As the prospective lot owner, you’ll need to become familiar with community titles before making a property purchase.
When an area of land is divided into at least two lots and has common areas, it’s known as a community title. A community title includes common ground and is often used to maintain a decent level of local amenities or services for the local residents. The term usually refers to large estates with multiple lots that may also include retail or commercial outlets.
Key Documents Required for Community Titles
Prospective buyers and owners should be aware that there are four documents required:
- The Plan – The plan specifies if it is a community strata scheme or community scheme; there are significant differences between the two.
- The By-Laws – The by-laws contain rules to administer the community property and also regulate the appearance and use of the community lots. They may also specify the purpose for which a lot can be used.
- Scheme Description – The scheme description is optional for residential lots of six schemes or less but is mandatory for lots used for commercial purposes.
- Development Contract – A developer may offer a contract to develop the community lots or common property in accordance with the by-laws and scheme description. The lot owner has the right to take legal action If the developer does not comply with the contract.
These documents should be lodged with the NSW Land Registry Services (Land Titles) office. The documents may be attached to the sale contract, or they can be purchased from the LTO for a nominal fee.
More Information about Community Titles
Community titles can include features like recreational facilities, landscaped parks and walkways. The lot owners form what is known as a ‘Community Association’, and the community title scheme is created by registering the neighbourhood, community or precinct plan. All the common areas including walkways, roads and promenades are Association property or common property. Estimation of site values determines individual contributions towards maintenance and insurance.
It can be challenging to manage community title schemes which generally consist of large complexes, big developments and conflicting interests. They frequently include a mix of residential, commercial and retail lots. Every community scheme varies in nature, and therefore, the by-laws tend to be less standardised compared to the by-laws of community strata schemes.
What Are the Rewards and Risks of a Community Title?
As a lot owner, you can benefit from community titles in various ways:
- You can enjoy the use of shared areas, including swimming pools, gardens and recreational areas.
- You have a say in the management and development of the community.
- The landscaping and area development add value to your property
- The common areas are covered by insurance (the costs of which are shared by lot owners)
Potential pitfalls could include high insurance and maintenance fees, restrictive usage rules or disputes with another lot owner in the community. Alternatively, you could be a landowner looking to develop property on the land and may face opposition from other lot owners.
Contact Competent Lawyers for Assistance
As with any property purchase, an experienced property lawyer can help you understand your position and help with dispute resolution. As seasoned legal experts, Owen Hodge Lawyers provide reliable and updated advice regarding residential, commercial or agricultural property. Please call us on 1800 770 780 for assistance with your questions and concerns.