Owning an apartment is a great choice for many people. Apartment owners get to have the same privacy as homeowners, but for less money and with fewer maintenance responsibilities.
However, the apartment buying process can be quite complex, particularly for newcomers who are not familiar with real estate terminology. Residential areas that were subdivided into individual units by land survey services can come with strata or community titles. These titles confer slightly different rights and responsibilities onto apartment holders.
Although this difference can be confusing to first-time apartment shoppers, there are a few key differences that can help you understand whether a strata or community title is better for you.
- What Kind of Property Is it?
Strata titles are common in more kinds of property. Many residential apartment buildings give strata titles to each unit owner. Strata titles are also common in other types of communal real estate situations, such as townhouses, duplexes, and even retirement villages. Places where businesses have to share space, such as office buildings or manufacturing lots, also use strata titles to divide up the property.
On the other hand, community titles are usually used on properties that have multiple lots along with a common area, such as a shared driveway or entrance. For example, a gated estate where every owner has a separate unit but they share roads and driveways would probably use a community title.
- Where Does Your Property End?
The reason why different types of shared living spaces use strata or community titles lies in the property rights each respective title confers.
Strata titles decide parcel boundaries within a building’s interior. That means that each owner is entitled to anything enclosed within their unit’s interior measurements and nothing more. Areas such as driveways, hallways, and even yards and gardens are not the property of any individual owner but shared between all residents.
On the other hand, community titles allocate a lot to each owner. These lots are usually marked out by land survey services and include entire parcels of land. An owner can have individual rights to their house (or land to build their house) and outdoor areas such as a lawn. However, places governed by community titles usually have common areas as well.
- Who Maintains the Building?
Apartments that have strata titles and apartments that have community titles come with shared facilities such as hallways, garages, and more. These areas are not the property of any individual owner, so they are not the responsibility of any individual owner—yet they still need to be maintained.
A building that has strata titles also has a strata corporation. The strata corporation maintains common properties, enforces building rules such as quiet hours, and resolves disputes between neighbours.
In a community title scheme, this governing body is called a community title corporation or a body corporate. They have similar responsibilities to a strata corporation, such as maintaining common properties and enforcing property rules. A community title scheme also needs to have a community management statement.
There are some similarities in the way strata titles and community titles are maintained. In both titles, individual property owners need to pay some fees towards the maintenance of common areas. The amount of these fees depends on the size of your unit. The body corporate for both kinds of titles also needs to include all residents in the decision-making process by holding regular committee meetings and at least one annual general meeting.
- What Insurance Do You Need?
Finally, the last difference between strata and community titles is in how each building is insured. Strata corporations have to take on insurance for the whole building. This includes building insurance and public liability insurance in case someone gets injured on the property. Usually, each owner pays a certain amount towards the collective insurance and purchases additional insurance for their own unit if they wish.
On the other hand, community titles do not have mandatory insurance since they are divided by lot. Individual lot owners can choose to insure their property or not. If you get a community title unit, you may have fewer insurance fees, but that could wind up costing you down the road if there is a disaster.
Both strata and community titles allow you to buy a unit with some shared communal property. You can choose which one you want to buy depending on your individual needs.
Strata titles usually allocate property rights to individual units, such as apartments, townhouses, or duplexes. Community titles give you access to a whole lot of property. You will have to pay maintenance fees for communal areas under both titles, although you will only have to pay for insurance with a strata title.
No matter which title you choose, owning a property is a great experience that you’ll get to enjoy for many years to come.
