Introducing leasehold strata
A new form of land ownership called leasehold strata has been introduced in WA
- Leasehold strata title is essentially a strata or survey-strata scheme that is set up for a fixed term between 20 and 99 years.
- Leasehold schemes are already being used successfully in other states and overseas.
- Leasehold strata schemes will provide more housing options and can be used to support more affordable housing and the development of strategic sites, such as those around train stations and near major transport corridors.
Who needs to know?
- Property developers
- Potentially land owners with land they cannot sell (e.g.: churches and universities)
What is leasehold strata?
- There will be a strata lease for each lot in the scheme and each strata lease comprising the leasehold strata scheme will expire on the same date.
- Leasehold strata schemes will have a fixed lifespan of between 20 to 99 years.
- Each owner of a lot will have a certificate of title for the leasehold interest in the lot and the lot’s share in any common property of the scheme.
- The land in the scheme reverts to the owner of the freehold (owner of the leasehold scheme) on expiry or early termination of the scheme.
- Living in a leasehold strata scheme will be very similar to living in a freehold strata scheme, except that the scheme has a fixed lifespan.
- There will be strata meetings and the leasehold lot owners are a strata company that has functions including organising repairs and insurance for the scheme buildings and common property.
- The owner of the leasehold scheme will have a limited role in the day-to-day running of the scheme.
- After the expiry of the leasehold scheme, the land and buildings return to the owner of the leasehold scheme.
Leasehold strata might be used for:
- Freehold land (which can’t be sold) – for example, sometimes churches or institutions such as universities might be bequeathed land which has a restriction placed on it that the land must be kept for specified purposes and not sold.
- Land being held for future uses – for example, a land developer may be required to build a shopping centre in an area of new housing. While there is initially not the population to support developing anything large, in the interim the developer may create a leasehold commercial strata scheme so the shop owners will have the security of knowing they can stay for 20 years (or more) and the developer has the security of knowing that the land will be ready for redevelopment at the end of that time.