Torrens, Strata and Community Titles. What is the Difference?

Are you currently searching for property and coming across the terms Torrens, Strata and Community Titled – Do you know what they mean and their significance in your property purchase? It is important that purchasers understand the type of ownership they are undertaking and how they can impact them.

At VARO we are committed to educating and helping our purchasers navigate property contracts and exploring ownership options that suit their individual needs and circumstances.

 

Torrens Title

Torrens Title is the highest form of property title in Australia and is based on the notion of ‘ownership by registration. When you register your ownership of land with the Land Titles Office, you are properly registering yourself as the owner of the land and that you are the owner despite all other claims and that ownership is indefeasible.

Before the Torrens Title was introduced in 1858, landowners would have to show a ‘good route of title’ (supply proof of their ownership of the land), by showing the history of ownership back by many generations. This is now called the ‘old system title’.

If you own something in Torrens Title, it means that you own the land and the building on the land, to the exclusion of all others who are not registered on the title. Torrens Title is currently the most common form of land ownership in Australia and this system has been adopted in a number of other countries including Canada, Ireland, Israel and a number of States in America.

 

Strata Title

A Strata Title is ideal for ownership of larger, multi-level building, where the ownership of each unit is separate but no individual unit owner owns the physical building which is comprised of the unit, or the land on which the building is situated.

The building itself and the land is referred to ‘common property’ and includes such things as entrance ways, hallways, car-parks, driveways and any other amenities such as swimming pools, gyms, tennis courts, rooftop gardens, etc. No single unit owner can or will own any of these areas. All each unit owner owns is the space inside their unit.

The way in which the common property is managed is through the creation of a company, to which all the individual unit owners become members. All members of this ‘Owners Corporation’ have the right to participate in the decision making of he company.

The Owners Corporation becomes responsible for maintaining and repairing common property, taking out insurances, managing the company’s finances, keeping records and administering the by-laws.

The Owners Corporation is financed by the levies that are raised against each of the units. Levies are usually paid every 3 months. The levies that a particular unit owner will be required to pay is determined by the ‘unit entitlement’ attributed to that unit.

When the developer first registers the development as a strata plan they give the entire building an ‘aggregate unit entitlement’. A share of the unit aggregate is then attributed to each individual unit based on their value. In most cases the allocation of unit entitlements will need to be carried out by a qualified valuer.

The higher the unit entitlement is for any particular unit, the more the owner must pay in levies to the Owners Corporation. The unit allocation can also impact voting rights, so it is important that the allocation is done both properly and fairly.

 

Community Title

Community Title can be described as a mix of Torrens and Strata. It is a type of subdivision which allows for shared property to be created within a regular Torrens Title ownership.

As an example, lets use a gated estate as an example. Within the estate there are 10 houses, each separated by boundaries and each with different owners. Each individual owner owns the house and all of the land on which the house is sitting on.

At the centre of the estate is a maintained garden, tennis court and parking area and in order to enter the estate you need to pass by an electric gate, which is monitored by a security company.

In this example, each owner still owns their individual house and land, but they will all share common amenities including the security system, entrance gate, tennis court, garden and parking area.

However, a set of community by-laws would affect how each owner can use or not use their land, similar to the way in which strata by-laws operate.

Each owner would still be responsible for contributing to a joint fund, in order to pay for such things and maintenance and repair to common property.

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Torrens, Strata and Community Titles. What is the Difference?