Guides

The New Owner's Guide to Strata

Every term, every concept, every trap a new apartment owner needs to know. How levies work, who fixes what, what the committee does, what to watch out for, and when to get help.

8 July 2026 · 16 min read

On this pageWhat is strata?

When you buy an apartment in Australia, you buy into two things at once.

The first is your lot. The four walls, the floors, the air space, the bit you own outright. The second is the owners corporation, body corporate or strata company, the legal structure that owns and runs the building around your lot. Every owner is a member of that structure by law the day settlement happens. Nobody opts in. Nobody sends a letter of welcome. It just applies.

Most new owners discover this structure the hard way. The first special levy. The email from the committee about a water damage claim. The notice that the garage gate has been broken for three weeks and nobody can get their car out. The neighbour who installed a deck on common property without asking anyone.

This guide explains the terms, how the system works, who does what, where your levy money goes, what to watch out for and when to get professional help. It can close that gap before it costs you money.

What is strata?

Strata is a legal framework for shared property ownership. You own your lot individually, and you share ownership of the common property with every other lot owner in the scheme.

The word comes from "stratum". In the original 1961 NSW legislation, the idea was that you owned a horizontal slice of a building (a stratum) rather than a square of dirt. The concept has spread to every Australian state and territory since then, each with its own legislation, its own terminology, and its own quirks.

A strata scheme can be an apartment building, a townhouse complex, a mixed-use development with shops and residences, or in some states a detached-house community under community title. The form varies, but the structure is the same everywhere:

You own your lot.
Everyone together owns the common property.
A legal entity runs the scheme.
An elected committee handles day-to-day decisions.
You pay levies to fund operating costs and long-term maintenance.
You vote on major decisions at meetings.
You follow the by-laws.

That is the whole skeleton. Everything else is detail.

The legal entity

Every strata scheme has a legal entity that holds the common property, holds the insurance, enters contracts, and sues or is sued.

The name depends on where you live.

New South Wales, Victoria, ACT: Owners corporation.
Queensland, Tasmania, Northern Territory: Body corporate.
Western Australia: Strata company.
South Australia: Strata corporation (strata title) or community corporation (community title).

The entity is created automatically the day the strata plan is registered. Every lot owner becomes a member the day they buy. There is no membership fee, no application, no opt-out. The entity's obligations, including insurance, maintenance and compliance, are fixed by legislation regardless of whether the owners pay attention or not.

What the entity actually does: manages the finances, maintains the common property, enforces the by-laws, holds the insurance, contracts with service providers (strata manager, building manager, cleaners, lift technicians, gardeners), and reports to owners at least once a year at the AGM.

Who controls the entity: the owners, through votes at general meetings. But day-to-day control sits with the committee, which is elected by the owners.

The committee

The committee is a smaller group of owners elected at each AGM to handle the decisions that happen between general meetings. The scheme cannot call a meeting of all owners every time the gardener needs approval to trim a tree. The committee exists to handle those routine operational decisions.

Committee names vary by state: strata committee (NSW), council of owners (WA), executive committee (ACT). The function is identical.

What the committee can do

Approve spending within limits set by the budget, manage contractors, make operational decisions, enforce by-laws, prepare the budget for the AGM.

What the committee cannot do

Make decisions that materially affect owners' finances or property without a general meeting vote. The exact boundary is state-dependent, but the rule of thumb is: if it costs more than the committee spending limit, if it changes the building, or if it affects owners' rights, it needs a meeting of all owners.

Committee sizes, terms and election rules differ by state. In NSW, a committee can have 1–9 members. In Queensland, it depends on the number of lots. In WA, the council of owners has between one and seven members. Two-lot schemes effectively have the two owners as the committee.

Should you join the committee?

Yes, even if you can only spare an hour a month. Committees that lack owner engagement tend to be run by the strata manager by default. One engaged owner changes the dynamic. Two changes it more. Most buildings operate with zero or one committee member who actually reads the papers.

The strata manager

The strata manager (or body corporate manager in Queensland) is a professional administrator you may hire to handle the scheme's administrative work. They are not a member of the committee. They do not make decisions. They execute decisions the committee or the owners have made.

What a strata manager does

Issues levy notices, pays the scheme's bills from the trust account, prepares meeting agendas and minutes, handles compliance submissions (NSW Strata Hub, ACT register), procures insurance renewal, manages the statutory records, coordinates contractors.

What a strata manager does not do

Decide whether to replace the roof, approve a by-law change, choose the insurance policy that pays them the highest commission, override a committee vote.

Most building dysfunction starts in the relationship between the committee and the manager. A good manager flags issues early, points out compliance deadlines and keeps meetings running. A bad manager treats the committee as an obstacle, signs long contracts with automatic renewals, collects undisclosed commissions on insurance and trades, and buries fees in a twenty-page Schedule of Fees.

Red flags in the manager relationship

Contracts longer than one year with auto-renewal.
Commissions on insurance and trades disclosed in dollar terms (not percentages).
Schedule of Fees includes "disbursements" that are actually profit items (ink cartridges, postage, mileage).
The manager talks at meetings more than the chair.
The committee cannot log into the trust account or see the creditor list.

Levies, funds, and budgets

Every strata scheme runs on two bank accounts.

The operating fund

This pays for regular, predictable costs: insurance premiums, utility bills, cleaning, gardening, lift maintenance, fire service testing, strata management fees. These are the costs that happen every year and that you can forecast with reasonable accuracy.

The long-term fund

This pays for major capital work: roof replacement, lift modernisation, painting, driveway resealing, waterproofing. The building's major assets deteriorate on a cycle measured in years or decades, and the long-term fund is how the scheme saves for those eventual replacements so that nobody gets hit with a special levy every five years.

The names differ by state.

State	Operating fund	Long-term fund
NSW	Administrative fund	Capital works fund
VIC	Maintenance fund	Maintenance plan fund
QLD	Administrative fund	Sinking fund
WA	Administrative fund	Reserve fund
SA, TAS, ACT, NT	Administrative fund	Sinking fund

Levies and unit entitlement

Levies are the amounts each owner pays into these funds. Your share is determined by your unit entitlement (or lot liability, in Victoria and Queensland). Unit entitlement is a number assigned to your lot based on its relative value. If your unit entitlement is 10 and the total for the scheme is 1000, you pay 1% of every levy.

Special levies

These happen when the long-term fund does not have enough money to cover a major cost. The budget assumed the roof would last another five years. It did not. The long-term fund has $30,000. The roof costs $80,000. The owners vote to raise a $50,000 special levy, distributed by unit entitlement.

Special levies are the single biggest financial trap for new owners. They often follow years of underfunding the long-term fund to keep levies artificially low and units more saleable. Low levies without a capital works plan usually mean maintenance costs have been deferred to whoever owns a lot when the roof finally leaks.

What a healthy budget looks like

The operating fund breaks even or runs a small surplus.
The long-term fund is funded at the level recommended by a ten-year capital works plan.
The capital works plan has been updated in the last three years.
There has been no special levy in the last five years, or if there was, it was for a genuine emergency, not for a predictable item the building should have saved for.

Common property vs your lot

One of the first things a new owner needs to understand: who fixes what.

Your lot

This is what you own. In an apartment, this is typically the internal air space: the walls as lined, the floors as laid, the ceiling as finished. Your lot does not include the structural walls, the external façade, the roof, the common staircase, the foyer, or the garden. It does not typically include windows on higher floors (those are common property in most states), though it does include the internal fixtures, such as your kitchen and bathroom fittings, your internal doors, and your floor coverings.

Common property

This is everything else: the building structure, the land, the lobbies, the lifts, the stairwells, the roof, the garden, the driveway, the pool, the gym, the external walls, the windows (usually), the garage driveways, the fire systems, the electrical infrastructure serving more than one lot.

The boundary varies by state. In NSW and Queensland, it is defined by reference to the strata plan. In Victoria, it is defined by the owners corporation rules and the plan of subdivision. A reasonable rule of thumb: if removing it would affect another lot or the building structure, it is probably common property.

What this means for repairs

Your internal tap leaks and damages your vanity. The repair is your cost.
The common wall between your bedroom and the neighbour's bedroom has rising damp. That is the owners corporation's cost.
The window in your living room leaks. In most states, the window frame is common property, so the owners corporation fixes the leak, but you may be responsible for cleaning and maintenance of the glass.
The garage roller door breaks. Common property, so the owners corporation repairs it and recovers the cost through levies.

Renovations interact with this boundary constantly. Installing new floorboards in your lot is fine with approval. Cutting into a common wall to install a passthrough or removing a structural element is not fine without special resolution of the owners corporation. Many new owners discover this after they have already paid the contractor.

By-laws

By-laws are the rules that govern behaviour in the building. Every scheme has them, and they are legally enforceable against both owners and tenants.

Standard by-laws are set out in each state's legislation and apply automatically when the scheme is registered. The scheme can add, amend or remove its own by-laws by special resolution (typically 75% of the vote) at a general meeting. A by-law cannot override legislation or restrict a right that the legislation specifically grants.

Common by-law topics:

Pets. Most states now permit pets by default, or at least do not allow blanket bans. The details vary. NSW 2026 reforms mean an owners corporation cannot unreasonably refuse a pet application. Queensland's law is similar. Individual schemes can impose conditions (the pet must be registered, the owner must keep it on a leash in common areas) but not blanket bans.
Noise. Standard by-laws in every state restrict noise that interferes with the peaceful enjoyment of other lots. The specifics (quiet hours, musical instruments, power tools) vary.
Parking. Common by-laws restrict visitor parking, designated spaces, and parking in driveways or fire lanes. One of the most common flashpoints in any scheme.
Renovations. Most schemes require owners to submit renovation applications, pay a bond, and follow approved timeframes and tradespeople access rules.
Common property use. Storage on balconies, BBQs, clothes drying, plants, furniture in hallways. These are the by-laws nobody reads and everyone discovers when the committee sends a notice.

Enforcement works like this: the committee sends a notice of breach. If the behaviour continues, the owners corporation can issue a compliance notice, impose a fine (limited by state legislation, $550 in NSW for example), or apply to the tribunal for an order. In practice, most disputes are resolved with a polite letter before any formal steps.

Meetings

Owners meet as a group at least once a year at the Annual General Meeting (AGM). Between AGMs, Extraordinary General Meetings (EGMs) can be called to deal with specific issues that cannot wait.

The AGM does this:

Presents the previous year's financial statements.
Approves the coming year's budget and sets the levies.
Elects the committee.
Appoints the strata manager (if applicable).
Appoints the auditor (if required by the scheme's legislation).
Considers motions from owners and the committee.
Renews insurance.

The notice period for an AGM is set by state legislation (typically 14–30 days). The meeting papers include the agenda, the financial statements, the proposed budget, the insurance renewal, the auditor's report if any, and any motions submitted by owners.

How to prepare for an AGM:

Read the meeting pack, especially the financials. Check whether the budget balances. Check whether the capital works fund is being funded at the level the capital works plan recommends. Look at what the committee actually spent money on last year. Look at what insurance renewal costs. If the manager is proposing a new contract, read the Schedule of Fees. Any owner can submit a motion for the agenda by the deadline stated in the notice.

Proxy voting. If you cannot attend, you can appoint a proxy to vote on your behalf. The proxy must be an individual (another owner, a family member, or in some states any person). The proxy form is part of the meeting pack. In NSW 2026 reforms, proxy restrictions were tightened to limit how many proxies one person can hold.

EGMs are called for a single purpose or a small set of purposes: approving a major repair, changing a by-law, considering a special levy, dealing with an urgent compliance order. The notice period is shorter than for an AGM.

Quorum is the minimum number of owners (or proxies) required for the meeting to proceed. If quorum is not reached, the meeting is adjourned and reconvened, often with a lower quorum. The quorum rules are state-specific.

Insurance

The owners corporation is legally required to insure the building. Your personal contents are not included.

What the scheme insures: the building structure, common property, public liability for common areas, and in some states replacement cover for fixtures and fittings in lots (NSW requires this). The policy is in the owners corporation's name.

What you need separately: contents insurance for your personal belongings (furniture, electronics, clothing, carpets that you installed, kitchenware). If you are renting the apartment out, landlord insurance for loss of rent, tenant damage, legal liability. Most new owners do not realise that their landlord's separate building insurance is the owners corporation's responsibility, not their own, and they also do not realise they need their own contents policy.

The insurance landscape in 2026 is difficult. Premiums have risen sharply across Australia, driven by higher reinsurance costs, more frequent extreme weather events, and rising construction costs that increase the insured value of every building. Schemes that have not adjusted their insured value to reflect construction cost inflation are underinsured. If the building is destroyed, the insurance payout will not cover rebuilding.

Risk management matters for premiums. Schemes with active fire system maintenance, a current capital works plan, no history of large claims, and modern safety systems pay meaningfully less for insurance. Schemes that have deferred maintenance and have a few water damage claims per year pay more.

Disputes

Strata is shared living, and shared living generates disputes. The most common are noise, parking, pets, smoking, caravans or trailers, renovations without approval, and unpaid levies.

The dispute resolution ladder, from lowest to highest cost:

Talk to the other owner directly. Most disputes resolve at this level.
Send a formal letter. The committee or manager can issue a by-law breach notice.
Mediation. A neutral third party helps the parties reach an agreement. Many state tribunals require mediation before a hearing.
Tribunal application. Each state has a dedicated forum: NCAT (NSW), VCAT (VIC), QCAT (QLD), SAT (WA), SACAT (SA), ACAT (ACT), NTCAT (NT).
Court (rare, only for complex legal questions or where the tribunal cannot grant the remedy).

Tribunal applications cost a filing fee (typically $50–$200 depending on the state) and do not require a lawyer, though many parties bring legal representation for complex matters. The tribunal can make orders about by-law compliance, levy payment, access for repairs, and in some states compensation.

Talk first, document everything and keep the letter polite. Go to tribunal only when the other options have failed. Most tribunal applications settle before the hearing date anyway.

Red flags for new owners

If you are buying or have just bought, here is what to look for in the building you are joining.

No capital works plan. This is a strong warning sign of financial trouble. Without a plan for the next ten years of capital expenditure, the scheme is flying blind: levies are likely too low now and will spike when something breaks.

Low levies with no special levy history. This is often a problem. The building may be new and have had no major failures yet, or previous owners may have starved the funds to keep it attractive to buyers. The next owners carry the catch-up cost.

No insurance claims history disclosed. A well-run building can produce and explain its claims history. If a building says it has no claims, check whether anyone has verified that. Ask for the claims history.

High dispute volume in the minutes. If every AGM and EGM mentions disputes, by-law enforcement, or legal letters, the building has a culture problem. It is fixable, but you should know what you are walking into.

Strata manager contract exceeds three years with auto-renewal. Long contracts reduce the building's ability to change provider. Auto-renewal means you have to actively cancel. If you miss the window, you are locked in for another term.

Embedded electricity or gas network. A private network that the developer put in place, where you cannot choose your electricity retailer. The building may be charging above-market rates. Ask before you buy.

Your rights and responsibilities

Your rights

You have the right to:

Inspect the scheme's records (minutes, financial statements, contracts, insurance, by-laws) on request.
Attend and speak at general meetings.
Vote on motions, either in person or by proxy (levy-paying lots only; if you owe money, your vote may be restricted).
Stand for election to the committee.
Propose motions for the agenda.
Apply to the tribunal for orders to resolve disputes.
Request a copy of the strata roll (the list of owners).

Your responsibilities

You have the responsibility to:

Pay your levies on time. Unpaid levies attract interest and recovery costs, and the owners corporation can eventually force sale of your lot to recover the debt in some states.
Follow the by-laws. As an owner, you are liable for your own conduct and in most states for the conduct of your tenants and guests.
Maintain your lot so it does not cause damage to common property or other lots.
Notify the owners corporation or manager of any issue affecting common property or other lots (leaks, structural issues, safety hazards).
Not undertake renovations that affect common property or the building structure without the required approvals.

Quick glossary

AGM (Annual General Meeting): the mandatory yearly meeting where the budget is approved, the committee is elected, and levies are set.
Body corporate: the name for the owners corporation in Queensland, Tasmania and the Northern Territory.
By-laws: the building's rules, legally enforceable against owners and tenants.
Capital works fund (CWF): the account that holds savings for long-term capital replacement (called a sinking fund in most states).
Common property: everything outside your lot boundaries, including the structure, land, shared spaces, and building systems.
Committee: the elected group of owners who handle day-to-day decisions between general meetings.
Disbursements: costs the strata manager passes through to the scheme (and sometimes marks up).
EGM (Extraordinary General Meeting): a meeting called between AGMs to decide a specific issue.
Levies: the regular contributions each owner pays to fund the scheme's operating and capital costs.
Lot: your individually owned apartment or townhouse.
Lot entitlement / unit entitlement: the number that determines your share of levies, votes and insurance.
NCAT, VCAT, QCAT, SAT, SACAT, ACAT: the tribunals that hear strata disputes in each state.
Owners corporation: the legal entity that owns common property and runs the scheme (NSW, VIC, ACT).
Proxy: someone authorised to vote on behalf of an absent owner.
Schedule of Fees: the document listing every charge a strata manager imposes, often where hidden fees live.
Section 184 certificate: the disclosure document a seller must provide to a buyer in NSW.
Special levy: a one-off levy raised to cover a cost the scheme could not pay from its existing funds.
Strata manager / body corporate manager: the professional administrator hired to handle the scheme's day-to-day operations.
Strata report: a pre-purchase inspection of the scheme's records commissioned by a buyer.
Unit entitlement: see lot entitlement above.