TITLE GUIDE
Many people ask what is the difference between Green Title and Strata Title in Perth? These are the two common forms of titling for residential development in Western Australia.
Green Title is the Freehold Title to a single parcel of land, also known as Torrens Title, and the most common type of land ownership. This usually applies to a typical residential suburban house with its own yard. Some townhouse or courtyard blocks also have Green Title. As a Green Title owner you are responsible for the cost of all rates, services, maintenance and improvements to the property.
A Strata Scheme is a general term referring to all types of Strata subdivisions that divide a parcel of land or buildings into lots, allocate unit entitlement and establish the rights and obligations of proprietors to use, and maintain the lots and common property. Two types of Scheme are permitted under the Strata Titles Act 1985 – Strata Plans and Survey-Strata Plans, thus a Strata Scheme can contain Strata Title lots or Survey-Strata Title lots, but not both.
Originally Strata Titles were introduced to provide separate ownership of individual units in multistorey buildings. The current Strata Titles Act allows the division of a single land title (or Green Title) into smaller lots and, nowadays, ground level developments are included, which has seen Strata Title subdivisions become popular over recent years. Strata Titles are created by lodging a Strata Plan of subdivision or Survey-Strata Plan of subdivision over a single land title (or Green Title) lot creating Strata or Survey-Strata lots respectively. Duplexes, triplexes, townhouses, villas and units are usually on Strata Titles.
A Survey-Strata Plan is the mechanism for creating Survey-Strata Schemes and Survey- Strata Titles under the Strata Titles Act 1985 Amended. Survey-Strata Plans define the lots in a Survey-Strata Scheme – the areas in the scheme owned individually. Common property areas owned jointly by all lot owners may, or may not, exist in Survey-Strata Schemes and are defined as “common property lots”. Survey-Strata lots are not generally limited in height and/or depth. No buildings are shown on Survey-Strata Plans. For Unit Entitlement on a Survey-Strata Plan, see below.
Purple Title is not very common any more since it was the precursor to Strata titling. Many have been changed to Strata Schemes although some still exist. Purple Title gives exclusive rights to owners of a dwelling that exists with other dwellings on one Green Title lot. Each owner is a tenant in common. Banks do not like Purple Titles so it is hard to borrow against, or mortgage them.
Built Strata Plan is similar to a Strata Plan except the lot is subdivided after the buildings have been constructed, and shows the boundaries, common areas and buildings. Built Strata are recommended for developments of five or more units and mandatory for multilevel apartments. This allows the corporate body to regulate the placement of satellite dishes, air conditioning units etc., and to act against disruptive behaviour and problems amongst title holders of the Plan.
Common Property refers to the areas jointly owned by title holders in the Strata Scheme, not contained within any individual lot. Many Strata owners believe there is no Common Property in their scheme, and that they own the whole of ‘their Strata unit” (i.e. the building in which they live) and the surrounding garden and carport area. However, in many cases this is not correct.
Due to changes to the Strata Titles Act, and different ways in which Strata Plans have been prepared, a number of individual ownership/common property scenarios exist. Generally, Common Property on Strata Plans is any land not contained within a lot shown in the Plan. Common Property in a Survey-Strata Plan is noted with the letters “CP” and can be seen in red on the examples shown above.
Unit Entitlement: The Strata Titles Act (STA) defines Unit Entitlement as establishing the following:
- The voting rights of a proprietor
- The undivided share of each proprietor in the common property
- The proportion payable by each proprietor of strata levies and other expenses in common
The relative proportion of each owner’s share in the scheme from which Unit Entitlement is derived has to be set by a Licensed Valuer.
The Unit Entitlement Schedule
Note how calculation of Unit Entitlement changes according to what kind of Strata Plan it is.
- In a Strata Plan, Unit Entitlement is calculated on the gross rental value of the buildings on a lot (basically the size of buildings).
- In a Survey-Strata Plan, Unit Entitlement is calculated on the unimproved land value, generally the area of the lots, and ignores the value of any buildings present.
- In a Built Strata Plan, Unit Entitlement is calculated as a combination of gross rental value (size of buildings) and unimproved land value (lot size).