Strata and Owners Corporations in the ACT, Explained

Strata in the ACT is called "unit title"

If you are buying an apartment, townhouse or dual occupancy in Canberra, you are buying into a strata scheme. In the ACT it goes by a different name. What other states call "strata title" is here called "unit title". When land is subdivided and registered as a units plan, that creates individual units (the lots people own) plus common property shared by everyone in the scheme.

Two pieces of ACT legislation govern this area. The Unit Titles Act 2001 covers how land is subdivided into units and registered as a units plan. The Unit Titles (Management) Act 2011 covers the ongoing management of the scheme, the responsibilities of owners, and how decisions get made. The phrase "owners corporation act" that buyers often search for points to this management Act.

What an owners corporation actually is

An owners corporation (historically called a "body corporate") is the legal entity that is created automatically the moment a units plan is registered. You do not opt in. Every unit owner automatically becomes a member as soon as they become an owner. The owners corporation is responsible for the control, maintenance, management and administration of the common property in the mutual interest of all owners.

In practice, the owners corporation sets budgets, collects levies, arranges repairs and maintenance, holds insurance over the building and common property, and makes and enforces the scheme's rules. Owners elect an executive committee to handle day-to-day decisions, and the owners corporation can also appoint a professional managing agent. Note that smaller schemes are not exempt. A units plan with four or fewer units is now covered by the management Act's requirements rather than being left out as it once was.

Class A versus Class B units

Units are classified as Class A or Class B, and this affects what you own.

• Class A units are typically multi-storey, stacked apartments. You generally own to the midpoint of the floor, walls and ceiling, and your unit may include subsidiaries such as a car space, balcony or storage cage.
• Class B units are typically townhouses or dual occupancies. You own to the unit's outer boundaries, often including garages, gardens or carports.

Body corporate fees and the sinking fund

Levy contributions are set by the owners corporation's budget, which all owners vote on. As an owner you must contribute to the costs of repairs, maintenance and insurance for the common property. Those contributions are paid into different funds:

• the administrative (general) fund, for everyday running costs such as cleaning, gardening, insurance premiums and minor repairs;
• the sinking fund, for long-term capital works; and
• any special purpose funds the scheme has established.

The sinking fund is the one to understand before you buy. Any owners corporation with four or more units must establish and maintain a sinking fund. It exists to cover expenditure the owners corporation reasonably expects will be needed to keep the common property in good condition both now and into the future, things like repainting, roof replacement, lifts and major plumbing. It is deliberately separate from the day-to-day operating budget. A healthy sinking fund balance signals a scheme that is planning ahead. A thin one can mean a special levy lands on owners later.

What to read before you buy an apartment

For a unit sale in the ACT, the seller must include owners corporation and units plan information in the contract. Make sure you (and your conveyancer) actually read these documents.

• The registered units plan. Confirm the boundaries, your unit entitlement, and what is unit versus common property. Check that the car space, storage or balcony you expect is correctly shown.
• The unit title certificate (the "section 119 certificate"). Issued by the owners corporation under section 119 of the Unit Titles (Management) Act 2011, it must be included with the contract. It discloses financial information about the owners corporation's funds, insurance details including the certificate of currency, the names and contact details of the executive committee and any managing agent, and a summary of current service contractors. Under section 120, the owners corporation cannot deny the truth of what is stated in this certificate, so you can rely on it.
• The owners corporation rules. Default rules sit in Schedule 1 of the Unit Titles (Management) Regulation 2011, but a scheme can change its rules by special resolution (a high-threshold vote). Read the actual rules for this scheme. They can cover pets, parking, short-term letting and renovations.
• For off-the-plan purchases: check completion dates, final specifications, statutory warranties and insurance.

Common pitfalls to watch for

• Skipping the financials. A low quarterly levy can hide an underfunded sinking fund and a looming special levy. Read the fund balances in the section 119 certificate, not just the headline fee.
• Assuming you own more than you do. In a Class A apartment you typically own only to the midpoint of walls, floor and ceiling. The structure and common areas belong to the scheme.
• Not reading the rules. Restrictions on pets, parking or letting can affect how you live or invest.
• Forgetting disputes have a path. Disagreements about unit titles and owners corporations that cannot be resolved directly can be taken to the ACT Civil and Administrative Tribunal (ACAT).

Useful official sources

• ACT Government, Owning a unit
• ACT Planning, Buying a unit
• Unit Titles (Management) Act 2011 and Unit Titles Act 2001

This is general information compiled with AI assistance, not legal or financial advice. Rules and figures change, so confirm current details with the linked official sources and seek advice from a licensed conveyancer or solicitor before you buy.