STP-13 Merger of Common Property and Lots in Certain Strata Schemes
Version 1 – 04/01/2019
1 Merger of Common Property and Lots (formerly section 15.1 of the practice manual)
This chapter explains in detail how to merge buildings and common property into lots on certain Strata Plans. This process allows changes to lot boundaries to conform to owners’ perception of their property ownership of many single tier strata schemes registered before 1 January 1998. For schemes registered after this date only the normal process of re-subdivision can effect such changes to lot boundaries. These options were introduced by the Strata Titles Amendment Act 1996, which came into force on 20 January 1997.
2 General (Division 2A of Part ll of the STA) (formerly section 15.2 of the practice manual)
Under section 21M of the STA automatic mergers of buildings or parts of buildings that were previously common property for 2 to 5 lot single tier strata schemes occurred on the 20th July 1997 unless an objection was lodged before that date under section 21O of the STA.
Strata Plans affected by these automatic changes have had the floor plan stamped to indicate that the new boundaries of lots which were previously the inner surfaces of the building walls, floors and ceilings are now the external surfaces of those buildings.
However, in some cases where a lot owner has lodged an objection to the automatic changes, the former boundaries remain. For single tier strata schemes of more than 5 lots, the common property buildings can be included as part of the lots (merger) by an appropriate resolution under section 21F of the STA, followed by the registration of a Notice of Resolution document.
Mergers can be used in a variety of ways that allow a strata company registered before 1st January 1998 to change the Strata Plan to reflect the current perceived ownership of buildings and land that is common property. This permits buildings or parts of buildings that are common property to be included as part of a lot.
It also enables the plan to be upgraded to reflect new buildings or building additions not previously shown on the Strata Plan. Finally, it can be used to include in a lot land that is common property (see Plan Example 27).
These changes can be achieved without local government or WAPC approval. In most cases to enable this to happen, a surveyor must certify as to certain matters such as compliance with any relevant Town Planning Scheme and that a building licence has been issued for building additions. A licensed valuer is also required to certify to the appropriate unit entitlement of the scheme for the change to be made.
Easements for Vehicle Access, Parking and Turning can be created when mergers are effected (see Plan Example 28). However, it is not possible to create other types of easements. The implied easements for support, services and shelter created under sections 11 and 12 of the STA remain in place and section 12A of the STA provides further rights for owners whose boundaries are changed under section 3AB of the STA.
There is no time limit as to the use of the merger option. It may be utilised at any time in the future but may only be used once in the lifetime of the scheme. This option is only available for strata schemes registered before 1 January 1998.
It must be noted that once a merger has been effected, the Strata Company may still exercise the right to “convert the Strata Plan to a Survey-Strata Plan” (see STP-14 Conversion of Strata Schemes to Survey-Strata Schemes and Plan Example 31).
3 Drafting Guidelines (formerly section 15.3 of the practice manual)
Most drafting guidelines for mergers are common to all plans under the STA. These have been recorded in STP-09 Scheme Plans. Other drafting matters specific to Strata Plans are recorded in STP-09 Scheme Plans. For drafting requirements for mergers, this chapter should be read in conjunction with STP-09 Scheme Plans.
The guidelines in this chapter should be used generally and are not to be taken as fixed standards. As each scheme is unique, each plan is also unique. Guidelines are intended to allow flexibility to allow boundaries to be clearly depicted.
4 Drafting Standards (formerly section 15.4 of the practice manual)
Plans should be prepared to the standards required on a re-subdivision. All merger plans (referred to as “sketch plans” – see section 21T of the STA) must contain a location plan depicting the position of the buildings and part lots external to the buildings, and a floor plan (see Plan Example 27).
If in a two (2) to five (5) lot scheme, it is intended to show a building that has been constructed on a “vacant lot”, there must be a merger “sketch plan” showing all buildings and all part lots comprising the parcel.
In larger schemes it is permissible to show only the affected portions of the scheme on a location and floor plan where it is not practical to show the complete scheme. Surveyors should however ensure that all necessary amendments to the Strata Scheme are carried out on the Merger Plan as that option is available only once and further amendments can only be achieved by a Strata Plan of Re-subdivision (see STP-09 Scheme Plans and STP-12 Schemes and Amendment of Schemes).
The compulsory disclosure requirements on the sale of strata properties (see STP-12 Schemes and Amendment of Schemes) make it essential that lot boundaries are clearly identified. The Act now requires lot boundaries to be identified on a copy of the Strata Plan at the time of sale. All information in relation to lot boundaries should be clearly identified. Cross sections and enlargements may be used to illustrate complex boundaries.
Prior to registration of a plan, purchasers must be notified of any changes to the plan, or proposed plan, as a sale may be avoided if this information is not provided.
To achieve a merger (incorporating common property land into a lot, including a building extension, or a building not shown on the Strata Plan), the lot owners must have a meeting recording their agreement to the boundary changes.
If this agreement is reached a surveyor and valuer must be employed to prepare the plan and assess the new unit entitlements. On completion of these tasks, another meeting of lot owners must be held to pass a resolution without dissent (or unanimous resolution in a two lot scheme) agreeing to the new plan and the unit entitlements and to execute the STGR Forms 32 or 33 and 39.
Surveyors are advised that lodgement fees apply for the lodgement of the "sketch plan" i.e. general plan lodgement fee plus a fee for each lot shown on the plan.
The application fee for the registration of the merger applies however there is no additional fee for each lot.
5 Annotation (formerly section 15.5 of the practice manual)
Wording in certain instances may also denote boundaries. This wording may only be described by reference to a monument that can be identified on the plan.
6 Surveyor’s Certificate (formerly section 15.6 of the practice manual)
STGR Form 35 is the form used for surveyors to certify that the lots fit certain criteria. In real terms, the surveyor is taking on certain responsibilities normally undertaken by local government and WAPC.
In addition to the STGR Form 35 Surveyors must as from the 24th of January 2006 (provided the surveyor has signed his certificate on or after that date) include a certificate signed under regulation 54 of the Licensed Surveyors (General Surveying Practice) Regulations 1961 to ensure the correctness of the Strata Plan (see STP-02 Lots section 1).
The e-Strata kit contains current forms depicting regulation 54.
The Surveyors responsibility when signing Form 35 can be broken into two categories:
- Town Planning
6.1 Buildings (formerly section 15.6.1 of the practice manual)
If any building variation or the addition of a new building to the existing plan is depicted on a merger “sketch plan”, the surveyor must certify that the addition has been the subject of a building permit under the Building Act or a building licence under section 374 of the Local Government (Miscellaneous Provisions) Act 1960 (see STGR Form 35 paragraph (a) (i)).
The surveyor must also check that the strata company or all of the proprietors of the lots have approved extensions; alterations or new buildings on the “sketch plan” (see STGR Form 35 paragraph (a) (ii)). The position of the buildings and offsets on the original location and floor plan sheets is the responsibility of the previous surveyor.
Depending on the circumstances, additional survey work may be necessary to establish the parcel boundary in relation to the buildings. The result may be that easements for support may be necessary (see STGR Form 35 paragraphs (b) (i) and (ii)).
6.2 Town Planning (formerly section 15.6.2 of the practice manual)
A surveyor has specific responsibilities to ensure the newly created lots comply with certain requirements of any relevant Town Planning Scheme (STGR regulation 14O). Briefly those requirements are:
- number of car parking bays per lot
- rights to light and air
- rights of support
- private open space for each dwelling
- pedestrian access to streets and common property
- rights for access to storage areas, meters, etc.
- rights for services access.
When making the certification, the surveyor must take into account:
- provisions of the relevant Town Planning Scheme at time of signing the certificate
- development approval (if any)
- effect on implied easements
- effect on new or previous restrictive covenants.
As some schemes may not fit the criteria, surveyors may have to research these requirements before proceeding with the merger.
7 Errors Found on Previously Registered Plans (formerly section 15.7 of the practice manual)
If in the course of a merger an error of a minor nature is discovered on the previously registered Strata Plan, the surveyor should contact the Strata Plan Audit Team or the Survey Advice Officer at Landgate to clarify what action is required to correct the error on the “new sketch plan”.
The “Surveyors Report” should be used to outline details of how the error will be rectified. Errors considered of a significant nature however may result in the necessity to terminate the scheme or re-subdivide the scheme or seek action for a “Direction to Amend by an Application to the Commissioner of Titles”. Errors of this nature may cause substantial processing delays and may impact upon other dealings on the Strata Lots (refer also STP-11 Scheme By-laws section 17).
8 Stratum Wording on Mergers (formerly section 15.8 of the practice manual)
The Regulations now provide a standard wording to be placed on the floor plan sheet to clarify the extent of the lots. All Strata Plans must bear a statement as to the boundaries of lots that are comprised in a building. The wordings for these definitions are stated in STGR regulation 5A. This applies to new Strata Plans and merger plans. Refer to section 5(1) (aa) of the STA (see Plan Example 27).
9 Written Documentation to Accompany the Plan (formerly section 15.9 of the practice manual)
Because of the variety of options available to lot proprietors exercising merger options, the documentation accompanying the “sketch plan” may be in several forms. For example, in a larger scheme the resolution may state:
- Boundaries of the buildings are to be moved to the external surfaces of the building.
- Common property is to be merged in accordance with the plan.
- Cubic space is to extend between 5 metres below and 50 metres above the floor of the building on a certain lot (note: such dimensions may be different from case to case).
Surveyors must check that the “sketch plan” accords with the resolution, eg if the resolution stated building additions are to be shown and the appropriate building licence has been issued, then the surveyor must verify this information and depict it on the plan.
10 Easements (formerly section 15.10 of the practice manual)
The merger option enables a Vehicle Access Easement to be created on the Strata Plan under section 21W of the STA. This easement is for parking, turning and access (see Plan Example 28). Surveyors should ensure that the resolution agreeing to the merger included the creation of the easement. Other forms of easements on mergers are created by deed or transfer.
The area covered by the easement must be depicted on the floor plan sheet with broken lines and sufficient information to establish the easement boundaries. A “Vehicle Access Easement” (STGR regulation 14E) must be depicted on the “sketch plan” (see Plan Example 28).
A schedule of Interests and Notifications (see STP-09 Scheme Plans section 1.14) must then be positioned on the plan form as specified in STGR regulation 14B (1) (b). The schedule should state the “dominant lots” and “servient lots” as well as the type of easement and regulation number. It is also possible to add to the schedule (in the “comments” column) the proportion of costs for maintenance over an easement by a specified percentage being recorded against the lots (STGR regulation 14C (a)).
Land Burdened/ Servient Lots
Benefit To/ Dominant Lots
Vehicle Access Easement
Reg 14E of STGR
APPORTIONMENT OF LIABILITY OF UPKEEP (Lot 1 70%, Lot 2 30%)
Table 15.1 - Example of Schedule
It is also possible to vary the terms of such an easement by lodging a memorial or instrument (see STGR regulation 14C (b)) that specifies other matters relating to the easement. If this is the case then the sketch and schedule will remain basically the same but the instrument or memorial number must be recorded in the “origin” column of the schedule.
No other easement type, whether STA, TLA or LAA, may be created automatically on mergers.
11 Existing Easements (formerly section 15.11 of the practice manual)
Easements created previously on any part of the common property merged with a lot will continue after the merger. These easements must be brought forward onto the merger plan. Easements already created by deed or transfer will encumber the titles to lots affected by them. The Strata Plan encumbrance schedule will still record the easement as an encumbrance against common property that is not merged.
Any airspace above a specified upper limit and any land below a specified lower level will remain as common property. In most cases an easement may continue to bind the strata company in so far as it applies above or below those levels.
12 Use (formerly section 15.12 of the practice manual)
A common mistake made with use in a merger is when surveyors attempt to vary the restrictive use boundaries on a merger plan without realising the need for the necessary resolutions, consents and documentation. This type of error regularly occurs on the “building over sewer” restrictive use. See STP-09 Scheme Plans for a comprehensive coverage of “Use”.
13 Encroachment on Mergers (formerly section 15.13 of the practice manual)
If, in the surveying of a merger plan, an encroachment of a building or attachment onto either a public road or right of way or onto an adjoining parcel is detected, the normal procedures that apply to a new Strata Plan apply in respect of the surveyor’s certification and the merger plan. This means that if there is an encroachment onto a public road or right of way the surveyor should check if approval has been granted by the local government. If the encroachment is onto an abutting parcel, an appropriate easement must be granted prior to the surveyor’s certification (see STP-09 Scheme Plans section 4.2 and 2.7). On the location plan of the merger plan, the size and nature of the encroachment must be shown.
There is provision on the surveyor’s certificate to accommodate encroachments. On the STGR Form 35, paragraph (b) (ii) provides for a certificate stating that encroachments are to be treated as for a new Strata Plan (under section 22(1) (c) of the STA.
14 Unit Entitlement on Mergers (formerly section 15.14 of the practice manual)
Unit entitlement on mergers is based on capital value within the meaning of the Valuation of Land Act 1978. Strata companies or lot owners registering a merger are required to provide a certificate from a licensed valuer (Form 36 STGR). This certificate must state either that the unit entitlement is unchanged or that it has changed as set out in an attached schedule (Form 3 STGR). It may be appropriate to combine both the certificate and the schedule on the same form (see Plan Example 27).
15 Registration (formerly section 15.15 of the practice manual)
STGR Form 32 must be used for mergers of land and STGR Form 33 must be used for mergers of building and land. Either a disposition form (STGR Form 39) or transfers of common property are required to dispose of the common property.
In simple terms, all of the lot proprietors are transferring their interests in the common property being merged with a particular lot to the proprietor of that lot. No stamp duty is payable unless there has been a payment for the transfer of those interests.
Strata companies or lot owners registering a merger are required to provide a certificate from a licensed valuer (Form 36 STGR). This certificate must state either that the unit entitlement is unchanged or that it has changed as set out in an attached schedule (Form 3 STGR).
The consents of all mortgagees and caveators are required in cases where the unit entitlement of a lot decreases on merger.
These forms must be correctly completed and must be lodged with the “sketch plan”. Care should be taken to ensure the dates on the forms correspond with the sequence of events that result in the registration of the “sketch plan”.
Landgate will forward a copy of the registered merger plans to the relevant local governments, and to the Water Corporation and Sewerage Authority.
Fees apply for:
- lodgement of the “sketch plan”
- lodgement of documents (notice of resolution plus disposition statement).