Of Rocks And Other Layered Formations

In the strata world there is much to be confused about. The use of the term ‘strata’ itself is curious. Strata are the plural of stratum, the geological formation.

It also has distinct meanings in the ecological and sociological worlds. Broadly it connotes layers, portions or divisions hence its application in Australia to the subdivision of land, buildings and airspace to separately titled property and shared common property and facilities. We could have used the term ‘condominium’ or ‘homes’ as the Americans do to describe these spaces but instead, we chose a geological term. Now it will probably stick, as these linguistic accidents of history tend to do.

An arrangement for the strata title subdivision and its management is called a strata scheme. A scheme has been judicially defined, in the context of managed investments, as existing where there is a ‘coherent and defined purpose, in the form of a programme or plan of action, coupled with a series of steps or course of conduct to effectuate the purpose and purse the programme or plan ‘(ASIC v Takaran (2002) 20 ACLR 1732 at 1737 per Barrett J)’. To some who have attended a meeting of strata title owners, that a scheme, so defined exists, may be a matter of conjecture? Often there is nothing coherent or purposeful at all at strata meetings.

To others a strata scheme will imply a tax dodge – we have learned to be distrustful of schemes and schemers. Why would we want to belong to a scheme of any kind? No good comes of schemes. Nevertheless the term scheme is used to describe an arrangement of strata titled property in every Australian state and territory save for Victoria and the Northern Territory where the more accurate and less sinister property terms, ‘plan of subdivision’ / and ‘unit title’ are used.

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