Development of community schemes

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Community Schemes are being introduced into Western Australia. They are a new option for subdividing a single parcel of freehold land into multiple community titles schemes that together are called a community scheme.

Community schemes already exist in other states including New South Wales, South Australia and Queensland.  In WA they will introduce new definitions, concepts, structures and processes.

Community schemes will not replace strata and survey-strata schemes which will still operate under the Strata Titles Act 1985. Strata and survey-strata schemes cannot be combined with community schemes.  Community schemes will not include leasehold schemes.

It is intended to introduce community schemes to Western Australia by new legislation, called the Community Titles Bill 2018.

Overview

Basic concepts within a community scheme

Every community scheme will have a community development statement (CDS) which will set out how the community scheme is to be subdivided and developed. The Western Australian Planning Commission (Planning Commission) will need to approve the CDS for the subject land before the land can be subdivided by a community scheme.

A community scheme may have up to 3 tiers of community titles schemes. Each individual scheme within a community scheme is called a community titles scheme.

A tier 1 scheme may have its own common property which is for the whole community and which every owner of a lot in the community scheme will jointly own.

A tier 2 scheme may have its own common property which the owners of lots in that tier 2 scheme and the owners of lots in a tier 3 scheme belonging to that tier 2 scheme will jointly own.

A tier 3 scheme may have its own common property which is jointly owned by the owners of lots in that tier 3 scheme.

The tier 1 scheme will have a community corporation which is the overarching management body for the community scheme. Each tier 2 and tier 3 scheme in the community scheme will have its own community corporation to govern and manage relationships and common property in that community titles scheme. The community corporation for a tier 2 or tier 3 scheme will represent its members and vote on their behalf at meetings of the community corporation of the scheme to which that tier 2 or tier 3 scheme belongs.

tiers within a community scheme

Figure 1: Tiers within a community scheme

The tier 1 corporation will make scheme by-laws for the tier 1 scheme. Each community titles scheme which belongs to the community scheme will also have its own scheme by-laws. Scheme by-laws for a community titles scheme apply to the members of that scheme and if that scheme has a member that is a tier 2 or tier 3 corporation, the members of that tier 2 or tier 3 corporation.

Creating community titles schemes

A community scheme comes into existence when the first community titles scheme, (tier 1 scheme) is registered over the land. The lots in the tier 1 scheme are called tier 1 lots, common property created is tier 1 common property and the parcel of land, a tier 1 parcel. If a tier 1 lot is subdivided by a community titles scheme, that scheme is called a tier 2 scheme, the lots are tier 2 lots, common property in the tier 2 scheme is tier 2 common property and the subdivided lot becomes a tier 2 parcel.

If a tier 2 lot is subdivided by a community titles scheme, that scheme is called a tier 3 scheme, the lots are tier 3 lots, common property in the tier 3 scheme is tier 3 common property and the subdivided tier 2 lot becomes a tier 3 parcel.

In each community titles scheme there must be at least 2 lots or 2 lots and common property.

The tier 1, 2 and 3 schemes that together comprise the community scheme belong to the community scheme.  The resulting development is a community of schemes with up to three tiers of ownership and management.

On registration of a community titles scheme the Registrar of Titles creates and registers certificates of title for the community titles for the lots in the scheme plan under the Transfer of Land Act 1893 (TLA) and the lots are able to be transferred mortgaged and otherwise and dealt with under the TLA.

Benefits of community titles schemes

Community titles (land) schemes will allow for large-scale planned land developments with shared infrastructure and services. Community titles (building) schemes will facilitate a mix of uses in one or more buildings on a parcel of land, for example, a single high-rise building that has residential, retail and commercial lots.

Creating a community scheme that contains multiple community titles schemes will enable each member scheme to have scheme by-laws which apply only to that scheme, and maintenance costs can be more fairly shared between the different schemes.

Under the Strata Titles Act 1985, sharing of common facilities and infrastructure by neighbouring schemes requires complex easement arrangements and contracts. Mixing of uses can also be achieved under the existing Act using a Management Statement that clearly states the different by-laws that apply to each use. However, there are no underlying legislative guidelines and there is often tension between the owners due to the failure to fairly share expenses and define rights of use.

New terms will apply to community titles schemes

The Community Titles Bill 2018 introduces new terms and concepts.

List of terminology

Community schemes will have scheme plans, community corporations, scheme by-laws, scheme notices, schedule of unit entitlements and common property. New terms that only apply to community schemes will be introduced along with new governance standards which may differ from the equivalent terms and standards in the Strata Titles Act 1985.

The following table shows the current strata terms and what terminology will be used in the new community schemes. For example, a strata scheme has a strata company and a community titles scheme will have a community corporation.

Terminology for community schemes

Strata Titles Act
Community Titles Bill

survey-strata scheme

community titles (land) scheme

strata scheme

community titles (building) scheme

strata company

community corporation

strata plan

scheme plan

survey-strata plan

scheme plan

strata / survey-strata lot

lot

common property

common property

management statement

scheme by-laws

Table 1: Equivalent Terms

Additional terms

Community Titles Bill word or phrase
Definition

Belong

In a community scheme the lots and common property belong to the scheme under which they are created.

A tier 2 parcel belongs to the tier 1 scheme.

A tier 2 scheme belongs to the tier 1 scheme.

A tier 3 scheme belongs to the tier 2 scheme to which its tier 3 parcel belongs and to the tier 1 scheme to which that tier 2 scheme belongs.

Community titles scheme

Any individual scheme, at any tier level within a community scheme.

Community scheme

All the community titles schemes within a community scheme.

Tiers of schemes

Within a community scheme there can be up to three tiers of community titles schemes

Tier 1 scheme

The first community titles scheme to be created and provides the overarching governance for all the tier 2 and tier 3 schemes which eventually belong to it.

Tier 2 scheme

This scheme subdivides a tier 1 lot into lots and common property or just lots. A tier 2 scheme belongs to the tier 1 scheme. Experience in other states shows that usually a tier 2 scheme will be the final subdivision level.

Tier 3 scheme

The ultimate level that can be reached where a tier 2 lot is subdivided into a community titles scheme. The tier 3 scheme created belongs to the tier 2 scheme that is subdivided and to the tier 1 scheme first created.

Community corporation

Tier 1, tier 2 and tier 3 community corporations.

Special resolution

A special resolution in a community titles scheme requires 75 per cent of the relative unit entitlement of members to vote in favour. The members of the scheme may be either lot owners or community corporations for schemes which belong to that scheme. Actions requiring a special resolution are specified in the Community Titles Bill.

Registration of a community titles scheme

Registration of scheme documents to create a community titles scheme that may be a tier 1, tier 2 or tier 3 scheme.

Registration of an amendment of a community titles scheme

Includes but is not limited to an amendment of a scheme plan which modifies a lot or common property or creates, modifies or discharges an easement or restrictive covenant that benefits or burdens a lot or the common property in a community titles scheme or amendment of a schedule of unit entitlements or amendment to give effect to making, repealing or amending a scheme by-law.

Scheme documents

The scheme plan, scheme notice, scheme by-laws and schedule of unit entitlements

Subdivision

A change to the boundaries of a lot or to the boundary of a tier parcel by registration of a scheme plan or by registration of an amendment to an existing scheme plan by way of re-subdivision of lots or lots and common property, consolidation of lots, conversion of lots to common property and adding land to or removing land from common property. Land can be subdivided by registration of a community titles scheme or by registration of an amendment of a community titles scheme.

Tier parcel

The parcel of land defined as the community titles scheme for that tier. This means that the tier 1 parcel is the land encompassed entirely by the community scheme. Tier 2 parcels and tier 3 parcels refer to the land encompassed by each subdivision at those levels.

Tribunal

The State Administrative Tribunal.

Related scheme

A community titles scheme is related to each community titles scheme to which it belongs or that belongs to it and the community corporations of the related schemes are related community corporations.

Table 2: Additional terms

A community scheme will have multiple community titles schemes

A community scheme will have one or more community titles schemes which belong to it. A community titles scheme can be a community titles (building) scheme or a community titles (land) scheme with each scheme having its own scheme plan, scheme notice, scheme by-laws, body corporate (called a community corporation), schedule of unit entitlements and common property (if any).

Community titles scheme is created on registration

Each scheme in the community scheme comes into existence when all the scheme documents are registered by the Registrar of Titles and incorporated in the Register maintained under the TLA.

The community corporation of each community titles scheme will be responsible for managing their own common property, enforcing scheme by-laws and holding their own meetings.

There can be up to three tiers in a community scheme

  1. A tier 1 lot can be subdivided by a tier 2 community titles scheme
  2. A tier 2 lot can be subdivided by a tier 3 community titles scheme
  3. A tier 3 scheme cannot be further subdivided.

A community scheme can contain community titles (building) schemes and community titles (land) schemes. There are some limits on this though.

A community titles (land) scheme, where lots are defined by area with lateral boundaries (like a survey-strata lot), can have schemes belonging to it that include a community titles (building) scheme or a community titles (land) scheme. However, a community titles (building) scheme, where each lot is defined as a cubic space by reference to a building on the scheme plan, can only have schemes belonging to it that are community titles (building) schemes.

Planning framework for community schemes

Relevant planning and development approvals must be obtained under the Planning and Development Act 2005 for the subdivision of land by a community scheme. Before land can be subdivided by a community scheme the Western Australian Planning Commission (Planning Commission) must approve a community development statement for the community scheme.

Community Development Statement

A community development statement (CDS):

  • will govern how the community scheme is going to be subdivided and developed
  • will govern how amendments to the community scheme by subdivision can be done in the future.

Purpose of a Community Development Statement

A CDS will set out the detailed land use, subdivision and development controls and developer obligations for a community scheme. It will fulfil several purposes for different parties, including:

  • regulators, as the basis for ongoing decision making by the Planning Commission and other decision-makers concerning applications for subdivision and development approval
  • developers, as the basis of investment decisions and for coordination of implementation, especially in more complex developments involving multiple developers
  • utility service providers, in designing and coordinating detailed infrastructure and service provision for the site
  • architects, designers, landscapers and builders, in designing and undertaking development and construction in a thematic approach, if required
  • community corporations in the scheme, in approving amendments to the CDS
  • owners and occupiers of individual lots in the community titles schemes within the community scheme, to provide clarity and certainty as to what will occur in different stages of the development
  • buyers of lots and proposed lots in a community titles scheme.

Content and format of a Community Development Statement

A CDS may be prepared by the owner of the subject land or their authorised agent. A community scheme must have a CDS. Tier 2 and tier 3 schemes will not have a separate CDS. The CDS will be registered on registration of the tier 1 scheme documents to create the community titles scheme that creates the community scheme.

Contents of a Community Development Statement

A CDS will be a set of documents, plans, specifications and drawings that describes how a parcel of land is proposed to be subdivided and developed to create a community scheme.

A community scheme may be based upon land subdivision and hence provide for multiple separate developments (existing and or proposed buildings) or be based on a single development (building or buildings) and the content of a CDS will vary accordingly.

A CDS, along with any other information that may be required by the Planning Commission, must include the location of the parcel and then may contain the following information:

How it will be subdivided, including:

  • proposed community scheme subdivision
  • number of proposed tiers of management and number of schemes in each tier
  • number of proposed types of scheme - land or building
  • number of proposed lots in each scheme
  • intended land use of proposed lots
  • size/area and arrangement of proposed lots in each scheme
  • location and scale of existing and proposed development
  • existing and proposed ground and floor levels
  • siting of existing and proposed buildings and development
  • open space requirements or money to be paid to local government in lieu
  • the contributions by the original owner for public infrastructure
  • location and provision of infrastructure, services, facilities and amenities in each proposed stage, community scheme or member scheme
  • movement arrangements including access to transport and proposed roads, paths and car parking
  • work required to be completed
  • how it will be developed, including architectural and design themes and requirements
  • identification of any heritage features of the site and any proposals or measures to be taken in relation to their restoration or conservation
  • existing and proposed vegetation and landscaping
  • a plan for provision of utility services and utility infrastructure
  • existing and proposed drainage and water features
  • sustainability features
  • land to be dedicated, ceded to, acquired or managed by a relevant authority (if applicable)
  • land to be subject to restrictive covenants, easements or easements in gross (if applicable)
  • How the subdivision and development may be sequenced and staged
  • The planning (scheme by-laws) that may be imposed.

A CDS may include text, maps, plans, tables, diagrams, sketches, specifications, schedules and any official registers of value and ownership, and is to be in a form prescribed or required under the Community Titles Bill.

The CDS may also reference relevant approvals, including those obtained under other Acts, and may incorporate reference interpretations set out by a relevant statute, subsidiary legislation or planning scheme, and a gazetted State Planning Policy or Australian Standard, or relevant requirements of such documents.

The development period

The development period for a community scheme is 10 years (or other period fixed by regulation) from registration by the Registrar of Titles of the tier 1 scheme. This period may be extended by the Planning Commission.

A Community Development Statement must:

  • be approved by the Planning Commission prior to approval of a proposed community scheme subdivision.
  • not be approved if it would conflict with a State planning policy or a planning scheme or interim development order that has effect in the locality in which the land is situated.

Preparation and consideration of a Community Development Statement

Reviewing the Community Development Statement

Under the Planning and Development Act 2005, the Planning Commission is the central planning decision-maker in the WA planning system; however local governments, Development Assessment Panels and the State Administrative Tribunal also have key roles. The role and responsibility for the consideration and approval of a CDS will primarily lie with the Planning Commission, but the Planning Commission will still have the power to delegate certain decisions as per the current Planning and Development Act 2005.

The Planning Commission is to refer the CDS to the responsible local government, other agencies and utilities within 7 days of receiving the CDS. The responsible local government and other entities are to provide their advice on the CDS during the period specified by the Planning Commission for comment.

The Planning Commission and/or relevant local government may require the draft CDS be advertised for public comment, and if so, comments received will be taken into consideration. The Planning Commission can charge a fee for dealing with the application.

Community Development Statement Conditions

The Planning Commission may approve a CDS with conditions that include amendment, insertion or deletion of proposed content including:

  • changes to or substitution of plans and designs
  • specific requirements, standards, additional detail or clarity to be inserted into the CDS
  • for the developer, to set out or follow a set sequence in which various stages of the proposed subdivision or development will be implemented
  • for the developer to specify when land will be ceded or dedicated, and infrastructure, landscaping, shared facilities and services will be constructed or completed as part of the sequencing of the development.

When can the Planning Commission reject a Community Development Statement?

The Planning Commission may refuse a draft CDS if:

  • the proposed community scheme does not comply with an applicable planning scheme or State planning policy
  • the Planning Commission considers that conventional or other land tenure arrangements would be preferable or necessary to secure orderly and proper planning and development outcomes or the public interest
  • the proposed community scheme is inconsistent with orderly and proper planning
  • the relevant local government and/or other entities do not support that CDS regarding relevant planning considerations
  • it does not comply with required content or form or other circumstances that may be prescribed.

The State Administrative Tribunal will have the power to review decisions

If the Planning Commission exercises a discretionary power in decision-making concerning a proposed CDS, a right of review by the State Administrative Tribunal will be available.

The approval of a CDS by the Planning Commission will lapse after four years if it is not registered with a tier 1 scheme within that period.

The status and effect of the Community Development Statement

The status and effect of a Community Development Statement will change depending on what stage it is in

Status and effect of the Community Development Statement

Figure 3: Status and Effect of a CDS

Effect of a CDS during the approval period

One of the key differences between a CDS and other statutory planning instruments (such as a local structure plan) is how the CDS can bind planning decision-makers, owners and developers. The approval period for a CDS is the period after a CDS is approved and before registration of the tier 1 scheme to create the community scheme. During the approval period, a planning decision-maker:

  • must give due regard to the approved CDS when assessing a development application
  • must approve a subdivision application if that application is consistent with the approved CDS

CDS is binding during the development period

The development period begins on registration of the tier 1 scheme and CDS and runs for 10 years. During the development period, the registered CDS:

  • binds developers: developers cannot obtain development or subdivision approval if inconsistent with the CDS
  • binds owners: owners cannot object to development or subdivision where it is consistent with the CDS
  • binds planning decision-makers: the decision-maker must approve a subdivision or development application that is consistent with the CDS.

The development period may be extended on application of an applicant for a planning approval and on provision of a copy of a special resolution of the tier 1 corporation approving the extension.

Effect of a CDS after the development period

Once the development period has expired, a planning decision-maker must give due regard to the CDS when assessing:

  • a development application or
  • a subdivision application.

Amendment of a CDS

A CDS can be amended:

  • before the CDS is registered with the tier 1 scheme, by application of the developer to the Planning Commission
  • After the CDS is registered with the tier 1 scheme plan, the community corporation for the tier 1 scheme must approve the proposal to amend the CDS by special resolution before an application can be made to the Planning Commission.

The Planning Commission may approve the application to amend the CDS, provided the amended CDS is consistent with the planning scheme.

Exemption of additional planning documentation

The Planning Commission, in consultation with the relevant local government, may waive the need for a statutory planning instrument such as a Local Structure Plan, Local Development Plan or Activity Centre Plan, in accordance with the planning scheme that is in operation, where a CDS has been prepared and approved by the Planning Commission for the land.

Amendments are effective when registered

A change to the registered CDS will not be given effect until the the amended CDS (or by order of the Tribunal) has been lodged with the Registrar of Titles and registered or the Planning Commission has given notice of the extended date of the development period in the prescribed form and the Registrar of Titles has recorded the notice.

Planning Applications

Subdivision and development applications

In Western Australia, subdivision and development have separate meanings. Although related they are not interchangeable. Subdivision and development of a community scheme may be by a single owner and developer, or by multiple owners or developers.

The subdivision and development may be in accordance with:

  • a single (or coexisting) subdivision, and/ or
  • a development application and approval, or
  • multiple (not necessarily concurrent) subdivision and/ or development applications and approvals.

While subdivision of a site often comes before development, subdivision and development applications regarding a parcel of land may occur in any order.

While the Planning Commission is the decision-maker for all applications to subdivide land ( the Planning Commission has delegated its function in certain cases), development applications may be decided by various decision-makers. In addition to the Planning Commission, local governments, Development Assessment Panels and the Metropolitan Redevelopment Authority constituted by the Metropolitan Redevelopment Authority Act 2011, have roles in relation to exercising development control.

Decision-making in relation to applications for subdivision and development approval is, in practice, largely discretionary. An applicant may make an application for approval at any time and the decision-maker is generally unrestricted when determining an application for approval, by either the content of a planning scheme or Local Structure Plan or the advice received on referral of an application.

These aspects lead to coordination and implementation problems, which are made more complex by the nature of a community scheme, where there may be shared ownership of the site, both during subdivision and development phases, and upon completion of the entire scheme.

Subdivision and development applications in relation to community titles schemes

The process set out in the Planning and Development Act 2005 (PDA) will apply to subdivision applications for a community titles scheme. The application to the Planning Commission, referral for advice and consideration of a proposed plan for subdivision for community titles (building) schemes and community titles (land) schemes, will apply to community titles subdivision applications.

Two step subdivision approval

There is a two-step planning approval process for subdivision of a community titles scheme.

Step one: approval of a plan of subdivision (s. 135 PDA). Note that planning conditions may be imposed at this step.

Step two: endorsement of the scheme plan (s. 145 PDA).

Any conditions imposed at subdivision approval (step 1) and at development approval (if any) will need to be complied with before the Planning Commission will endorse the scheme plan (step 2).

A scheme plan cannot be registered without the Planning Commission’s endorsement of the scheme plan.

Development Applications

Application for development approval in community titles schemes will be made to the local government under the relevant planning scheme.

Building Approvals

Generally, building work cannot be undertaken without a building permit. A building permit will not be issued unless the applicant has obtained each authority required under the legislation.

An occupancy permit or building approval certificate under the Building Act 2011 will be required to be lodged with the scheme documents for registration in the case of a community titles (building) scheme.

Plan requirements

Community titles schemes will have two different kinds of plans.

  1. Community titles (land) scheme plans will be like survey-strata plans. The plan will have survey dimension boundaries and any portion of the parcel which is not a lot will be common property.
  2. Community titles (building) scheme plans will be like strata plans. The plan will have cubic space to define the lots by reference to a scheme building and any portion of the parcel which is not a lot will be common property.

Registration requirements

The following documents must be lodged to register a community titles scheme:

  • scheme plan approved by the Planning Commission
  • a schedule of unit entitlements
  • the scheme by-laws
  • scheme notice containing the name of the community corporation and address for service
  • an approved community development statement in respect of a tier 1 scheme plan.

The scheme documents must be accompanied by:

  • an approved CDS if the community titles scheme for registration is the tier 1 scheme
  • licensed surveyor and licensed valuer certificates
  • occupancy permit or building approval certificate under the Building Act 2011, if the scheme is a community titles (building) scheme
  • evidence that the requirements for making scheme documents have been complied with, including consents of persons having a type 1 or type 2 interest over the land.

A person has a type 1 interest if the person holds the remainder or reversionary interest in land comprised in a lot in a community titles scheme, or the person holds a registered mortgage, or is a judgment creditor or the person named in a memorial as having a statutory right requiring consent of the person to any dealing with the land, or holds a registered plantation interest, carbon covenant, carbon right or profit a prendre.

A person has a type 2 interest if they hold a registered lease or a caveat recorded under the TLA.

A community titles scheme may be amended

Amendment of a community titles scheme that involves subdivision is:

  • re-subdivision (alteration of boundaries of one or more lots and or common property to create one or more different lots and or different common property)
  • conversion of a lot to common property
  • consolidating 2 or more lots into 1 lot
  • transferring common property into a community titles scheme
  • transferring common property out of a community titles scheme.

Each of these amendments to a community titles scheme will require the 2-step subdivision approval of the Planning Commission and will also require consents of owners and type 1 and 2 interest holders before the amendment can be registered.

Other amendments of a community titles scheme include amending the schedule of unit entitlement, scheme notice and scheme by-laws.


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Disclaimer

This information has been prepared for the purposes of informing stakeholders and the community on the nature and scope of the proposed reforms to the legislation relating to strata title. Every effort has been made to ensure the information presented is accurate at the time of publication. Because this information avoids the use of legal language, information about the law may have been summarised or expressed in general statements. This information should not be relied upon as a substitute for professional legal advice or reference to the actual or proposed legislation. The contents should not be relied on as a guide for current or future legislation relating to strata title or community title in Western Australia or in relation to current or future subdivision or development proposals, commercial transactions or dealings in strata title.

This page was last updated on: 19 Jul 2018