Strata have been a part of the Australian residential property landscape since they became ratified legal entities in 1961. Since then, the concept of strata schemes and living communities has only continued to grow. Today, there are more than 340,000 strata nationwide, and they accommodate 17 to 26 per cent of the total population.
A strata, or strata scheme, is a property ownership model where a person purchases a single lot within a development and is considered a joint owner of the common property. Strata schemes vary in size, with the majority containing one to five lots while others have more than 50 lots in a scheme. Therefore, with these size differences, managing a strata scheme becomes a complex endeavour, thus necessitating the establishment of management protocols.
When you buy a strata lot and obtain a strata title, you automatically become a member of a larger entity known as a body corporate. This process applies to all lot owners. When all the memberships are established, the body corporate then becomes a registered legal entity and becomes responsible for the strata’s operation.
So the body corporate of a strata is, in essence, the scheme’s governing body. It operates at four levels:
- The Body Corporate- consists of all the strata lot owners.
- The Committee comprises a select group of lot owners or owner proxies who are elected into their positions.
- A delegate of the body corporate- often
- A committee delegate.
The roles also vary at each level; therefore, the body corporate:
- Is primarily responsible for all decision making.
- Solely holds power to overturn a previous decision made by the body corporate.
- Delegates powers as needed, but only in those matters which don’t need a special resolution.
- Appoints sub-committees if need be, mainly in an advisory capacity only.
The Committee
- Plays the primary decision-making role on all matters except those which the body corporate determines to require a general vote.
The delegates can only make limited decisions. The parameters of their powers are decided by the body corporate.
The decision-making process within a body corporate relies on voting. Whenever the members need to make a decision or find a resolution, members cast their vote by attending a meeting or by ballot.
Unlike the conventional political system, votes within a body corporate get assigned based on lot entitlements. Therefore, if you own more than one lot within the strata scheme, you will also have more than one vote. However, if you jointly possess one unit with another owner, you and your partner will split one vote.
In addition to vote numbers, body corporates also classify the decisions. There are three categories: special, ordinary and unanimous. In order to determine whether a resolution has passed in each class, the vote tallies are calculated and presented as a percentage of the total votes with certain thresholds.
Strata body corporates play a key role in the overall quality of the strata they represent. Therefore, while their formation is a given, they must also be well run to ensure their success.
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