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1. Schedule of unit entitlements (CTA sections 41 & 42)
Each community titles scheme has a schedule of unit entitlements. It is one of the scheme documents required to be registered with a community titles scheme. It is an approved form which is available on Landgate’s website. The unit entitlement of lots and tier parcels in a community titles scheme has an important role in determining:
- the share in common property that the lot owner has in the scheme and schemes to which the lot owner's scheme belongs,
- subject to scheme by-laws, the contributions payable by a member of the scheme, and
- voting rights attached to lots and tier parcels in the scheme.
To create a community titles scheme the CTA provides for a licensed valuer to allocate unit entitlement to each lot based on the value of the lot in proportion to the total value of all lots in the scheme. This proportion must not vary by more than 5% more or less from the value the lot bears to the aggregate value of all of the lots in the scheme.
The CTA contains provisions which in certain circumstances allow unit entitlements to be varied from time to time to ensure that owners and mortgagees’ interests are protected. In a community title (building) scheme (building scheme) a proprietor may improve their lot with building additions and alterations which may result in a higher property valuation. Steps can be taken to amend the unit entitlement of the lot to reflect these changes if they mean that the relative value of the lot to other lots or tier parcels is greater than 5%.
Unit entitlement must be expressed in whole numbers on the schedule. The valuer’s certificate for a community titles scheme is valid for a period of 2 years from the date of the valuer signing the certificate. If the scheme is not registered within this time frame, then the valuer’s certificate lapses. The status of the scheme plan will indicate this and a new certificate and schedule of unit entitlements will be required before registration can proceed.
- Note: A fee is required when lodging a replacement schedule of unit entitlements for a community titles scheme that has a status of “Lapsed”.
The schedule of unit entitlements is lodged with the scheme plan or amendment of scheme plan effecting subdivision (if applicable).
1.1. Valuer's Certificate for a Community Titles (Building) Scheme
A licensed valuer must certify unit entitlement for a building scheme based on capital value within the meaning of the Valuation of Land Act 1978 (VLA). This means valuing the buildings and improvements (as defined in the VLA) on the lots together with the land content. Once the scheme is registered the unit entitlement will remain in force until action is taken to amend it.
A valuer must determine the capital value as if it had the standard level of internal fit out and finishes, which is the level that the licensed valuer determines to be a reasonable representation of the average expected level for lots in the scheme of that property type (residential, commercial or industrial) and of commensurate age.
The standard level of internal fit out and finishes for a lot must be determined by the valuer after:
- conducting a physical inspection of the tier parcel of the community titles (building) scheme;
- conducting an internal inspection of as many lots in the scheme as is reasonably practicable to enable a reasonable assessment of the average expected level of fit out and finishes for lots of the same property type and of commensurate age to be made;
- taking into account any relevant information obtained from the following:
- the community corporation;
- the scheme plan;
- the original subdivision owner of the lot;
- the community development statement (CDS) for the community scheme to which the lot belongs.
An anomaly occurs when the building scheme contains a “vacant lot”, a lot that is wholly unimproved apart from having merged improvements (as defined in the VLA). The scheme will contain a certificate from a licensed valuer that certifies that the unit entitlements are based on the value of the lots containing buildings compared to those not containing a building. This is satisfactory until buildings are constructed on the vacant lots.
Unless reallocation of unit entitlements is effected, the various unit entitlements may be out of proportion to the unit entitlements which should apply if the lots were revalued on completion of the construction of the building on the lot. Should the scheme be terminated, the resultant title will be issued in the name of all the lot owners in undivided shares proportional to the unit entitlement of their lot. If the unit entitlement of a previously vacant lot has not been updated, the owner of that lot may be seriously disadvantaged if the scheme is terminated.
As the Community Titles Regulations 2021 (CTR) provides that in determining the value of a lot in a building scheme, a licensed valuer must not use improvements to a lot to determine the capital value of the lot unless the improvements are shown on the scheme plan. Therefore, it is important for the scheme plan for a building scheme to be amended to show improvements to a lot or lots in the scheme.
1.2. Valuer's Certificate for a Community Titles (Land) Scheme
A licensed valuer is required to certify that unit entitlement of a lot or tier parcel in a community titles (land) scheme and (scheme) is derived from site value within the meaning of the VLA. This means the value of the buildings and improvements on the lots are not taken into consideration when calculating unit entitlement.
1.3. Lodgement of Schedule of Unit Entitlements
A schedule of unit entitlements is lodged as an attachment with the lodgement of the scheme plan through the plan portal.
2. Amendment to the Schedule of Unit Entitlements
An amendment of a schedule of unit entitlements may only be registered:
- as a result of an amendment of the scheme plan to give effect to subdivision; or
- if the amendment is authorised by special resolution of the community corporation; or
- if the amendment is authorised by order of the State Administrative Tribunal (SAT).
SAT may, on the application of a community corporation or the owner of a lot in a community titles scheme, authorise the amendment of the schedule of unit entitlements for the scheme if satisfied that the schedule would require amendment for compliance with CTA section 41(2) (that is, the proportion that the unit entitlement of a lot or tier parcel bears to the sum of the unit entitlements of all the lots or tier parcels in the scheme must not be greater than 5% more or less than the proportion that the value of the lot or tier parcel bears to the sum of the value of all lots or tier parcels in the scheme).
If SAT makes an order under this section, the applicant for the order must lodge a copy of the order with the Registrar of Titles for registration of the amendment of the schedule of unit entitlements.
See CTS-11 Registration of an Amendment of a CTS not effecting subdivision for information on registering an amendment of the schedule of unit entitlements.