Every strata title property has its own strata corporation. The role of a strata corporation is to administer and maintain the common property for the benefit of all unit holders, to administer all other property of the corporation, and to enforce the articles of the strata corporation [Strata Titles Act 1988 (SA) s 25].
All unit holders are automatically members of the corporation [s 18(4)], but tenants are not.
Note that unit holders are guarantors of their corporation's liabilities, which means the corporation's debts are enforceable against each or any of the unit holders directly [s 21(1)]. If the corporation has a debt, the unit holders have, amongst themselves, the right of contribution to the debt based on their respective unit entitlements [s 21(2)].
The corporation must have a common seal [s 18(3)], which may be used for entering contracts, and must be used if the corporation wishes to amalgamate with another strata corporation.
The strata corporation can delegate some or all of its functions to a management committee and may appoint a strata manager or other such agent to assist with the management of the corporation.
The corporation can make rules which are binding on the corporation, unit holders and tenants regarding the use of common property and the units [ss 19, 20], providing that the rules do not contravene the Strata Titles Act 1988 (SA) or other laws.
The common property is held by the strata corporation in trust for all the unit holders [Strata Titles Act 1988 (SA) s 10]. It is the responsibility of the corporation to maintain the common property, while it is the responsibility of individual unit holders to maintain what is not common property, that is, to maintain their own units (article 1, Strata Corporation Articles].
Thus, for example, a unit holder is not required to clean the gutter attached to their unit, this is the corporation's responsibility.
What is common property?
The question of what is and what is not common property is a difficult issue, and can cause many disputes. Generally speaking, common property is any land or space that is not within a unit [s 5(6)]. Unless a particular strata plan indicates otherwise, the boundary of a unit is the internal surface of the walls, floors and ceilings [s 5(5)]. In most strata corporations, the roof, guttering, external walls and foundations are common property. Internal walls are the owner's responsibility.
Common property also includes [s 5(6)]:
In older strata plans that were deposited before 1 September 1988, the unit boundary was defined as midway between the surfaces of walls, floors and ceilings and this definition continues today, unless it has been changed by an amendment to the strata plan. Legal advice may be necessary to determine the correct boundaries of strata plans deposited before 1 September 1988.
A unit may also include an area defined on the unit plan as a 'unit subsidiary', which is not common property but an area for the exclusive use of a particular unit, for example a carport or garden [s 5(4)(e)]. Unless the strata plan explicitly states otherwise, a wall or fence between a building that forms part of a unit and a unit subsidiary to that unit is part of the common property [s 5(7)].
Some of the powers of the strata corporation are to:
Contracts
The strata corporation may enter into any kind of contract [s 26(1)(e)]. It may do so either by using its common seal, or by authorising an officer of the corporation or an agent (such as a strata manager) to do so on its behalf [s 24].
Contributions
The corporation raises funds by levying contributions against all unit holders, in accordance with an ordinary resolution passed at a general meeting [s 27(2)]. The amount that each unit holder contributes to funds is normally calculated according to the 'unit entitlement' set out in the strata plan [s 27(3)(a)]. Put simply, a unit entitlement is the portion, or ratio, of the capital value of a unit as against the sum of the capital values of all the units [s 6]. The corporation may, by unanimous resolution, determine that contributions are paid on some other basis [s 27(3)(b)].
The corporation may, by an ordinary resolution at a general meeting, allow contributions to be paid in instalments, as specified in the resolution [s 27(4)(a)].
If contributions are not paid, they are recoverable as a debt [s 27(5)] and the corporation can sue the unit holder for the money.
The corporation can charge interest payable on contributions or instalments that are in arrears, by ordinary resolution [s 27(4)(b)]. The amount of interest charged may not be more than 15% per annum, and interest cannot be charged on unpaid interest [Strata Titles Regulations 2018 (SA) reg 11].
Maintenance and repairs - entry to premises
The corporation’s articles will usually impose a duty on a unit holder to maintain and repair their unit. If a unit holder does not do so, the strata corporation may give a unit holder written notice requiring them to carry out specific work by a certain time. If the work is not done in the set time, the strata corporation may, after giving at least two days notice in writing to both the unit holder and the occupier (for example, any tenant), authorise workers to enter the unit to do the work [Strata Titles Act 1988 (SA) s 28(1), (2), (3)].
Similarly, the corporation may require and enforce work on a unit to remedy a breach of the Act or the articles even if the breach was by a former unit holder, an occupier (tenant) or former occupier [s 28(1)].
If an officer of the corporation or a person authorised by the corporation (such as a strata manager) is satisfied that urgent action is necessary to avert a risk of death, injury or significant damage to property, the officer or authorised person can, after giving whatever notice (if any) to the unit holder and occupier they consider reasonable in the circumstances, authorise entry to a unit for the performance of work reasonably necessary to deal with the risk. To enter the unit, such force as is reasonably necessary may be used [s 28(3a), (3b)].
The individual unit holder is liable to the corporation for the reasonable cost of work done [s 28(4)]. If the need for the work arose because of someone else, for example a tenant or previous owner, the unit holder can recover the cost as a debt from that person [s 28(5)].
Return of property
A strata corporation may require anyone in possession of any record, key, or other property of the corporation to return it to an officer of the corporation by a specified time. The person in possession of the property must be given written notice to return the property, and the specific person it must be given to must be stated in the notice [s 39]. Failure to comply with the corporation's requirement is an offence with a maximum penalty of $2 000.
A strata corporation must have building insurance [Strata Titles Act 1988 (SA) s 30] and public liability insurance [s 31]. A strata corporation with an administrative or sinking fund must have fidelity guarantee insurance [Strata Titles Regulations 2018 (SA) reg 14(2)]; Strata Titles Act 1988 (SA) s 31(2a)]. A corporation may also, by special resolution, decide to insure against other potential liabilities, for example, office bearer liability.
A unit holder, a mortgagee of a unit or a prospective purchaser or mortgagee of a unit may, by contacting the secretary of the strata corporation, request to see any or all of the insurance policies currently held by the corporation [Strata Titles Act 1988 (SA) s 32].
Building insurance
The strata corporation must insure buildings and building improvements to replacement value [s 30], which includes any costs associated with replacement, such as demolition, surveying, architectural or engineering work. The insurance must cover damage caused by the events, apart from subsidence, listed in regulation 19 of the Insurance Contracts Regulations 2017 (Cth) [see Strata Titles Act 1988 (SA) s 30(3)]. Under no circumstances can a corporation permit each unit holder to take out their own individual building insurance instead of the corporation.
The corporation’s building insurance will not usually cover the contents of a unit, so occupiers may need to take out their own contents and public liability insurance. The provisions of both policies should be checked to ensure there are no items left unprotected, such as a carport.
Public liability insurance
The strata corporation must have public liability insurance for an amount specified in the regulations, currently at least $10 million [Strata Titles Act 1988 (SA) s 31; Strata Titles Regulations 2018 (SA) reg 14(1)].
Fidelity guarantee insurance
A strata corporation with an administrative or sinking fund must have fidelity guarantee insurance [Strata Titles Act 1988 (SA) s 31(2a); Strata Titles Regulations 2018 (SA) reg 14(2)]. A policy of fidelity guarantee insurance covers the risk of theft or fraud of the corporation’s funds by any person authorised to handle the corporation’s funds, including a manager. Although the requirement to have fidelity guarantee insurance was a new requirement introduced in October 2014, a strata corporation may have already had fidelity guarantee cover included with its building insurance policy. The insurance cover must be for the amount of the maximum total balance of the corporation's bank accounts at any time in the preceding three years, or $50 000, whichever is higher [Strata Titles Regulations 2018 (SA) reg 14(2)(a)]. Strata corporations with no administrative or sinking funds are not required to maintain fidelity guarantee insurance [see reg 14(2)(b)].
At all times a strata corporation must have a presiding officer, a secretary and a treasurer, who are appointed at a general meeting. One person may hold two or more of these positions. These officers must be unit holders (unless all the units in the corporation are non-residential). The strata corporation commits an offence if any of these positions is allowed to remain vacant for more than six months [Strata Titles Act 1988 (SA) s 23]. A strata manager can assist in running the affairs of the corporation.
Secretary
The secretary of a strata corporation has the following functions [Strata Titles Regulations 2018 (SA) reg 10(1)]:
Treasurer
The treasurer of a strata corporation has the following functions [Strata Titles Regulations 2018 (SA) reg 10(2)]:
The strata corporation has a responsibility to maintain proper records. It must keep:
A strata corporation must ensure that a statement of accounts is prepared for each accounting period [s 40], and must keep each statements of account for 7 years [reg 30(c)].
Insurance policies
A unit holder, a mortgagee of a unit, or a prospective purchaser or mortgagee of a unit may, by contacting the secretary of the strata corporation, request to see any or all of the insurance policies currently held by the corporation [Strata Titles Act 1988 (SA) s 32]. No fee is applicable.
If the applicant wishes to have copies of the current insurance policies, the request may be made either to the secretary or a member of the management committee [s 41(3)]. If the applicant is the owner of a unit, an $8 fee applies [Strata Titles Regulations 2018 (SA) reg 31(2)(b)(i)]. If the applicant is a mortgagee of a unit, or a prospective purchaser or mortgagee of a unit, a $56 fee applies [reg 31(2)(b)(ii)].
The corporation must make the information available within five business days after the request [Strata Titles Act 1988 (SA) s 32, s 41]. Failure to do so is an offence with a maximum penalty of $500.
No fee is payable for simply viewing the insurance policies. For copies of the insurance policies, if the applicant is the unit holder, an $8 fee applies [reg 31(2)(b)]]. If the applicant is a mortgagee of a unit, or a prospective purchaser or mortgage or a unit, a $56 fee applies [reg 31(2)(b)(ii)].
Bank statements
On the request of a unit holder made through the secretary or a member of the management committee, a corporation that does not have a strata manager must provide a unit holder with quarterly bank statements for all accounts maintained by the corporation, and must continue to provide the statements until the person ceases to be a unit holder or revokes their application [s 41(1a)]. Failure to do so is an offence with a maximum penalty of $500.
If a corporation has a strata manager, application can be made to the strata manager for quarterly financial statements (see Duties of strata managers).
Other information in relation to a unit or the corporation
A unit holder, a mortgagee of a unit, or a prospective purchaser or mortgagee of a unit (or someone on their behalf) may apply to the strata corporation, through the secretary or a member of the management committee, for access to the following information or documents [s 41(1)]. The information or documents must be provided within five business days after the request [s 41(1)]. Failure to do so is an offence with a maximum penalty of $500.
The corporation may reduce or waive any of the specified fees [Strata Titles Regulations 2018 (SA) reg 31(4)].
Information to be provided:
If the applicant is the owner of a unit, no fee applies [Strata Titles Regulations 2018 (SA) reg 31(2)(a)(i)]. If the applicant is a mortgagee of a unit, or a prospective purchaser or mortgagee of a unit, a $40 fee applies [reg 31(2)(a)(ii)].
Copies of documents to be provided:
If the applicant is the owner of a unit, an $8 fee applies [Strata Titles Regulations 2018 (SA) reg 31(2)(b)(i)]. If the applicant is a mortgagee of a unit, or a prospective purchaser or mortgagee of a unit, a $40 fee applies [reg 31(2)(b)(ii)].
Documents to be made available for inspection:
No fee applies to inspecting a copy of the contract with a strata manager or the register of unit holders. If the applicant is the owner of a unit, no fee applies to inspect other documents [Strata Titles Regulations 2018 (SA) reg 31(2)(c)(i)]. If the applicant is a mortgagee of a unit, or a prospective purchaser or mortgagee of a unit, an $8 fee applies [reg 31(2)(c)(ii)] in relation to accounting records, minutes and s 38(3) documents.
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