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If you have been house hunting around St Kilda, Elwood or Hawthorn and spotted a listing that says 'stratum title', you are looking at an older style of ownership that still pops up across Melbourne. In simple terms, a stratum title usually gives you two things at once: ownership of your individual lot, and a share in a separate 'service company' that owns and manages the common property, such as the driveway, stairwells and garden. That service company sits under the Corporations Act, not the Owners Corporations Act.
This is not the same as a modern strata titled apartment. A strata scheme creates an owners corporation that manages common property and is governed by the Owners Corporations Act 2006. Company title is different again, where you do not get your own land title at all, you hold shares in a company that grant you the right to occupy a particular flat. Stratum title sits between the two.
How stratum title sits in Victorian law
Victoria's Transfer of Land Act uses the term 'stratum estate' for the kind of freehold you see in these older subdivisions. The Act defines a stratum estate as a fee simple estate in a defined part of a building or between levels, which lets multi storey buildings be split into separately owned 'slices'. There are also specific rules tying the land titles to the service company that holds the residual or common land.
One practical rule worth knowing is that Land Use Victoria will not register a dealing with a stratum estate unless the related service company is properly on title for the residual land. It is a legal way of keeping the lot titles and the common property company locked together.
Stratum vs strata vs company title at a glance
Here is the plain English comparison most Melbourne buyers ask for.
Ownership structure
Stratum title: You hold the title to your lot, plus shares in the service company that owns and manages the common property. Decisions are made under that company's constitution and service agreements.
Strata title: You hold the title to your lot and share ownership of common property with other lot owners. An owners corporation is automatically created on registration of the plan of subdivision, and it must follow the Owners Corporations Act.
Company title: You buy shares in a company that owns the land and buildings. Your shares give you the right to occupy a particular flat, rather than owning the land on your own title.
Regulation and dispute pathways
Stratum: Governed by the Corporations Act and the service company's constitution. There is no owners corporation. VCAT can still hear certain neighbourhood disputes under specific legislation.
Strata: Governed by the Owners Corporations Act and Regulations. Consumer Affairs Victoria guidance applies.
Company title: Governed by the Corporations Act and the company's constitution. No owners corporation.
Paperwork you see
Stratum: A certificate of title for your lot, a share certificate or ASIC extract for the service company, the company constitution, and service agreements.
Strata: A certificate of title for your lot, plus an owners corporation certificate and rules with lot entitlements and liabilities on the plan.
Company title: Share certificate or equivalent company documentation and the company constitution, rather than an individual lot title.
Everyday impact
Approvals: Stratum and company title buildings often have stricter approval requirements written into the constitution, covering renovations, pets, leasing and who can buy in. Strata schemes rely on the owners corporation rules and formal meeting processes.
Insurance and maintenance: In stratum and company title, the service company arranges building insurance and common area works under its own rules. In strata, the owners corporation must insure and maintain common property under the Act.
Why does stratum title still exist in Melbourne?
A lot of Melbourne's classic 1950s and 1960s brick walk ups were created before today's strata norms took hold, so the developer's surveyor and lawyer used stratum subdivisions with a service company to look after the shared bits. You still see them sprinkled through the inner suburbs close to tram lines, beaches and university zones where those mid century blocks are common. It is perfectly lawful, just a different model born of the era.
What you actually own, in practice
Think of it like a layered cake. Your lot title covers the inside of your unit according to the plan. Your shares in the service company give you collective control of the land around and between the lots, such as the car park or foyer. The company usually grants an exclusive lease or licence for your car space or courtyard. This two part ownership is why your conveyancer will ask for both the land title documents and the company paperwork.
The buyer's view: pros, cautions and common questions
Are stratum apartments cheaper?
They can be priced a little lower because buyers assume extra hoops and some lenders are pickier. A well run building can still perform nicely. As for lending, many banks apply tighter criteria for stratum or company title than they do for modern strata, with lower maximum loan to value ratios being common. Loan policy shifts over time and by lender, so get a broker to check the latest settings before you fall in love with a place.
Will my bank hate it?
'Hate' is a strong word, but yes, assessment can be tougher. Some lenders ask for bigger deposits on company or stratum title than on standard strata, and they look closely at the building's constitution and financials.
Who fixes the roof or the stairs?
In stratum, the service company is responsible for insuring the building and arranging common property repairs under its constitution and service agreements. There is no owners corporation to fall back on, so you judge the building by the quality of its company governance and its budget, not by the Owners Corporations Act.
What about disputes with neighbours?
You are not shut out of help. While stratum and company title are outside the Owners Corporations Act, VCAT can still hear certain neighbourhood disputes, for example noise or repair access, under separate legislation.
Can the service company tell me who I can sell to or whether I can let the unit?
Often, yes. Many constitutions require board consent for transfers and may control leasing, pets and renovations. Your conveyancer should read those rules like a hawk and explain how they work.
Due diligence checklist for a Melbourne purchase
Here is the shopping list I ask clients to pull together well before auction day.
Plan and title search: Confirm the lot boundaries on the registered plan and check for easements or covenants. In Victoria, modern subdivisions are registered with Land Use Victoria and the plan will show lots and, where applicable, common property.
Company constitution and service agreements: Read the rules on approvals, leasing, pets, renovations, contributions and meeting procedures. These documents govern your day to day life more than any owners corporation rules would.
ASIC extract and minutes: Confirm the service company is in good standing, see who the directors are, and ask for recent meeting minutes and budgets. CAV directs enquiries about service companies to ASIC, which is a hint to check there.
Financial health: Request the last two years of budgets and actuals, bank statements if available, and details of insurance. You want to see a sensible sinking fund for the roof, plumbing and driveways, not just a bare bones account.
Approvals history: If the unit has a new kitchen, split system or decking, ask for company approvals. It is about risk. If a past owner skipped consent, you want that sorted before settlement.
Lending pre check: Before you bid, get your broker to confirm the building's title type is acceptable to your lender. Bring the constitution and plan to that chat so credit can review accurately.
Section 32 review: Even without an owners corporation, the Victorian vendor statement should still carry the right land title disclosures. Ask a conveyancer to comb through it, then cross check with the service company documents.
On the ground feel: Walk the block. Is the garden cared for, are the bins sorted, do the letterboxes tell a story about short term letting or long term pride. Buildings develop a personality, and with stratum you are buying into that culture.
Selling a stratum titled unit
If you are the vendor, you reduce friction by assembling your pack early. A clean title search, the plan, an ASIC current and historical extract, the constitution and service agreements, recent minutes, insurance certificates and a summary of contributions help buyers move quickly. If the company requires transfers to be approved, set out the procedure in plain language so your buyer and their bank do not panic at the last minute.
Repairs, upgrades and renovations
In a stratum block, the service company plays the role an owners corporation would normally fill. That means:
Building insurance is arranged by the company, and the cost is shared between shareholders under the constitution.
Common property works, such as painting stairwells or fixing driveways, are authorised under company rules and funded by levies.
Lot renovations may need board consent if they affect structure, common services or external appearance.
This is all set by the company documents, not by the Owners Corporations Act, so there is more variation from building to building.
Converting from stratum to strata title
Many buildings consider a conversion to a modern strata plan with an owners corporation. Why bother? Two reasons tend to come up: bank lending can be simpler, and buyers understand strata better, which can support values. Industry specialists often note that conversion can lift marketability and sale price, though the costs and effort are not trivial.
The legal pathway sits in Victorian land law. In broad terms, a stratum building can move to a plan of subdivision that creates lots and common property, with an owners corporation to manage it. The service company must resolve to proceed, surveyors draw the new plan, the common property is re papered, and any leases for car spaces or storage are adjusted to match the new plan. It is technical, and every building has wrinkles, but that is the gist.
Before anyone rushes in, weigh the trade offs. Some companies like the extra control they hold today, such as consent rights over sales or leasing, and prefer to keep the current model. Others see the benefit in aligning with the mainstream strata system. Your conveyancer can brief the board on the legal steps and costs, then coordinate with a surveyor and a specialist owners corporation manager.
Everyday examples from Melbourne life
The St Kilda walk up with a big front garden: Lovely, green and quiet. The service company might insist on garden rules and restrict major works facing the street, which keeps the look consistent and values steady. Get the minutes, not just the marketing blurb.
The Camberwell block with car space licences: Your title covers the unit, your licence or lease from the service company covers the car bay. Lenders often ask to see the paperwork to be sure your parking is exclusive.
The Carlton flat above shops: In older mixed use buildings, stratum boundaries might run at different levels so traders, residents and the laneway all fit neatly. The plan will show the levels clearly, yet your rights over the stairwell or bin store will still flow from the service company's documents.
Frequently asked questions
Is a stratum title 'worse' than strata?
Not necessarily. It is different. The risk profile sits in the service company's rules and finances, not the land title itself. A clean, well run company with up to date insurance and sensible levies can be a great home.
Do I receive an owners corporation certificate with the Section 32?
No. Stratum title does not create an owners corporation, so there is no OC certificate. Ask for company documents instead and get ASIC extracts to confirm the company's standing.
Can VCAT still help if things go pear shaped?
Yes, for defined neighbourhood disputes such as noise, conduct or repairs. VCAT's powers are not the same as for owners corporations, yet you do have a venue to seek orders.
Who sets my levies?
The service company does, under its constitution and service agreements. Read how contributions are calculated and whether there is a sinking fund.
Will my renovations need approval?
Very likely if they touch structure, common services or the external look. The company constitution usually spells out what needs consent and how to apply.
A simple action plan for buyers and sellers
If you are buying
Ask your conveyancer to review the company constitution, service agreements and minutes alongside the Section 32 and plan.
Get your broker to run the title type past your preferred lender before you bid.
Ask about upcoming works, such as roof or plumbing, so you understand future levies.
Confirm rules on pets, leasing and renovations, in writing, before you sign.
If you are selling
Prepare a neat pack with title, plan, ASIC extracts, constitution, service agreements, minutes, insurance and a quick 'how approvals work here' summary.
If the company must consent to share transfers, lodge the paperwork early so your buyer's bank sees the green light fast.
Final thoughts
Stratum title has a Melbourne flavour to it. It grew up with our brick walk ups, leafy courtyards and tram lined streets, and it still offers solid homes in brilliant locations. It just asks you to read a different rulebook. Once you understand the service company model and make sure the paperwork stacks up, you can buy with confidence.
If you would like a friendly pair of local eyes on your documents, we are happy to help.
Contact Pearson Chambers Conveyancing for details and a complimentary Section 32 contract review.