Types of Multi Unit Ownership in Victoria

By Owen Day

In Victoria, there are currently three different forms of multi unit ownership which have developed over time to what is now referred to as a Strata Title.

Each with unique legal and practical implications.

1. Company Share Scheme 

The initial form of multi unit ownership was structured under a company share scheme with the first such unit developments appearing in the 1930’s. In this model:

• A company owns the entire property.

• Buyers purchase shares in the company, giving them the right to occupy a specific unit.

• This form of ownership is governed by the company’s Memorandum & Articles. which sets out the rules and regulations of the development

The company’s Board of Directors controls management decisions and whilst the rules and regulations of the company are not governed by the current legislation, the Owners Corporation Act 2006, there are comparisons.

2. Stratum Title

Stratum title superseded Company Share after the introduction of the Stratum Estates Scheme in 1960. Under this system:

• An owner holds a freehold title to their unit or lot, which may include a car space or storage unit.

• A separate company owns the common property, and each owner holds shares in that company.

Similar to a Company Share, a Service Company manages the common property and enforces rules which are contained with the company’s constitution & rules.

3. Strata Title

Strata title is the most recent & common form of ownership for apartments, townhouses, and units within a multi-dwelling complex following the Stratum Title being replaced by the Strata Titles Act in 1967, introducing bodies corporates, now referred to as owners corporations. The current version of this legislation being the Owners corporation Act 2006. 

When you purchase a strata-titled property, you own:

• A private lot – the apartment, unit, or townhouse.

• This lot may incorporate a car space or storage space or, alternatively, there may be an accessory unit or lot.

• A share in common property – shared areas such as driveways, gardens, stairwells, lifts, and gyms.

An Owners Corporation (OC) is responsible for managing the common property, including maintenance, insurance, and compliance with regulations.

Key Considerations in Multi Unit Ownership

• Fees: Regular contributions are required for maintenance and administration.

• Rules & Bylaws: All multi unit forms of ownership have regulations, either under the Owners Corporation Act of by the Company’s Articles or Constitution. 

• Voting Rights: Decisions on common property are made collectively either through the Owners Corporation or the Company.

Each type of multi unit ownership has different implications for management, responsibilities, and property rights, so it’s important to understand the specific structure.