EAS-02 Easements & restrictive covenants affecting common property - the role of strata companies and community corporations
Version 2 15/02/2023
Guide rewritten and restructured 15/02/2023
Easements and restrictive covenants can be created over land in a strata titles scheme or a community titles scheme in the same ways that apply for freehold land. Some issues that have caused problems previously for strata titles schemes are discussed in the following paragraphs.
2 Strata Companies or Community Corporations Do Not Own the Parcel in Strata Titles Schemes or Community Titles Schemes
The strata company or community corporation does not own any lots or common property in the relevant strata titles scheme or community titles scheme.
In the case of a strata titles scheme, ownership of the parcel is held, as to the lots, by the owners for the time being of the lots in the scheme (Strata Titles Act 1985 (STA) s.13) and as to the common property in the scheme, by the owners of the lots in proportion to the unit entitlements of their lots.
In the case of a community titles scheme, which may be a tier 1, tier 2 or tier 3 scheme in the community scheme, ownership of the parcel of land in the relevant scheme is held, as to the lots, by the owners of lots in the scheme and as to common property in the community scheme, in the manner set out in Community Titles Act 2018 (CTA) section 16.
Owners cannot deal separately with the common property. The strata company or relevant community corporation is given powers to deal with common property and the parcel (STA s.93 and CTA s.79).
A strata company may enter into a transaction to which STA s.93 applies if the transaction is authorised by a resolution without dissent (see guides EAS-01 or COV-01 as relevant), or the transaction is required for completion of a stage of subdivision to which staged subdivision by-laws apply and the subdivision has been undertaken with sufficient compliance with the by-laws as determined in accordance with the regulations.
A community corporation may enter into a transaction to which CTA s.79 applies if authorised by special resolution (see guides EAS-01 or COV-01 as relevant).
3 Creation of Easements and Restrictive Covenants on Plans of Subdivision
In accordance with common law principles, easements and restrictive covenants can only be created when the land burdened and benefited is in separate ownership. Registration of a transfer of at least one strata titles lot or community titles lot to another person is one way of breaking the unity of ownership.
Easements or restrictive covenants created on scheme plans of subdivision under TLA Part IVA, or scheme plans and amendment of scheme plans under STA s.33 or CTA s.38 are statutory exceptions to the principle that the land burdened and benefited must be in separate ownership (see TLA s.136H, STA s.33(7) and CTA s.38(7)).
4 Execution of Easements and Restrictive Covenants by Strata Companies or Community Corporations
A strata company or community corporation can only execute an easement or restrictive covenant over the common property or scheme parcel after the strata company or community corporation has been established under the STA or CTA as relevant on registration of the scheme documents, and then only pursuant to a resolution without dissent (subject to STA section 36) or special resolution as relevant (see guides EAS-01 or COV-01 as relevant).
Appropriate notice periods for making resolutions, holding meetings as relevant and any voting periods for resolutions will need to be observed in connection with easement and restrictive covenant transactions involving the strata company or community corporation before the transaction may be registered at Landgate.
5 Execution of Easements and Restrictive Covenants by Proprietors of Proposed Strata Title Lots or Community TItle Lots - with Proprietors of Land Outside the Scheme
Grants or acceptance of grants of easements and restrictive covenants between the registered proprietor of land the subject of a proposed strata titles scheme or community scheme and registered proprietor of another property can be made by reference to a scheme plan that has been lodged at Landgate and has a status of “In Order For Dealings”. Alternatively, an “Interest Only Deposited Plan” must be lodged to spatially define the area the subject of the easement or restrictive covenant. It will be registered on the title of the parent land prior to registration of the scheme .
6 Easements in Respect of Encroachments
See the relevant guide STR-02 Lodgement and Registration of New Strata Titles Schemes or CTS-07 Registration of community titles schemes for further details.