COMMUNITY TITLES: A CASE STUDY

Transcription

1 COMMUNITY TITLES: A CASE STUDY Urban Development Institute of Australia Western Australia Friday 25 May 2018 Crown Perth CAROLYN CHUDLEIGH PARTNER, HFW carolyn.chudleigh@hfw.com

2 COMMUNITY TITLES IN NSW The community titles legislation (in NSW) was designed to fill the vacuum between conventional methods of subdivision and strata subdivision to enable shared property to be created within conventional subdivisions. It is the responsibility of the NSW Land Registry Services to ensure that all new community schemes comply with (at least) 26 pieces of legislation. The Community Land Development Act 1989 and the Community Land Management Act 1989 commenced on 1 August 1990 and established a legally certain and relatively simple means of communal ownership of facilities.

3 LAND TITLING, SUBDIVISION AND GOVERNANCE Strata legislation: 1961, 1973, 1996, 2015 Community Schemes legislation: 1990 Part building Strata schemes: 1992 Management of stratum subdivisions of buildings: 2001 COMMUNITY SCHEMES LAW REFORM OVERDUE NSW FOCUS ON STRATA REFORM IN PRIORITY

4 Tier 1 3 TIER SYSTEM NSW TIER 1 - COMMUNITY Community Scheme DP xxxxxx Freehold Torrens Title Community Association Community Property / Parcel Community Management Statement Lot 1 Community Property Owned by the Community Association Community Development Lot 2 Community Development Lot 3 Etc

5 Tier 2 Community Development Lot 2 3 TIER SYSTEM NSW TIER 2 - PRECINCT Subdivided by a Precinct Plan Precinct Scheme DP xxxxxx Freehold Torrens Title Precinct Association Precinct Property / Parcel Precinct Management Statement Lot 1 Precinct Property Owned by the Precinct Association Precinct Development Lot 2 Precinct Development Lot 3 Etc

6 OR

7 Tier 2 Community Development Lot 2 3 TIER SYSTEM NSW TIER 2 - NEIGHBOURHOOD Subdivided by a Neighbourhood Plan Neighbourhood Scheme DP xxxxxx Freehold Torrens Title Neighbourhood Association Neighbourhood Property / Parcel Neighbourhood Management Statement Lot 1 Neighbourhood Property Owned by the Neighbourhood Association Neighbourhood Lot 2 Neighbourhood Lot 3 Etc

8 OR

9 Tier 2 Community Development Lot 2 3 TIER SYSTEM NSW TIER 2 - STRATA Subdivided by a Strata Plan Strata Scheme SP xxxxxx Freehold Torrens Title Owners Corporation Common Property / Strata Parcel Strata By-laws Common Property / CP Owned by the Owners Corporation Strata Lot 1 Strata Lot 2 Etc

10 THEN YOU COULD HAVE

11 Tier 2 Tier 1 2 TIER SCHEME Community Parcel Precinct Parcel Strata Parcel Neighbourhood Parcel However, you cannot further subdivide strata or neighbourhood into another tier of management

12 SO

13 Tier 3 Tier 2 SUBDIVIDE TIER 2 TO CREATE 3RD TIER Precinct Parcel Strata Parcel Neighbourhood Parcel Cannot further subdivide strata or neighbourhood into another tier of management

14 AND THEN YOU COULD HAVE

15 Tier 3 Tier 2 Tier 1 3 TIER SCHEME Community Parcel Precinct Parcel Strata Parcel Neighbourhood Parcel Strata Parcel Neighbourhood Parcel Cannot further subdivide strata or neighbourhood into another tier of management

16 Tier 2 Tier 1 2 TIER SCHEME Community Parcel Strata Parcel

17 Tier 2 Tier 1 2 TIER SCHEME Community Parcel Neighbourhood Parcel

18 Tier 3 Tier 2 Tier 1 3 TIER SCHEME Community Parcel Precinct Parcel This is the most common 3 tier scheme Strata Parcel

19 Tier 3 Tier 2 Tier 1 3 TIER SCHEME Community Parcel Precinct Parcel Neighbourhood Parcel

20 Tier 1 SPECIAL: STAND ALONE NEIGHBOURHOOD SCHEME Neighbourhood Parcel

21 Tier 3 Tier 2 Tier 1 THE NEW ROUSE HILL - SO FAR Community Parcel (with Community Development Lots still to develop / subdivide etc) Precinct Parcel Precinct Parcel Precinct Parcel Strata Parcel

22 PLAN LODGMENTS Plan lodgments July 2017 March 2018 NSW LRS Jul Aug Sep Oct Nov Dec Jan Feb Mar Total Deposited plans Community plans (incl. Precinct and Neighbourhood) Total Strata plans ,379

23 SOME ISSUES SOME ISSUES RE COMMUNITY SCHEMES LEGISLATION IN NSW: CONTIGUOUS LAND PARCEL TENSION WITH LOCAL COUNCILS REGARDING WHO IS TO OWN THE ROADS, PARKS, OTHER COMMUNITY FACILITIES PLANNING ISSUES + LAND TITLING ISSUES + GOOD GOVERNANCE LANDSCAPING STANDARDS - CONSISTENCY APPOINTMENT OF DIFFERENT MANAGEMENT COMPANIES FOR EACH SCHEME AT EACH TIER POTENTIAL LOSS OF EFFICIENCY / ECONOMIES OF SCALE WHAT TO INSURE GETTING UNIT ENTITLEMENT ALLOCATIONS CORRECT AND COMPLEXITY TO CHANGE HOW DO YOU MAKE THE DEVELOPER COMPLETE THE PROJECT? WHAT IF THE DEVELOPER SELLS OFF A COMMUNITY DEVELOPMENT LOT TO ANOTHER DEVELOPER WHO LAND-BANKS IT?

24 SOME POINTS OF DIFFERENCE SOME POINTS OF DIFFERENCE RE COMMUNITY SCHEMES LEGISLATION: CAN COMBINE COMMUNITY SCHEMES WITH STRATA SCHEMES IN NSW NAMING DIFFERENCES: COMMUNITY, PRECINCT, NEIGHBOURHOOD, STRATA DOES NOT APPLY TO BUILDINGS IN NSW ASSOCIATION (COMMON) PROPERTY IS OPTIONAL IN WA ACQUISITION OF ADDITIONAL ASSOCIATION (COMMON) PROPERTY IS POSSIBLE IN WA USE OF COMMUNITY DEVELOPMENT STATEMENT IN WA WILL THAT BE TOO CONSTRAINING? EXAMPLE: USE OF STRATA DEVELOPMENT CONTRACTS IN NSW STRATA LEGISLATION - DEVELOPERS WOULD RATHER AVOID VS PUBLIC BENEFIT ARGUMENT GIVING PURCHASERS OF LOTS WITHIN THE SCHEME CERTAINTY CDS: NOT COMPULSORY IN NSW

25 EXAMPLE HOPETOUN QUAYS, BIRCHGROVE, SYDNEY 3 COMMUNITY DEVELOPMENT LOTS EACH SUBDIVIDED BY A STRATA SCHEME, COMMUNITY FACILITIES (SWIMMING POOL), JETTY AND WHARF VALUE / BENEFITS: SEPARATELY REGISTER EACH STRATA SCHEME, STAGED DEVELOPMENT, BOUNDARY ADJUSTMENTS UNIQUE OUTCOME: COMMUNITY ASSOCIATION CAN LEASE THE ADJACENT LAND (IE, WHARF/JETTY) FROM NSW WATERWAYS RISKS: DEVELOPER FAILS TO BUILD THE COMMUNITY FACILITIES UNINTENDED CONSEQUENCES: COMMUNITY ASSOCIATION CANNOT GRANT A LEASE OVER LOT 1 COMMUNITY PROPERTY THAT IS ITSELF HELD BY A LEASE (IE, CANNOT SUBLEASE) SO EACH WHARF USAGE HAD TO BE DONE BY LICENCE SO EACH TIME IT IS SOLD THERE NEEDS TO BE CONTRACTS RE ASSIGNMENT OF LICENCE 25

26 EXAMPLE BREAKFAST POINT, SYDNEY MAJOR COMMUNITY SCHEME WITH USE OF STRATA SCHEMES AND NEIGHBOURHOOD SCHEMES, COMMUNITY FACILITIES (CLUB HOUSE), LARGE SPORTS OVAL, WATERFRONT VALUE / BENEFITS: STAGING OVER NEARLY 20 YEARS, USE OF RESTRICTED PROPERTY BY-LAWS (IE, EXCLUSIVE USE) TO CREATE MINI-PRECINCTS WITHOUT HAVING TO USE PRECINCT SCHEMES, PRIVATE ROADS CONTROLLED BY COMMUNITY UNIQUE OUTCOME: STRICT ARCHITECTURAL AND LANDSCAPE (A&L) STANDARDS BUILT INTO CMS, UNDERSTANDING OF ROAD RULES FOR PRIVATE ROADS RISKS: LONG TIME TO DEVELOP, RESIDENTS RESIST A&L STANDARDS, EXPENSIVE LEVIES, NEARLY 6,000 RESIDENTS UNINTENDED CONSEQUENCES: DIFFERENT MANAGERS, EXECUTIVE COMMITTEE RUNS IT LIKE A FOURTH LEVEL OF GOVERNMENT(!), GATED-COMMUNITY BY DESIGN, COMPLEX TITLE DUE TO PRIOR CONTAMINATION ON SITE 26

27 BREAKFAST POINT

28 EXAMPLE THE NEW ROUSE HILL LARGE MIXED USE COMMUNITY SCHEME WITH MAJOR TOWN CENTRE, TRAIN STATION / BUS INTERCHANGE, 3 TIERS OF MANAGEMENT, HERITAGE SITE VALUE / BENEFITS: USE OF PRECINCTS, STAGING, TOWN CENTRE CONTROL, FLEXIBILITY ON DELIVERY UNIQUE OUTCOME: TOWN CENTRE S OWN MANAGEMENT STATEMENT AND CONTROL WITH MAJOR OWNER, PUBLICLY ACCESSIBLE AREAS MANAGEMENT PLAN, MINIMAL LOT 1 COMMUNITY PROPERTY, ENVIRONMENTAL EFFICIENCY, PRODUCT MIX RISKS: TRANSPORT CORRIDOR UNKNOWN, CREEK RUNNING THROUGH MIDDLE OF COMMUNITY PARCEL, LEVIES UNKNOWN UNINTENDED CONSEQUENCES: CAREFUL CONSIDERATION OF VOTING RIGHTS, WHAT NEEDED UNANIMOUS RESOLUTIONS, SOME RIGIDITY IN LEGISLATION AS TO WHAT TO INCLUDE IN THE OFF-THE-PLAN SALES CONTRACT 28

29 NSW COMMUNITY SCHEMES LEGISLATION DOES NOT APPLY TO BUILDINGS THAT REMAINS UNDER EITHER THE CONVEYANCING ACT OR STRATA LEGISLATION (IF PART OF THE BUILDING IS STRATA SUBDIVIDED) EXAMPLE: Single building 5 distinct uses, 5 separate titles limited in height and depth, 3 of which were strata subdivided Governed by a registered management statement dealing with shared facilities and shared costs Continued heavy use of easements despite the management statement PART STRATA BUILDINGS MANAGEMENT STATEMENT FOR SHARED FACILITIES 29

30 HOW MANY? HOW TO MANAGE? 2014 NSW: THERE WERE OVER 700 COMMUNITY SCHEMES, APPROXIMATELY 30 PRECINCT SCHEMES AND OVER 1,400 NEIGHBOURHOOD SCHEMES. HOWEVER THERE WERE APPROXIMATELY 75,000 STRATA SCHEMES ONCE THE COMMUNITY SCHEME IS CREATED, YOU THEN HAVE TO MANAGE IT AND POSSIBLY MODIFY IT AS IT GROWS / MATURES. WHAT IS THE ESSENCE AND THEME OF THE COMMUNITY? COMMUNITY TITLE IS AN IMPORTANT SUBDIVISION AND GOVERNANCE REGIME NECESSARY FOR GROWING POPULATIONS CHALLENGE IS TO PROVIDE CERTAINTY FOR CONSUMER PROTECTION / PUBLIC BENEFIT BUT ALLOW ENOUGH FLEXIBILITY FOR ALL STAKEHOLDERS IN THE DELIVERY AND FUTURE MANAGEMENT

31 THANK YOU TO UDIA, WA AND TO INDUSTRY PARTNERS: LD TOTAL; STRATEGEN ENVIRONMENTAL; STRATA COMMUNITY ASSOCIATION 2018 Holman Fenwick Willan LLP. All rights reserved Whilst every care has been taken to ensure the accuracy of this information at the time of publication, the information is intended as guidance only. It should not be considered as legal advice. Beirut Brussels Dubai Geneva Hong Kong Houston Jakarta Kuwait London Melbourne Paris Perth Piraeus Riyadh São Paulo Shanghai Singapore Sydney