THERE’S NOTHING COMMON ABOUT THIS STRATA PROPERTY
August 10, 2023
Strata title doesn’t exist without a building: it’s fundamental.
There must be a strata building to create a strata corporation, define the common property, and, give life to boundaries for the strata lots. Strata owners’ property [their cubic space] is defined by the walls, floors, and ceilings of the strata building. Asset values depend on the preservation of the strata building. And, most strata insurance applies on a whole strata building basis too.
Plus, the strata operational fundamentals apply based on the way the strata building is constructed and divided between stakeholders; for things like responsibilities, rights, payment shares, controls, etc] and represent a significant proportion of day-to-day strata operations. Not to mention strata building structure issues like usage allocation between stakeholders, original building defects, disrepair, long-term maintenance funding, changes to the building structure, liability for it, etc.
And, most of a strata corporation’s money goes towards the strata building in one way or another.
So, the parts of our strata laws that are about the strata building structures are critical.
In this article, I cover the fundamentals of strata building structure controls and issues.
General comments on strata building structure controls and issues
Strata laws include a variety of provisions relating to strata building structure matters covering the following key things:
- Common property maintenance, repair, and replacement.
- Alterations by strata buildings and strata owners.
- Unauthorized interference with the building structure.
- Orders about works that have been and/or need to be done, and consequent liability.
- Funding mechanisms for the costs associated with strata building structures.
- Insurance requirements.
The conceptual basis for strata titling land [the ground and building] into cubic spaces that are individually and collectively owned was very well thought through by its NSW inventors, Messrs Rath and Grimes, in the late 1950s.
And, their invention has stood the test of time very well for 60 years.
So, we should respect and preserve these fundamentals whilst adapting them to deal with the changes in strata buildings, property ownership, the economy, and society that have occurred.
Unfortunately, changes to strata laws that have been made since then haven’t done that and should, in my opinion, be reversed or changed to something better.
There’s quite a few [bad] examples of this around Australia.
For instance, the introduction in NSW of written statements [called a Common Property Memorandum] that can be approved by a strata building to explain and/or change who is responsible for different parts of the building.
They are a problem because most strata stakeholders don’t know what’s common property or lot property in the first place. So, in many cases, these Common Property Memorandum are unlikely to better define things properly and will likely lead to more and different problems. Plus, it’s a cheap [read lazy] option for something that needs a bit of intelligent analysis, more uniformity, and, certainty.
I’ve specifically criticised that NSW provision in my 2021 submissions to the NSW Government about their latest proposals for strata law reforms which you can read in my 2021 article Strata Reforms [NSW]: Stage 1 Wrap Up: My 113 ideas & suggestions about the initial discussion paper & questions …
So, strata stakeholders should take extra care when changing the way a strata building is split into common property and lots and how common property is treated if that’s differently from how the standard strata laws apply.
Not doing so leads to a number of problems in strata buildings including the following.
- Changes are made that are inconsistent with applicable strata laws and, as a result, are invalid. Thereby creating a new regime that never actually applies, and strata stakeholders mistakenly relying on it for their actions.
- Approving alterations to the building [by the strata building and/or strata owners] in ways that are not appropriate to the scope, type, or, permanence of the changes.
- In a rush to pass responsibility to strata owners for parts of the common property, handing over control of parts of the strata building, the strata corporation loses control of common property and structures that should remain with it.
- Failing to carefully understand the subdivision pattern in their strata plan and the unique characteristics of their strata building, leaves the strata owners, strata residents, and, strata managers guessing and hoping for the best with decisions they make about big and little issues relating to strata building operations.
So, what changes could be made to improve building structure issues?
I’ve identified 5 areas of strata building structure issues as follows that should be addressed in strata law reforms.
And, in the next few articles, I’ll cover each of those in more detail.
- Lots vs. common property [and stuff in between]
A perennial issue in strata building is delineating what is lot property and, as a consequence, what is common property. Once known this determines responsibilities between the strata owners and the strata building.
This delineation occurs via a combination of the strata plan and the deeming/defining provisions in the strata laws about boundary locations. Done carefully, it resolves virtually all such questions although it sometimes requires a physical inspection of the relevant part of the building.
- Shared common property use & allocation
Since every strata owner is a co-owner of the common property with equal and unlimited rights to use all of it, how that use is allocated, restricted or re-allocated makes a massive difference to them.
Those rights can only be restricted by property dealings [such as covenants, easements, etc] or strata by-laws. That’s why there’s a by-law prohibiting parking on common property … otherwise, everyone could just park anywhere they like.
This isn’t usually an issue because most strata owners are reasonable and sensible and there’s often not much utility to many common property areas.
- Repair, maintenance, replacement & liability for common property
Because there are unavoidable obligations on strata buildings to maintain, repair, and replace the common property, and since strata corporations can be subject to orders to do so and liable for damages claims for not doing so, the ongoing management of the building structures plays a significant part in strata operations.
It’s an important principle of strata title because, fundamentally, if the strata buildings are not intact then strata owners’ property titles and values are directly impacted.
- Strata owners’ works in lots and common property
Strata owners often want or need to improve their apartments, shops, and offices with minor and more major works. Sometimes they may also want to incorporate common property into structure changes. If and how they should so and, if they do, what happens later, affects everyone in the strata building.
Over time the controls on strata owner works have evolved into a few tiers and varying permission structures. But that haphazard evolution means that the mechanisms have different criteria, leave gaps between different kinds of works, sometimes overlap, and can be confusing to apply for strata stakeholders.
- Using modern technologies
Things like BIM, 3D mapping, and, other new technologies to identify what is lot property and common property and how it’s changed may be way better than relying on 2D strata plans, statutory interpretation rules, words, and, basic drawings for defining, identifying, and, managing strata building structures.
Embracing new technologies to solve old and long running problems has worked elsewhere, so strata is unlikely to be immune from its benefits.
Strata stakeholders should stay focused on the fundamental importance and integrity of the strata building structures on both titling and operational bases.
But, it’s also time to revisit the fundamentals and how they’ve been applied to evolving strata laws over the last 50+ years.
So, look out for my next few articles where I consider a few of these areas, explain issues and options, and, suggest improvements to strata laws and operational methods for strata building structures.
This article was contributed by Francesco Andreone – GoStrata