STRATA IN GENERAL.

See https://www.legislation.tas.gov.au/view/html/inforce/current/act-1998-01...
In general terms the development of land is all about gaining separate titles to portions of real estate for separate dealings such as sale or finance generation.

There are two basic ways of achieving this goal, traditional subdivision or stratum development.

Traditional subdivision only relates to land and not buildings, whereas strata development relates to land and buildings (there are exceptions to this but generally land and structures are involved) and is three dimensional; i.e. strata titles also have a vertical description; they have depth and/or height!

Note the measurements on a Strata Plan are used for a different purpose than those on a traditional Survey Plan. See Measurements on Strata Plans to better understand these measurements.

The following comments are general in nature; each site has its own set of circumstances that may need resolving whether it be servicing, access, architectural etc.

We will not go into traditional subdivision here but aspects of this process are discussed in Subdivision Overview on this web site. Effectively traditional subdivision development involves the creation of titles that can stand alone in terms of services and legal and physical frontage. Councils place permit conditions on the developer to ensure that these separate services are provided by the developer so that the title is generally not reliant on other owners. Again there are exceptions to this but we are here to talk about Strata Development.

In a completed stratum (i.e. a development that has been constructed under a council permit to council standards, concrete drives, services etc), once one leaves the Council Public Road and enters the strata site the Council is not interested in what happens; any matters arising are the responsibility of the Body Corporate. It is like entering a new ‘town’ or closed community that is responsible for itself. The vehicle ways inside a stratum are not Public Roads but drives usually part of the common property.

So, one of the main attractions with a strata development is that they solve the need to create Public Road frontage for each individual title. Portions of open land capable of development but have limited frontage to a Public Road can generally be developed by strata development.

The other aspect that is attractive in a stratum is the lower standard of the provision of services such as access, water, stormwater and sewer (plus NBN, power and the like).

With traditional subdivision, a system of service mains (arteries) is constructed to a high standard and these services are then separated to each new title created. This is to ensure that no one title owner is reliant on another. As said this requires the creation of Service Mains that have a high-end construction standard that are taken over by the relevant service authority, but are constructed by the developer at their cost. These ‘Mains’ are designed by an engineer and created as a network of services and are subject to strict design controls and become the responsibility of the relevant service provider.

With a strata development, once one is inside the strata site and the services have been constructed by the developer, they become the responsibility of the Body Corporate. They can be constructed to ‘normal’ house connection standards; can pass through Body Corporate (common property) land or other owners land within the strata and are considerably cheaper to create. It should be noted that even the title survey is cheaper for stratums (is dependent on the number of floors and the ‘type’ of title; must be Torrens Titles or converted to Torrens Title).

Let’s digress for a moment. Pre the advent of strata we dealt with high rise ownership by creating companies and selling shares in that company. There are still some of these title arrangements in existence. They are harder to deal with and lending authorities have shown a reluctance to lend when they are involved. They can be converted to strata.

In early years of strata development, the title created was simply ‘along the face of’ the walls of the building and the rest of the ‘open’ land became common property. As time progressed the need to create separate portions (that were still part of the title) became apparent. Areas such as parking, gardens, outdoor sheds etc became part of the subject title, even if they were not ‘connected’ to the house proper. It is now possible, subject to other parameters being satisfied, to have 100% of the horizontal component of the subject land in individual ownership i.e., no horizontal common property.

A word on measurement and title description. Traditional subdivision requires that the land descriptions are defined by a Survey Plan and relating documents with Bearings & Distances shown on the Plan of Title. This renders them capable of redefinition and offers security of ownership. A strata title can use such methods but only needs to in rare complicated circumstances; a stratum uses the occupation of the physical structures to define the boundaries; it is sufficient to describe the strata title boundaries by using such terms as "The Horizontal Lot Boundaries are Shown by Heavy Unbroken Lines Defined by (for example): Site Boundarys, The Face of a Masonry Wall, The Centre of a Paling Fence XY, The Edge of a Concrete Drive, The Prolongation of the Wall AB, Measurements Where Boundaries Are Open, (Measurements In Brackets Are For Boundary Fixation Only)" etc

Because strata development was also created to deal with ownership over several levels or floors, the title documents have a vertical component to them. A simple stratum would define the horizontal boundaries using terms such as those in the paragraph above, and in addition describe the Vertical Boundaries as, "The Vertical Lot Boundaries Extend From One Metre Below Ground Level To Ten Metres Above Ground Level" or similar.

A more complicated development over several levels could use the terms, "Except The Hatched Portions Which Extend Vertically To The Centre Of The Ceilings Above" or "The Hatched Portion Is Over Two Floors", etc.

Each strata level (floor, level, layer of the cake, strata) is shown on a separate sheet of the Strata Plan and carries such terms as Ground Floor, First Floor, Second Floor etc and has a separate area measurement for each floor. Hence the total area of the title is the sum of all the floors plus the areas of the carports, open ground, gardens (all applicable to that title) etc.

The early stages of a stratum development are like a traditional subdivision. Whereas levels, contours, town planning and service research is required in both cases, the lodgement of a Development Application with Council differs for a Stratum.

Council will require plan documents that reflect (including but not restricted to) the floor layout of all the structures proposed plus elevations, driveway layout, parking, visitor parking, turning areas, private open space, degree of access to sunlight etc to be shown on the application. This means that a substantial cost component is required up front before submission to Council. Also, as mentioned above, the title must be Torrens Title or converted to such a title (by survey).

Further, Strata Titles relate to land plus bricks and mortar. They therefore must include the construction of at least two dwellings to completion before council will seal the strata plan and allow separate titles to be created and sold, creating cash flow.

A note on this aspect of the Strata Act. Councils have discretion on how they interpret this section. Some Councils will allow more vacant strata sites than others (Hobart City for example will allow one vacant site on a development of a minimum of three proposed titles).

Advice therefore needs to be gained from the relevant council concerning this provision. It is important for cash flow reasons. There are other methods of dealing with staging of strata’s that can be applicable to each individual site.

The staging aspect of the strata process sometimes ‘scares’ new developers but if one views the construction requirements for traditional subdivision there is very little difference in the cash flow requirements.

Further reading at https://www.legislation.tas.gov.au/view/html/inforce/current/act-1998-01... Strata Scheme & Master Plan, Disclosure Statement, Exclusive Use Strata By-Laws, Sketch By Way of Illustration, Strata Title; Amendment to a Strata Title, Strata By-Laws plus this page, STRATA DISCUSSION IN GENERAL

Also, see attached booklet prepared by DPIPWE for an overview of strata obligations.