STP-13 Merger of Common Property and Lots in Certain Strata Schemes
Version 2 – 01/05/2020
Schedule 2A of the STA contains special provisions for single tier strata schemes, including:
- Lot boundaries (clause 3AB)
- Merger of common property (clauses 21E to Z)
- Conversion to survey-strata (clauses 31A to K)
- Insurance (clauses 53A to E)
A single tier strata scheme is a strata scheme:
- in which no lot or part of a lot is above or below another lot; or
- that would come within paragraph (a) except for any lot that has a permitted boundary definition (Schedule 2A clause 3).
Information on lot boundaries under Schedule 2A clause 3AB can be found in STP-03. This guide focuses on information specific to single tier strata schemes registered before 1 January 1998 (relevant scheme) concerning merger of common property into strata lots and conversion of strata schemes to survey-strata schemes.
1 Merger of Common Property Lots
This guide explains in detail how to merge buildings that are or are on common property into lots on the strata plans for a relevant scheme. This process allows changes to lot boundaries to conform to owners’ perception of their property ownership in many single tier strata schemes registered before 1 January 1998. For schemes registered after this date only the normal process of type 4 subdivision (re-subdivision) can effect such changes to lot boundaries.
2 General (Schedule 2A clauses 21A-Z of the STA)
Mergers can be used in a variety of ways that allow a strata company for a relevant scheme 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 determine the appropriate unit entitlement of the scheme. Where an amendment to the unit entitlement is required, the licensed valuer is to certify this on a Schedule of Unit Entitlements.
Short form easements for vehicle access, parking or 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 (sections 61-66) of the STA remain in place and Schedule 2A clause 12A of the STA provides further rights for owners whose boundaries are changed under Schedule 2A clause 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. 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.
3 Drafting Guidelines
Most drafting guidelines for mergers are common to all plans under the STA. These drafting matters specific to strata plans are recorded in STP-09. 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
Mergers are available only from the Survey Channel on My Landgate. All merger plans (referred to as “sketch plans” – see Schedule 2A clause 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 2 to 5 lot scheme, it is intended to show a building that has been constructed on a “vacant lot”, a merger “sketch plan” showing all buildings and all part lots comprising the parcel may be used.
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 Type 4 subdivision (re-subdivision).
To achieve a merger, 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 schedule of unit entitlements. On completion of these tasks, lot owners pass a resolution without dissent (or unanimous resolution in a two lot scheme) agreeing to the new plan and schedule of unit entitlements and execute the Notice of Resolution of Merger and Disposition Statement on Merger of Land or Conversion to a Survey-Strata Scheme.
5 Surveyor’s Certificate
By signing the regulation 54 certificate of the Licensed Surveyors (General Surveying Practice) Regulations 1961 on the sketch plan, surveyors will need to be mindful that they are certifying to the following:
If any building variation or the addition of a new building to the existing plan is depicted on a merger “sketch plan”, that the addition has been the subject of a building permit under the Building Act 2011 or a building licence under section 374 of the Local Government (Miscellaneous Provisions) Act 1960 (see Schedule 2A clause 21U).
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 Schedule 2A clause 21U STA). 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.
5.2 Planning Schemes
A surveyor has specific responsibilities to ensure the newly created lots comply with certain requirements of any relevant local planning scheme or improvement scheme in accordance with the Planning and Development Act 2005 (Schedule 2A clause 21U(3) and Schedule 1 clause 8 ST(G)R). Briefly those requirements are:
- number of car parking bays and rights of vehicular turning and access per lot
- 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 should take into account:
- provisions of the relevant scheme at time of signing the certificate
- development approval (if any)
- effect on statutory easements
- effect on new short form easements or restrictive covenants.
As some schemes may not fit the criteria, surveyors may have to research these requirements before proceeding with the merger.
6 Errors Found on Previously Registered Plans
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 Landgate to clarify what action is required to correct the error on the “new sketch plan”. Errors considered of a significant nature however may result in the necessity to terminate the scheme or carry out a Type 4 subdivision (re-subdivision) on 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.
7 Stratum Wording on Mergers
All strata plans must bear a statement as to the boundaries of lots that are comprised in a building. The wording for these definitions is addressed in STP-01 (see Plan Example 27).
The merger option enables a short form easement for vehicle access Easement (ST(G)R Regulation 31) to be created on the sketch plan under schedule 2A clause 21W of the STA. This easement is for parking, turning and access (see Plan Example 28). 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.
It is also possible to vary the terms of a short form easement by lodging a memorial or instrument (see ST(G)R regulations 22 and 29) that specifies other matters relating to the easement. If this is the case then the sketch and Interests & Notifications schedule will remain basically the same but the instrument or memorial number must be recorded in the “origin” column of the schedule (see table below).
Land Burdened/ Servient Lots
Benefit To/ Dominant Lots
Vehicle Access Easement
Schedule 2A clause 21W STA
Reg 31 of STGR
This Plan and Doc
Table 1 - Example of Schedule
No other easement type, whether STA, TLA, P&D Act or LAA, may be created automatically on mergers.
9 Existing Easements
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 sketch 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.
10 Restricted Use Condition
A common mistake made with restricted use condition in a merger is when surveyors attempt to vary the restricted use boundaries on a sketch plan without realising the need for the necessary resolutions, consents and documentation. This type of error regularly occurs on the “building over sewer” restricted use. See STP-09 for coverage of “Restricted Use Condition”.
11 Encroachment on Mergers
If, in the surveying of a sketch 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 sketch 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). On the location plan of the sketch plan, the size and nature of the encroachment must be shown, as well as whether the strata company or a lot owner will be responsible for the control and management of the encroaching structure (section 33 STA and Regulation 12 ST(G)R).
12 Unit Entitlement on Mergers
Unit entitlement on mergers is based on capital value within the meaning of the Valuation of Land Act 1978 and determined by ST(G)R Regulation 54. If unit entitlement is to be amended as a result of the merger, a schedule of unit entitlements certified by a licensed valuer in accordance with ST(G)R regulation 55 will be required to accompany the notice of merger form - see Plan Example 27).
13 Registration (see STR-03 Common Property)
A Notice of Resolution of Merger form must be used for mergers of building and land. Either a Disposition Statement on Merger of Land or Conversion to a Survey-Strata Scheme 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.
A certificate of consent from all registered interest holders and caveators is required in cases where the unit entitlement of a lot decreases on merger.
The Notice of Merger forms and other documents mentioned above 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 sketch plan to the relevant local governments, and to the Water Corporation and Sewerage Authority.
Fees apply for the lodgement of:
- the “sketch plan”
- Notice of Merger
- Disposition Statement for Mergers of Land and Conversions to Survey-Strata Scheme