How does strata titling work?
A strata title is different to the freehold title you might hold over a house, which would allow you to own every part of that lot. Instead, strata titles provide for grouped housing, usually with common facilities, such as bores, gardens and swimming pools that are shared by residents. A strata title has to be registered with Landgate, the WA agency charged with administering theStrata Titles Act 1985 (WA).
What is a strata company?
The Strata Company comes into existence automatically on the registration of the strata plan when titles are issued. Other than holding the first annual general meeting, no expenditure, or action by the owners is required to form it. All owners of lots in the strata plan are automatically members of the Strata Company.
Some of the principal duties of strata companies are to:
- enforce the by-laws;
- control and manage the common property for the benefit of all proprietors;
- properly maintain and, where necessary, renew and replace the common property, including the fittings and fixtures used in connection with the common property.
What is the Council of Owners?
If it is impractical for all members of the Strata Company to carry out all the day-to-day activities required to control and manage the property, a Council of Owners can be elected to take the lead in this role. The Strata Company will then be run by the council in accordance with the conditions specified in the Strata Titles Act, the by-laws in force for the strata scheme at that time and subject to any restriction imposed or direction given at a general meeting of the Strata Company.
What does a strata manager do?
Strata managers are often engaged to assist the council of owners carry out some of the duties of the strata company. The strata manager works for the Strata Company and the only powers the manager has are those given by Strata Company. Generally, the strata manager cannot make decisions on the Company’s behalf and cannot do anything that requires a resolution of the Strata Company.
What are the strata by-laws?
There are standard by-laws that apply to all new and existing Strata Companies from the time that a plan is registered. These by-laws are published in two ‘schedules’ (schedule 1 and schedule 2) by Landgate and can be found here: . Strata Companies are able to make new by-laws for their complexes.
How can strata by-laws be changed?
Schedule 1 by-laws can be made, amended or repealed by a resolution that does not receive any dissent (no objections) at a general meeting of the Strata Company. In this case, the owners (or their proxies) of at least half of the units, and who have at least half of the unit entitlements, must be at the meeting, and no owner votes against the resolution.
Schedule 2 by-laws can be made, amended or repealed by what is known as a special resolution. In this case, the owners who vote in favour of the resolution must have at least half the lots or half the unit entitlement in the scheme. Those who vote against the resolution must have no more than 25% of the lots or unit entitlement in the scheme.
By-laws can also be made at the request of Local Government or other authorities. Because by-laws need to be legally enforceable, and unambiguous, they should be drafted by an appropriate professional, or with legal advice. Care should be taken not to make by-laws that are discriminatory, or that cannot be easily enforced.
For more info, please call Elizna Pelser, Senior Strata Manager on +61 434 650 864.