What Is Strata? A Property Manager’s Guide to Strata-Titled Portfolios

Strata is one of the most common ways to own property in Australia and one of the most widely misunderstood. In my experience, anyone asking what is strata wants one thing settled, which is where individual ownership ends and shared ownership begins, because that line decides who pays for the roof, who approves a pet and who funds a lift replacement. In this guide I cover how strata title works, how levies and by-laws operate, and how the rules change from state to state. For property managers, I have also set out what each part means in practice, because strata lots carry admin that freestanding rentals never generate.

What Is Strata?

Strata, or strata title, is a form of property ownership that allows a person to own a specific unit, called a lot, within a larger building or complex, while sharing ownership of the communal areas with the other lot owners.

An owner holds title to their own apartment, townhouse or unit. Everything outside it, including the roof, external walls, foyers, lifts, driveways and gardens, is common property owned collectively by everyone in the scheme and managed on their behalf.

According to the Australasian Strata Insights report published by UNSW Sydney’s City Futures Research Centre, 15 per cent of Australian residents live in strata, across 367,970 schemes and 3,173,631 lots. Strata is no longer a niche ownership model. It is a mainstream part of Australian property life.

For property managers, the operative word is shared. A freestanding rental has one owner, one set of obligations and one decision-maker. A strata lot has an owner you act for, and a collective that controls everything outside their walls. Your management authority stops at the lot boundary, and a large share of what your tenant will ring you about sits on the other side of it. At 3.17 million lots nationally, this is no longer a specialist skill. An agency of any size is already managing strata lots, whether or not it has built a process for them.

How Strata Title Works in Australia

A parcel of land or a building is subdivided into individual lots and common property. Each owner holds a separate title to their lot and collectively owns and maintains the shared areas. That is the whole concept.

In practice, the layered legal obligations, governance structures and financial responsibilities make strata considerably more complex than owning a freestanding house. Owners take on a set of rules, a shared budget and a collective decision-making process that does not exist on a Torrens title block.

For property managers, the complexity has a specific shape: two sets of rules now apply to every tenancy you write. Residential tenancy legislation governs your relationship with the tenant. Strata legislation and the scheme’s by-laws govern what that tenant may actually do in the building. When those two collide, the enquiry lands on your desk first.

Where the Lot Ends and Common Property Begins

When someone buys a strata property they own their individual lot, typically the apartment, unit or townhouse, along with a proportional share of the common property. The strata plan defines where the lot ends and common property begins, and this varies between schemes.

In a typical apartment, the lot covers internal walls, floor coverings and fixtures. Floors, ceilings, external walls, foyers, stairwells, lifts, gardens and driveways are often common property, although the exact boundary is determined by the registered strata plan and the legislation applying in the relevant jurisdiction. Common property generally includes:

• Building structures, external walls and roofs
• Shared driveways and car parks
• Swimming pools, gyms and recreational facilities
• Garden areas and landscaping
• Lifts, foyers and stairwells
• Common area utilities and services

For property managers, this boundary is the single most useful thing to know about any strata lot in your portfolio, because it decides who pays for a repair and who you have to chase to get it done. The practical test when a maintenance request comes in is whether the fault sits inside the lot boundary or outside it.

A dripping tap will often be the lot owner’s responsibility, while a leaking roof will often be the owners corporation’s responsibility, but the strata plan and applicable legislation should be checked before allocating liability. Getting that call wrong is expensive twice over, because you either bill a landlord for something they never owed or you leave a tenant waiting while the request sits with the wrong party.

The Owners Corporation (or Body Corporate)

The legal entity governing a strata scheme is the owners corporation in New South Wales, Victoria and the ACT, the body corporate in Queensland, and the strata company in Western Australia. Every lot owner becomes a member automatically on settlement.

That body is responsible for:

• Managing and maintaining common property
• Setting and collecting levies from lot owners
• Arranging building insurance and public liability cover
• Enforcing the scheme’s by-laws
• Keeping financial records and presenting them at annual general meetings
• Resolving disputes between owners and occupants

Day-to-day decisions are usually delegated to a strata committee elected at each AGM, and larger schemes engage a professional strata manager to administer the scheme.

For property managers, the distinction that matters is who each party acts for. The strata manager acts for the collective. You act for one lot owner. You are generally not acting on behalf of the owners corporation, and any authority to instruct strata contractors will depend on the management agreements and authorisations in place for the scheme.

What you can do is escalate, document, and keep your landlord client informed. Agencies that treat the strata manager as a peer to coordinate with, rather than a supplier to instruct, get faster outcomes.

Strata Plans and By-Laws

Every strata scheme has a registered strata plan, a technical document lodged with the relevant state land registry that defines the boundaries of each lot and the common property. It is the primary reference for understanding exactly what an owner owns.

Schemes also operate under by-laws, the rules governing how owners, tenants and occupants use their lots and the common areas. By-laws typically cover:

• Pet ownership
• Noise and amenity standards
• Renovation approvals
• Parking and storage allocation
• Short-term letting restrictions
• Use of shared facilities

The NSW Government makes clear that by-laws bind all owners, tenants and occupants. They can be changed by special resolution at a general meeting, but a by-law cannot be harsh, unconscionable or oppressive.

For property managers, by-laws are not background information. In many jurisdictions, the current by-laws must be provided to a tenant before or at the commencement of the tenancy, and lease terms should be reviewed to ensure they do not conflict with the scheme’s by-laws. A lease permitting a pet in a scheme that restricts them is a dispute you have created yourself.

Types of Strata Properties in Australia

Most people picture inner-city apartments, but strata title applies across a much wider range of property:

• Apartments and units, high-rise and low-rise
• Townhouses and villas
• Duplexes
• Commercial office and retail spaces
• Industrial units
• Serviced apartments

In states such as Western Australia, strata is also split into two structural types:

• Built Strata: multi-storey buildings where ownership is defined within a cubic airspace, such as apartments
• Survey Strata: where a freehold lot is divided into smaller surveyed land lots, often used for side-by-side townhouses or villa developments

For property managers, the distinction that changes your workload is residential versus commercial. Commercial strata carries its own financial, legal and governance requirements, including outgoings recovery, certificate of currency tracking and valuation cycles that residential schemes do not impose.

An agency running a mixed portfolio is effectively running two processes. My team at PMVA supports property managers across both, and our guide to commercial property management covers where the requirements diverge.

Strata Terminology by State

One of the biggest sources of confusion is the inconsistent terminology. The ownership model is broadly similar across Australia, but the legal language, governing entities and fund names vary by jurisdiction.

In the ACT, the current legal term is owners corporation, not body corporate. Victoria runs its own owners corporation framework. South Australia distinguishes between older strata corporations under the Strata Titles Act 1988 and community corporations under the Community Titles Act 1996.

In Queensland, the sales reference has also changed. Under the seller disclosure regime introduced by the Property Law Act 2023 (Qld), sellers of body corporate properties must provide a prescribed disclosure statement plus a body corporate certificate where applicable. As set out in the Queensland Government’s seller disclosure guidance, the correct term is now the seller disclosure statement, not a generic strata disclosure statement.

For property managers, this is a live operational risk rather than trivia if your agency works across state lines. Using the wrong term in a landlord report or a compliance file is the visible symptom. The underlying problem is that the obligations genuinely differ.

On the Queensland change specifically, only the body corporate can issue the certificate, and it has five business days to do so, which means ordering it late is a settlement risk your sales team owns. Our virtual assistant services support this across the full sales lifecycle.

How Strata Levies Work

Levies are the financial engine of every strata scheme. Lot owners contribute to the shared costs of running and maintaining the scheme through regular payments, usually collected quarterly. They are a legal obligation, and non-payment can trigger debt recovery by the owners corporation, along with loss of voting rights in most jurisdictions.

Levies are set at the AGM against an approved budget. Each owner’s share is proportional to their unit entitlement, recorded on the strata plan, so lots with higher entitlements typically pay more.

For property managers, levies are where strata enters your trust accounting, so they are worth understanding properly rather than treating as a landlord problem. Levy notices have to be captured, coded and reconciled on a quarterly cycle that does not align with your rent cycle.

Your management agreement needs to state plainly whether you disburse levies on the owner’s behalf or the owner pays them directly, because ambiguity here produces arrears nobody notices until the owners corporation escalates. And levies are an owner cost in residential tenancies, never a tenant cost, which is a conversation worth having at onboarding rather than at the first quarterly notice.

Administrative Fund

The everyday operating fund, covering:

• Building insurance premiums
• Common area cleaning and garden maintenance
• Electricity and water for shared spaces
• Pest control
• Strata management fees
• Routine repairs to common property

As NSW Fair Trading explains, the administrative fund must be estimated and approved at each AGM so the scheme can meet its operating costs across the year.

Capital Works Fund

The long-term reserve for major works and replacements, called a capital works fund, sinking fund or reserve fund depending on the state. It covers roof replacements and waterproofing, lift overhauls, facade repairs, pool equipment and major common area renovations.

NSW schemes must maintain a 10-year capital works fund plan under the Strata Schemes Management Act 2015, reviewed at least every five years, as set out in the NSW Government’s strata guidance. A scheme with an underfunded reserve is a significant red flag, because it points to future special levies or deferred maintenance.

For property managers, this is the fund your agency should actually be reading. An underfunded capital works reserve is the clearest available predictor of a special levy, and a special levy is the single most common unpleasant surprise a landlord client experiences. Reviewing fund balances and the last two years of AGM minutes when a strata lot enters the rent roll costs very little and lets you warn an owner months ahead rather than forwarding a bill.

Special Levies

Where the capital works fund cannot cover an unplanned or underestimated expense, the owners corporation can raise a special levy by ordinary resolution at a general meeting. These are one-off costs on top of regular levies and can run from a few hundred dollars to tens of thousands per lot.

Understanding scheme financial health is a core part of real estate asset management. For property managers, the difference is in the warning. An owner who has been told a special levy is likely, and why, generally stays. An owner who receives one without warning starts asking what else their agency has not told them.

Your Rights and Responsibilities as a Strata Owner

Owning a strata property is fundamentally different from owning a freestanding home on a Torrens title. Lot owners have both rights and obligations flowing directly from strata legislation and the scheme by-laws.

Rights Include:

• Attending and voting at general meetings
• Accessing the scheme’s financial records, minutes and by-laws on request
• Requesting repairs to common property affecting the lot
• Standing for election to the strata committee
• Raising disputes through the relevant state tribunal

Responsibilities Include:

• Paying levies on time
• Complying with the scheme’s by-laws
• Seeking approval before alterations affecting common property
• Avoiding interference with other owners’ quiet enjoyment
• Ensuring tenants and occupants comply with the by-laws

For property managers, these are your landlord clients’ obligations in law, but almost all of them arrive as your work, because you are the party with the systems, the tenant relationship and the file. Your agency is usually the one monitoring meeting notices, requesting records, and lodging common property repair requests. Flagging an upcoming AGM to an investor client, particularly where a special levy or major works vote is on the agenda, is a low-effort service most agencies simply never build into their calendar.

The last responsibility on that list is the one that becomes yours in practice. The owner is answerable for tenant conduct, and you are the party who selected, inducted and manages that tenant.

One requirement deserves its own line. In New South Wales, by-laws must be provided to a tenant before they enter into a lease, and other jurisdictions may impose similar disclosure obligations that should be checked against the applicable legislation. Either way, it is a documented step at every strata lease commencement, and it needs to be evidenced in the file rather than assumed.

This is exactly where investment property compliance outsourcing earns its place. The steps are not difficult, they are simply easy to skip under volume, and the cost of skipping them lands on the owner and the agency together.

How Strata Differs from Other Property Ownership

To put strata in context, it helps to compare it with the other main forms of property ownership in Australia:

• Torrens title (freehold): The owner holds the land and everything built on it outright. There is no shared governance, no levies and no owners corporation. All maintenance and costs are the owner’s sole responsibility.
• Company title: An older model, primarily in NSW, where a buyer purchases shares in a company that owns the building rather than a separate title to the unit. Harder to finance and trade, and share transfer and occupancy approvals can affect letting.
• Community title: Shared areas exist, but each property usually has its own surveyed land allotment, governed by a community association rather than an owners corporation.
• Strata title: Two governing frameworks, a split repair boundary, and a quarterly financial cycle running alongside your own.

Strata is by far the most common multi-dwelling structure in Australia, and its share is rising. According to InfoTrack’s Property Market Update Q3 2024, strata dwellings accounted for over 33% of NSW property sales in that quarter.

For property managers, title type changes your workflow more than most agencies account for. Torrens is a straight line from tenant to you to owner. Strata adds a second governing framework, a split repair boundary and a quarterly financial cycle running alongside your own. For an agency planning capacity, that trend means the strata share of your rent roll is more likely to grow than hold.

Managing Strata Properties: What Property Managers Need to Know

Strata lots do not just add properties to a rent roll, they add a different kind of work. Your landlord clients carry levy obligations, by-law compliance requirements and a relationship with an owners corporation that sits above your management authority.

From my years working with agencies across Australia, the pattern is consistent: strata rarely breaks an agency through any single dramatic failure. It accumulates. A missed levy notice here, an undocumented by-law handover there, a maintenance request that bounced between the strata manager and the landlord for a fortnight.

Four areas need explicit systems.

• Levy Management: Body corporate levies recorded, invoiced and reconciled correctly in trust accounting. Our trust accounting support handles this as quarterly body corp processing.
• Compliance Documentation: Current by-laws issued at every lease commencement, evidenced in the file, with lease terms checked against scheme rules.
• Maintenance Coordination: A documented triage step that establishes lot or common property before a work order is raised, and a named escalation path to the strata manager.
• Insurance Clarity: The owners corporation insures the structure and common property. Your landlord still needs their own landlord insurance for lot contents and rent default. Owners routinely assume the strata policy covers more than it does.

The right property management software reduces the administrative weight of holding strata lots inside a residential portfolio, and it is worth assessing which platform genuinely supports strata workflows rather than tolerating them.

For agencies managing strata at scale, property management workflow automation becomes the difference between a manageable strata workload and a reactive one.

How Agencies Absorb the Strata Administration Load

Strata lots carry administrative work that freestanding rentals do not: levy records to reconcile against trust accounting, by-law documents to issue at every lease commencement, and maintenance requests to route between the landlord and the owners corporation. That load sits on top of an agency’s standard property management workload and grows with every strata lot added to the rent roll.

Some agencies absorb it by moving the recurring administrative steps to trained offshore staff. I founded PMVA as an Australian real estate outsourcing provider after years working as a property manager, and my team supplies dedicated virtual assistants trained in Australian property management to agencies across Australia and New Zealand. They work on back-office administration under the direction of your own licensed property managers.

Frequently Asked Questions

Where Good Strata Management Starts

Strata is no longer a niche part of the market but a core part of how Australians own, invest in and manage property. Understanding lots, common property, levies and by-laws leads to better decisions and less avoidable risk, for a single owner and for an agency managing a hundred lots. The agencies that handle strata well are rarely the ones working hardest at it, but the ones who settled where the lot boundary sits before the first maintenance call and read the capital works fund before the first special levy. If you want clearer systems behind your strata administration and compliance, explore how PMVA can support your team.