation.
Services relevant to a strata purchase include:
- Obtaining and interpreting the full strata document set, including minutes, financial statements, and capital works forecasts
- Assessing whether the sinking fund is adequately funded relative to the scheme’s age and condition
- Identifying by-law constraints that affect the buyer’s intended use (short-term letting, pets, renovation plans)
- Conducting independent inspections of common property outside standard open-home schedules
- Using strata findings to negotiate price adjustments or vendor undertakings before exchange
- Coordinating with conveyancers and strata inspectors to ensure nothing is missed before going unconditional
In practice, strata findings regularly change negotiation strategy. A scheme with a chronically underfunded capital works account, or minutes showing a disputed lift replacement that has been deferred for three years, gives a buyer’s agent concrete grounds to negotiate a lower purchase price or request a price reduction to offset the buyer’s share of the anticipated special levy.
Understanding the full scope of buyer’s agent property assessments helps buyers see how strata-specific checks fit within a broader due-diligence framework. The buyer’s agent role in checking strata records is particularly relevant for Sydney buyers where strata properties represent a large share of the market.
Pro Tip: Engage a buyer’s agent before you make an offer, not after. Early document checks can reveal issues that change your offer price or, in some cases, save you from a purchase that looks attractive on the surface but carries significant hidden liability.
What strata really means for Sydney buyers
Strata schemes make up a substantial proportion of Sydney’s property market, particularly across the Inner West, Eastern Suburbs, Lower North Shore, and Eastern Beaches. The legal framework is well-established, but the practical reality of buying into a strata scheme is more nuanced than most buyers anticipate.
The most common mistake is treating a strata purchase as equivalent to buying a freehold house. It is not. You are buying into a community with its own governance structure, financial obligations, and rules. The quality of that community, and the financial health of the scheme, matters as much as the physical condition of the lot itself.
What I see repeatedly in Sydney strata purchases is buyers who focus entirely on the apartment and overlook the scheme. A beautifully renovated unit in a building with a depleted capital works fund and a committee that cannot agree on anything is a liability dressed as an asset. The minutes tell you more about a building’s future than any building inspection report.
The other thing buyers consistently underestimate is the by-law risk. A buyer who plans to run a short-term rental, keep a large dog, or undertake a significant renovation needs to verify those intentions against the registered by-laws before exchange, not after. Verbal assurances from a selling agent carry no legal weight once you are bound by the scheme’s rules.
Sydney Property Buyers: expert strata due diligence for Sydney buyers
Buying a strata property in Sydney involves a level of document review and financial analysis that goes well beyond a standard building inspection. Sydney Property Buyers provides full-service representation covering strata document review, independent common-property inspections, sinking-fund assessment, and negotiation informed by what the records actually show.
Whether you need full-service acquisition or negotiation-only representation for a property you have already identified, the process starts with a conversation. Visit the services page or call 1800 676 177 to discuss your strata purchase.
Sources
Use the regulator for the state where the strata plan is registered. These are the primary sources for legal accuracy and tribunal access:
- What is an owners corporation? | Consumer Affairs Victoria
- Responsibilities of owners corporations | LawHub (Victoria)
- Understanding the basics of strata — fact sheet | Landgate WA
- Strata | Tenants’ Union factsheet
- Strata information | NSW Government
- Academic overview of strata title development | Griffith University research repository
If you are unsure which state’s rules apply, check the strata plan registration number and the state land titles office where it was lodged. That state’s legislation and regulator govern the scheme.
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- What is a strata report? A buyer’s guide for 2026
- Why a buyer’s agent checks strata records in Sydney
- What is a special levy in strata? Your 2026 guide
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