Community Strata Titling:

Community title is becoming a popular device through which title to land is conferred and managed. According to the New South Wales Land and Property Information (NSW LPI), the community title scheme can be either of the following:

• A “Sole Neighbourhood Scheme”, or alternatively;
• A “Community Scheme” such as any of the following three subcategories:
  • Neighbourhood scheme;
  • Precinct scheme; and
  • Strata scheme [1].

According to Strata Title Australia:

“Community title is structured as property which has been divided into individual lots. This may include strata schemes and/or Torrens Title lots, with common areas and shared services. In some States, additional sub-classes of communities may also be included, for example in NSW, neighbourhood associations and precinct associations can also exist within a community association. Developers are increasingly opting to use community title as a means of establishing market differentiation and consumer appeal. Part of this means creating designer lifestyles that include tennis courts, swimming pools, country clubs and parks.” [2]

The community plan will be attractive to a property developer who is contemplating the development of land which includes a “multi-tiered management structure” where the land is compartmentalised into lots of Association property for further individual development. The precinct plan is also attractive to the developer who is engaged in a complex development project, but here the project will have staged development or distinct construction phases; here the land is subdivided as with a community plan and the precinct lots are intended for future development. The neighbourhood plan however appears to be the most popular device used by property developers because they can be used for tiered, staged or stand alone developments. [3]

According to NSW LPI, a development contract is “optional” for a Community or a Precinct Scheme, however it must be lodged for a Neighbourhood Plan. Variation of these contact can be affected but consent will need to be obtained from the others who are affected by the development itself. [4] A community or strata title solicitor can be retained to investigate the particulars of a particular development project and provide legal advice in respect of the requirement for the drafting and production of a development contract to the authorities in certain circumstances. The community or strata title lawyer may also assist in liaising with relevant parties for the process of obtaining consent in respect of any variation that will need to be made to the existing development contract.

A management statement on the other hand is mandatory for all three community schemes: neighbourhood, precinct and strata schemes. The management statement will outline the rules of the scheme, as well as the by-laws connected to the property. Drafting the rules and the by-laws of the proposed scheme should be done by a solicitor or lawyer who has had experience in dealing with strata or community disputes and litigation. This is because he/she will be in a position to ascertain where problems may arise and therefore ensure that the rules and by-laws are prepared to cover these eventualities.

Developers who are contemplating large scale property development for either residential, commercial or industrial complexes should obtain appropriate legal advice in relation to the manner in which the property will be titled before the project is connected or executed. Different types of titling will appeal to different property developers for different reasons. The purpose of the developed property as well as the process in which the project is to be realised may be just two of the most obvious issues which influence how a property developer approaches this aspect of the project. Advice will, depending on the circumstances of each development project, encompass the following:

1. The type of community title appropriate for the project;
2. The rights and liabilities of relevant parties in respect of each title option;
3. The benefits and risks associated with each title option;
4. The possibility and types of disputes that may arise in respect of titling options;
5. Statutory and other relevant legal liabilities and requirements.

[1] “Community title schemes” New South Wales Land and Property Information website (undated) <rgdirections.lpi.nsw.gov.au> (accessed, 20 December 2013).

[2] “Community Title” Strata Title Australia website (undated) <www.stratacommunity.org.au> (accessed, 20 December 2013).

[3] “Community Schemes & Neighbourhood Schemes” Strataman website (undated) <www.strataman.com.au> (accessed, 20 December 2013). Readers who find the information in this paragraph useful are directed to the “disclaimer”, “external sources” and “important notice” notations at the footer of the page referenced here.

[4] New South Wales Land and Property Information website, op cit.

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