Strata title is a New South Wales invention, which was instigated by major property developers in 1960. The building of unit blocks was becoming popular, but there was then no means of giving buyers a Torrens title deed as they would have received if they had bought a free-standing home.
The most common method of ownership was through a company which owned the land and building - and only that particular property. Buying shares in the company of a designated class gave the shareholder the right to occupy a specified apartment. Often a sale of the shares for an apartment was subject to the approval of the company's Board of Directors, and sometimes a right to lease the apartment was restricted. There were other methods, such as ownership as tenants in common, but company title was the most common. There are still some company title apartment blocks around.
Lenders quite justifiably saw company title, as it was known, as being less attractive security than a Torrens title property, and so would only lend lesser percentages of value. A group of expert property lawyers was employed by developers to come up with a solution, and in 1961 the first Strata Titles Act was presented to the government and became law.
When a plan of strata property is registered, there comes into existence what is known as the �Owner Corporation no 11111�, for example. The plan shows individual lots - the separate apartments which may include parking facilities - and the remainder is known as �common property�. This may include driveways and paths, gardens, hallways, stairwells and the like, as well as the building's walls. When strata title was first introduced, this body was known as the Body Corporate.
The Owner Corporation is rather like a company: the unit owners are members, like shareholders, and their percentage is shown in the Strata plan. The members elect a committee, which has the responsibility of managing, maintaining and insuring the property. In many cases, particularly with larger blocks, a professional strata management company will be employed by the committee to carry out much of those tasks. Individual unit owners pay levies to the Owner Corporation to cover matters such as building and other insurances, gardening, maintenance and the like, which are set by the committee, usually annually and payable quarterly.
The significant feature of strata title is that each lot or apartment has its own Torrens title deed. It can be bought, sold, rented out or mortgaged without any consent being needed. A strata title property is therefore seen by lenders as good security for a loan, and usually lenders will lend the same percentage of value as they would for a free-standing house. The invention of strata title has played a major role in making ownership of their own home more accessible to Australians.