Understanding Property Titles in Victoria: Strata, Stratum, and Company Share Titles

When purchasing property in Victoria, it’s essential to understand the different types of property titles available. Each title type has unique characteristics and implications for ownership, management, and legal responsibilities. Here’s a breakdown of the differences between strata, stratum, and company share titles.

Strata Title

Strata title is the most common form of property ownership for apartments, townhouses, and units in Victoria. Under a strata title, individual ownership is granted for a specific unit or lot, while common areas (like gardens, hallways, and pools) are collectively owned by all unit owners. These common areas are managed by an owners’ corporation, which is responsible for maintenance and other shared expenses.

Pros:

Clear ownership of individual units.

Transparent management of common areas.

Typically adds value to the property compared to other title types.

Cons:

Owners must pay levies for maintenance and adhere to bylaws.

Participation in owners’ corporation meetings is required.

Stratum Title

Stratum title is a hybrid between strata and company share titles. It involves individual ownership of a unit and shared ownership of common property through a service company. Each unit owner holds shares in this service company, which manages the common areas.

Pros:

Combines elements of both strata and company titles.

Provides clear ownership of individual units.

Cons:

Can be complex due to the involvement of a service company.

Owners may face restrictions imposed by the service company’s constitution.

Company Share Title

Company share title is less common and involves owning shares in a company that owns the entire property. Instead of owning a specific unit, shareholders have the right to occupy a unit. This title type is governed by the company’s constitution, which can impose various restrictions.

Pros:

Can offer good value for money.

Potential for increased property value if converted to strata title.

Cons:

Ownership is less direct, as it involves shares in a company.

Financing can be more challenging, as some lenders are hesitant to provide loans for company share title properties.

Restrictions on occupancy and modifications can be more stringent.

Understanding the differences between strata, stratum, and company share titles is essential for making informed property decisions in Victoria. Each title type has its own set of advantages and disadvantages, so it’s important to consider your personal circumstances and seek professional advice if needed.