Strata titles and the CTTT
Many Australians live in home units, or apartments as they are now often being called, and many of those residents own their own unit. How can you own part of a building?
This was the problem until the 60's, when the first Strata title laws were introduced in New South Wales. An "owner" could not get a title deed for their unit, and the most common solution was to form a "Home unit company". Unit owners owned shares in the company, and specific shares gave the shareholder the exclusive right to occupy a particular unit. Unfortunately, lenders would not lend the same percentage on company title as they would against a title deed.
Once a strata plan is registered, a body called the Owner Corporation - previously called the Body Corporate - comes into existence. It owns all the common property - any part of the land and building not part of a lot. A lot, which may comprise a home unit, a parking space or garage or a storage area, has its own title deed, and can be bought, sold, mortgaged or leased as the owner wishes. There is a separate title deed for each lot, so lenders are happy.
The various unit owners are like shareholders in a company. They own specified percentages of the common property (called the unit entitlement), appoint a committee (which is the equivalent of a company's Board of Directors), and pay their specified percentage of the building's expenses. Usually there will be a professional strata manager appointed, who will look after building repairs and maintenance, insurance and finances.
In the ideal scenario, owners have little to do except pay the levies - usually quarterly - and elect a committee each year. The committee and the strata manager do the rest, and there is a lot of paperwork to do to meet the legal requirements of an Owner Corporation. The requirements are basically the same whether the property is a two unit duplex, or a multi-storey block with a hundred units. Purchasers of a unit will normally obtain a report to see how well the property is being managed, so it is in the interests of all owners to make sure things are being done properly.
Human nature being what it is, there will inevitably be times when there are disputes in a strata building. How are they resolved? If the committee or the strata manager cannot resolve matters, the Department of Fair Trading and the Consumer, Tenancy and Trading Tribunal (CTTT) which the Department provides will assist. An application can be lodged with the CTTT, but it will not normally proceed to deal with it until mediation has been attempted. If mediation has not been successful, the application will be referred to an Adjudicator of the CTTT, who will hear both parties and make a decision. An appeal does lie to the CTTT itself.
Typical matters which are dealt with this way will be disputes about the appropriateness of the unit entitlements, or the appointment or replacement of a strata manager. Fortunately, given the substantial number of strata buildings, the volume of business which is referred to the Department and the CTTT is reassuringly small. Most of us can work through our problems! But please seek the advise of your lawyer if your circumstances are different, or you just need reassurance!
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Strata title - Just what is it?
The New South Wales Housing Code to commence on 27th February, 2009
