What is a Strata Scheme and How Does it Work

strata scheme


Strata schemes should be familiar to most Australians by now. To the rest of the world, this concept is  new. This mid-twentieth century property concept has seen explosive growth in the past few years, and people are wondering why. It’s important to get to know strata schemes to understand why they’ve become so popular as of recently.

Starting with the basics – strata apartments are called “lots” and they are the properties that individuals purchase within a scheme. The strata scheme is under the jurisdiction of the owners corporation, which is an entity comprised of all the owners of various lots throughout the scheme.

Individuals that wish to invest in real estate should get familiar with strata schemes and how they work before entering the market. Here are some important aspects of strata that are worth noting.

Following regulations

Before a strata lot owner moves into their apartment, they should get well acquainted with the regulations surrounding strata schemes.

Keep in mind, every lot owner is also a part of the owners corporation. This means that they have a say in how the strata scheme is run and maintained. Very few individuals will have the necessary experience to do the administrative work necessary to manage the strata scheme, which is why external help is hired to do the job. When it comes to strata management in Sydney, the owner’s corporation rarely has problems finding adequate administrative help. There are countless real estate and property management groups available that are able to deal with the paperwork and legal obligations of running the strata scheme.

Maintaining a strata scheme

Apartments within a strata scheme are considered pretty low maintenance, at least compared to most other forms of property ownership. This is good news for future strata lot owners, as they have fewer obligations and difficulties adapting to their new living conditions. However, this doesn’t mean that lot owners don’t have to adhere to specific maintenance rules of a strata scheme.

Generally, lot owners band together and maintain the common areas of the strata scheme as a collective. They don’t clean the areas themselves, but rather hire outside help to take care of the cleaning and general maintenance that might be required. The costs of help are shared amongst the members of the owner’s corporation, meaning that the expenses tend to stay on the lower side of things. It’s akin to a tax system that takes care of the shared spaces, making it easier to maintain them.

Strata lot pricing

One of the more attractive aspects of a strata lot is the price. If there’s any reason why someone would choose a strata property system over any other, it’s the affordable and accessible nature of a strata lot. It’s one of the primary reasons so many young Australians are moving into strata schemes as of recently. Strata schemes are considered a great way to enter into property ownership. There’s no land involved in the purchase, which already drastically reduces the price ranges of strata lots.

Let’s not forget about the other prices involved in a strata scheme. Bills tend to be on the lower side in strata schemes because the owner’s corporation negotiates with third parties to allow for better long-term deals. It’s an almost ideal set of circumstances for people that are looking for their first apartment.

Owner obligations

Much like any members of a building community, strata lot owners can’t just do as they please with their apartments. You have certain obligations towards your strata lot and the community around you. Every lot owner must abide by a set of rules, some of which are set by the government, while others are decided on by the owner’s corporation.

The latter are called by-laws, and they tend to vary from one strata scheme to another. You will find that they cover general aspects of living in a building, but they can include some rules about the common areas. These rules cover things like pet ownership and smoking in shared areas, while also including things like personal maintenance of exterior portions of apartments.

You shouldn’t have too many issues with these by-laws, as they aren’t too draconic. Keep in mind, strata lot owners can call for a motion to discuss and even modify these rules. Everything is handled democratically, meaning that by-laws are subject to quick change if lot owners agree to them.

Resolving conflicts

With more than one individual living in a strata scheme, it’s inevitable that there will be a clash of opinions from time to time. Neighbors will disagree on one thing or another, leading to a conflict that might involve the entire strata scheme. These disagreements could be over bad behavior, noises, or even interpretations of by-laws. The way strata schemes deal with these types of conflicts is pretty innovative.

Instead of resolving conflicts through discussions or a vote, strata schemes will employ the help of a mediator to provide an impartial view. The mediator is usually a legal expert that specializes in strata laws and by-laws, giving them authority to speak on the matter. With this kind of system in place, the conflicts are quickly settled and lot owners mostly leave satisfied with the results.


Strata schemes aren’t particularly complex. They’re much like any other property ownership system, but they include some specifics that are worth noting. Strata lot owners will find that it’s easy to adapt to this new living situation, and it’s not too much of a hassle to deal with obligations. With this in mind, it’s still important that future lot owners do their research before deciding to purchase a strata lot of their own.

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