What Is Community Title?

What Is Community Title?

What Is Community Title?

There are many things that you should know before you buy a property. Property is something you will invest considerable finances in and time and effort, so it is wise to undertake your  research, not just concerning which property you purchase but also about the land and title that is part of the transaction. You should know if the property has a community title or a strata title as though there are similarities between strata and community titles, the two are not the same. Many people enjoy community living as it can provide company, support and recreational facilities they would otherwise not afford.

A Community Title Scheme

In a Community title scheme, when the purchaser buys a ‘lot’, they become an owner of that lot. By purchasing the ‘lot’, they also become a shareowner of common property areas and, as such, have some responsibility for the site. In the property world, the word lot refers to a piece or parcel of land that someone owns. A community scheme can reference one or more cubic areas shown on a floor plan as a lot but would not include common infrastructure.

Community titles can be pretty extensive, incorporating several buildings and considerable land. The lot owners’ entitlements and boundaries are delineated with surveyed land measurements. Gated estates and significant developments that have shared services and infrastructure have lots based on land measurements that are owned individually. These communities are part of community title schemes.

In most states in Australia, including NSW, a community title will refer to a property with a minimum of two lots with common shared areas such as gardens, recreational land or driveways. It is generally used for larger estates with many residential lots, including retail and/or commercial outlets.

How Is A Community Scheme Created?

When establishing a community title scheme, the owner must register the setup. The area needs to be made up of more than two lots plus common areas and managed by a body corporate. The applicant must submit a community management statement along with an outline of lot sizes and shared spaces. The corporate body, also known as the owners’ corporation or community association, will be composed of the lot owners. All the shared common areas are managed by the corporate body and are considered the association’s property.

When setting up a community, the property owner will submit to the local council, including a precinct plan, to register the property as a community title.

Benefits Of Community Title Schemes

People choose to live in areas with a community title scheme as there are many benefits. People enjoy the community aspects of living closely with others. These schemes also provide shared ownership of common areas that they may not be able to afford or upkeep if they lived outside the community. This area’s benefits include common garden areas and recreational facilities like tennis courts, playground equipment, and swimming pools. Some community estates have the added benefits of providing members with country club memberships, security including security patrols, community activities, walking and bike paths etc.

Lot owner members have voting rights and ongoing input into how the common and recreational areas are managed and what upgrades may be valuable for the community. The community manages insurance for common areas and facilities, reducing insurance costs and providing peace of mind for owners. Many have also found that well developed and well-maintained landscaping can add value to their property.

So, it is obvious there are benefits from a community title scheme but are there any disadvantages? Some things can be seen as disadvantages, and a buyer needs to investigate and consider these. In some communities, lot owners must pay the levies to maintain the common areas. Buyers should find out what the levies will be before buying into a community. Some find that the rules in place around landscaping and changes to buildings are restrictive. Again, as long as the buyer makes themselves aware of how the community is run and what rules are in place, they will be mindful of any restrictions before buying. However, the community’s insurance covers all common areas; each lot owner will need to have their insurance for their lot.

Community Maintenance

To be registered as a community title scheme, the community must have some common property. All the lot owners pay set levies to ensure that maintenance occurs and upkeep and developments are possible. Decisions about these things are made by the body corporate. Each lot owner becomes a member of the body corporate, so he/she has input regarding setting the levies, considered developments, and how they will manage the maintenance. The greater the value of the lot you own, the greater the input the person can have. The corporate body members are a management body who make any required decisions as a group. Decision making takes place at meetings allowing all the owners of lots to have fair input. At the Annual General Meeting (AGM), the budget is set for the following financial year.

Summary

A community title scheme is one in which the owner of the lot lives in a community where there are shared common areas. The community will have a shared management statement and a managing body. There are many benefits from living in a community title scheme; however, they do not suit everyone. If you are looking at a lot in a community title scheme, it is essential to look into the community’s management, what levies are required, the precinct plan and what you will own.

Frequently Asked Questions

1. What is the difference between strata and community title?

There are similarities and differences between strata title and community title. Still, in brief, a strata title is well defined by the building’s boundaries rather than the land as all the land is common property. In contrast, community titles have lot boundaries indicated by surveyed measurements.

2. Do you have to have your insurance in a community title scheme?

The simple answer to this question is yes. The body corporate will organise insurance for all communal areas, but each lot owner is responsible for ensuring their lot. The community association covers public liability insurance.

3. Is community title the same as strata schemes?

There are some similarities between a community scheme and strata schemes, but there are also differences. There is a difference in how the boundaries are set up. Apartments, units and townhouses, and retirement villages are often on strata titles, while a property with a community title usually has separate dwellings with shared driveways and common areas. There are several differences, and you should research well before purchasing.

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