for everything you need to know about strata...

strataman says
“One development of the strata legislation involved the creation of Community schemes.  While these can take on a variety of flavours the most commonly known is the Neighbourhood scheme where a group of properties share some common property or facility such as a private road or a security gate which then needs to be maintained by all the lot owners.  Even though Community schemes are very similar to Strata schemes in many ways there are some important differences.  If you'd like or need to know more, read on......”

WARNING WARNING
Everyone is still trying to come to grips with exactly how the NEW legislation changes (that came into effect on Nov 30, 2016) will affect our strata lives and some companies may be a little slow changing some of their webpages, forms and articles to reflect the new laws.

So please be a little patient if some of the links I give you refer back to some old legislation or have simply disappeared.

I have to have SOME faith so I'm hoping most will update their info as soon as possible. Eventually everyone will be on the same page but it could take just a little time.  Just know that I will be keeping my ear to the ground for changes...and that I will do my best to fix what I can as soon as I can.

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COMMUNITY SCHEMES & NEIGHBOURHOOD SCHEMES



What are Community Schemes?

In very simplistic terms, the Community Schemes legislation provides for subdivisions where a lot owner owns and maintains any buildings constructed on that lot and also shares the use (and the maintenance costs) of Association Property facilities which could include:

  • gymnasium
  • swimming pool and spa
  • tennis court
  • marina
  • sporting facilities
  • golf course and clubhouse
  • bowling green
  • recreation club
  • parklands and gardens
  • roadways
  • communal amenities like showers and toilets
  • security systems, etc.

On the surface, there would seem to be very little difference between Community schemes and the more common Strata schemes you see everywhere, especially in and around Sydney - and in some cases there IS very little difference while, in others, the differences can be large.  If you want to read the 'fine print' of the legislation for community and neighbourhood schemes then click on the link at the bottom of this page.

The differences explained....

Generally, Strata schemes are aimed more towards your 'typical' block of home units which share facilities like landscaping, driveways, underground garages, a pool, a lift and so on, while Community schemes tend to be for the more complicated structures sometimes involving different building types (like units, townhouses, villas, townhomes, free-standing homes, etc and community facilities such as a clubhouse) which can also then be under different title types - and all in the one estate!

So again, explaining "who is responsible for what" in simple terms.....the lot owners in a Strata Scheme are responsible for maintaining everything within the airspace of their lot (but not the actual structure of the building) as well as for the upkeep of the scheme's common property (which includes the structure of the building).  In contrast, the lot owners in a Community scheme are generally responsible for maintaining any structures on their lots (including the buildings), everything inside those structures as well as the upkeep of any "common property" - known as Association Property.  Now, while the differences seem subtle they can have a very large effect on 'who pays for what' when something needs fixing or replacing.  The Community Management Statement contains all the obligations and responsibilities of the lot owners.

One example....

NSW Fair Trading stated in their "Living in a Community Scheme" booklet there were 350 Community Schemes and 900 Neighbourhood Schemes in NSW in 2009 so, if we extrapolate those figures out a little, we should have approximately 1,500 Community & Neighbourhood schemes in New South Wales in 2016.  This could be way off base but it sounds feasible so we'll run with it till I hear otherwise.  If someone out there happens to have access to the latest actual figures, please let me know.

These schemes are based around rural lifestyles, golf courses, vineyards, hotel and holiday resorts, and so on while others provide a particular theme or style of housing such as cabins, mobile homes, caravan parks, retirement villages and the like.  However, the majority of Community schemes would be the more common estate-style schemes where you might have, say, 100 townhomes in a gated estate sharing a common:

  • security gate(s) and perimeter wall
  • access roadway
  • manicured gardens
  • swimming pool
  • gymnasium
  • clubhouse

In this case, the owners of the townhomes would generally be responsible for looking after their own property in entirety (i.e. the inside AND outside of the property on their small plot of land including a driveway, a garage, fences, a gate, a mailbox and so on) while contributing financially towards the upkeep of the 'jointly owned' facilities being the main security gate(s), the perimeter wall, the access road, the gardens, the pool, the gym and the clubhouse.

Under this setup we get a sort of 'pseudo-Strata Scheme' that IS a little different to the typical 'block of units' Strata scheme where each unit owner is responsible for maintaining only the INSIDE of their unit whilst paying a levy towards the upkeep of everything else within the complex including:

  • main building structure (which contains the units)
  • stairwells allowing access to the units
  • pool, lifts and any other facilities present
  • gardens and landscaping for the entire complex
  • driveways, garages and other parking areas (such as visitor parking)
  • mailboxes, intercomms, garbage areas and so on

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Home v Community/Neighbourhood v Strata

With typical home ownership (i.e. under a freehold torrens title), the home owner maintains everything to do with the home - inside and out - with no additional outlay for any commonly-owned property - as there is none.  Compare this to the Community/Neighbourhood scheme lot owner who must maintain their own property - inside and out - PLUS contribute to the upkeep of a (generally) small amount of Association Property.  And finally there's the Strata scheme lot owner who must contribute to the upkeep of a substantially larger amount of common property while maintaining just the INSIDE of the unit.

So what's the bottom line? The Neighbourhood scheme lot owner tends to be much closer to typical home ownership than the Strata scheme lot owner.  Which is better?  It depends on your situation, stage of life, financial position and point of view.

Please note also that both the Strata scheme lot owner AND the Community/Neighbourhood lot owner must comply with the rules (by-laws) of their schemes while typical home owners, usually, do not have any such requirements other than those set down by the local council for all rate payers.

Mix and match....

Community/Neighbourhood schemes can have a mix of plan types.  For example, part of an estate might contain a block of 20 units (which falls under the Strata plan banner), another part of the same estate might consist of 30 townhouses that share just a common roadway and some landscaping (a Neighbourhood plan) and the whole estate might have a common access driveway with a security gate and fence system (the Community plan).  In this example there'll be a multi-tiered management structure with one management 'group' looking after the unit block, another looking after the townhouses and yet another overlooking the entire estate.

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What are the types of Community/Neighbourhood Schemes?

Community and Neighbourhood schemes fall into 3 types which, in some ways, overlap each other - the main differences between them being what the scheme contains and what the developers of the plan can and can't do before, during and after the scheme has been built, the plan registered and the scheme made operational.  In general, Community and Neighbourhood plans are the most widely known and used.

The 3 types are:

  • Community plan
  • Precinct plan
  • Neighbourhood plan

Community Plan

A Community plan is necessary where the developer proposes to create a large staged development with a multi-tiered management structure.  The plan subdivides the original parcel of land to create Association Property and lots that are usually intended for future development.  Within a Community there can be Precincts, Neighbourhoods and Strata schemes.

Precinct Plan

A Precinct plan, like a Community plan, is necessary only where a development is developed in stages and requires a multi-tiered management structure.  It subdivides the community development lot (or lots) to create a precinct property and lots proposed for further development.

This structure is interposed between a Community plan and a Neighbourhood plan or Strata plans and adds yet another layer of complexity to the overall structure.  Precinct plans are not usually used since essentially the same result (with less development restrictions) can be achieved through the use of a combination of Community plans, Neighbourhood plans and Strata plans.

Neighbourhood Plan

A Neighbourhood plan is the most widely used plan within this system and may be used in tiered, stand-alone and staged developments.  In a tiered or staged development, a Neighbourhood plan can subdivide Community or Precinct development lots and can also contain a number of Strata plans within its structure.

NOTE - Basically the differences between the types are primarily to assist developers structure their developments (and the associated Management Statements) in such a way as to allow them to continue the future development of the parcel(s) of land without unfair, complex and costly restrictions.  All this would appear to have little affect on the individual lot owner in a community-type scheme..
TIP - You can read a bit more about the differences between the types of community schemes at the NSW Land and Property Information's Registrar General's Directions website in the section on Community Schemes Section - Types of Community Scheme Plans

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Upon registration

Each time a Community, Precinct or Neighbourhood plan is registered:

  • lots are created
  • association property is created
  • an association is formed

Association Property

The NSW Community Land Development Act 1969 allows for certain land in a Community scheme to be owned jointly by all the lot owners in the scheme.  This certain land is known as the Association Property and is essentially everything that's shared by all the lot owners.  Association Property in a Community scheme is essentially the equivalent of Common Property in a Strata scheme.  Read Part 3 - Association Property of the NSW Community Land Management Act 1989 for all the details.

The Association

The communal ownership of the Association property is achieved via an entity known as the Association and is formed as soon as the plan is registered.  The Association, comprising all of the scheme's lot owners, is very similar in structure and nature to the Owners Corporation in a Strata scheme.  Everything you need to know about the different Associations can be seen in Part 2 Division 1 - Sections 5 through 26 of the NSW Community Land Management Act 1989.

The 3 types of Associations are:

  • Community Associations
  • Precinct Associations
  • Neighbourhood Associations

In the eyes of the individual lot owner these 3 associations work in pretty much the same way with each one dictated by the by-laws contained in each particular scheme's Management Statement.  Please see the section on Management Statements below for more information on this vital document.

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The legislative differences

Even though a lot of the legislation for Community schemes overlaps with much of the Strata schemes legislation (due to the obvious similarities) there are some differences that those living (or thinking of living) in a Community or Neighbourhood scheme should be aware of.  What are those differences?  Please keep reading...............

There are a lot of terminology differences - like Association Property instead of Common Property, the S26 Certificate instead of the S184 Strata Information Certificate and the Community Association or Neighbourhood Association instead of the Owners Corporation - to name just a few.

While the NSW Strata Schemes Management legislation is, in most instances, very specific and exacting in the way it deals with the co-ordination, management and general running of Strata schemes, the NSW Community schemes legislation has deliberately been left very broad allowing total flexibility to be built into the scheme based on the individual requirements and theme of the Community or Neighbourhood.

This flexibility is very effectively handled via the Management Statement - the 'rule book' for every Community or Neighbourhood scheme - and the importance of the Management Statement cannot be stressed enough.

In essence though (and from an individual lot owner's viewpoint), the structures and functioning of both types of schemes are almost the same with any fundamental differences being well documented.  However, there's definitely a stronger dependence (and reliance) on the rules (i.e. by-laws) of Community/Neighbourhood schemes - more so than there appears to be in Strata schemes.

This increased dependence stems from the fact that Community and Neighbourhood schemes can be so varied in their structure and use (which can make the rules quite involved and complex) when compared to the relatively 'simplistic' nature of Strata schemes.

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Management Statements

A Management Statement is a document which sets out all the by-laws necessary for the efficient running of a Community/Neighbourhood scheme and MUST be lodged with every Community, Precinct or Neighbourhood PLAN.

Because the Community Titles legislation allows for so much variation, there are NO model by-laws for Community schemes.  It's felt there aren't enough common issues within Community schemes for model by-laws to be successful.  One example sited in the Community Schemes section on the NSW Land and Property Information's Registrar General's website regarding this situation states:

"The management provisions required for the effective administration of, for example, a retirement village, may be different to those applying to a tourist development, business park or rural farming development"

What's covered?

In most Management Statements, there'll usually be particular by-laws relating to:

  • keeping of animals
  • noise control
  • garbage collection
  • drying of laundry
  • restrictions on the use of and access to facilities
  • details on exclusive use of facilities
  • visitor and/or disabled parking
  • association meetings
  • The controlling Committees
  • insurance
  • traffic and parking laws
  • other matters regarded as important in the running of the scheme

Some of the more exotic types of schemes, such as holiday resorts, hotels, caravan parks and the like may have quite an extensive set of very different by-laws due to the very nature of these schemes.

NOTE - it wouldn't be at all surprising for you to know that many Community schemes use the model by-laws available for the various types of Strata schemes as a guideline for the drafting of a Community scheme's actual by-laws.  Many standard by-laws are then changed with any extra 'special' by-laws being added as needed.

It would be highly unlikely for any 2 Management Statements to be exactly alike (unless of course they were purposely copied word-for-word)

To learn more about the model by-laws for Strata schemes read the By-laws information page.

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More detailed information...

A wonderfully detailed section on Management Statements can be found on the NSW Land and Property Information's Registrar General's Directions website in an area within the Community Schemes section titled Preparing the Plan - Management Statement

There's even sub-sections on preparing the Management Statement detailing things that must be included, various restrictions and so on.  Make sure you don't miss these.  For these lists see Management Statement.  At the very least, this is a wonderful starting point for anyone involved in the setting or amending of a Community scheme's by-laws.  Just look at the left side menu items (in red) for all the juicy topics.

Changing Management Statements

Now, we are all faced with change every day of our lives and Management Statements can and will be changed at some time.  So, when you are faced with having to make some changes to your Management Statement, the appropriate forms will need to be used (no surprises here...)  Below is the main one you'll need along with instructions on what to do plus a short guideline.

NSW LPI Community Scheme Management Statement Changes

Special provisions for Strata Schemes in Community Schemes

Community schemes deal with by-laws and some other items in a very different manner to Strata schemes so if a Strata Scheme happens to be within a Community Scheme, the Strata Schemes Management Act 2015 makes reference to a couple of special provisions for this situation.

To cut a long story short - essentially it's about how the Management Statement overrides any by-laws in place.  (See Section 139 - Restrictions on by-laws: Part 7).  AND how there must be EXTRA information on the S184 Strata Information Certificate.  (See Section 184 - strata information certificate: Part 5).  AND how the tenant's of a strata scheme WITHIN a Community scheme do NOT need to be sent the strata scheme's by-laws.  (See Section 186 Part 3 - Provision of strata scheme information to tenants).

Therefore, if you happen to live in a Strata Scheme that IS part of a Community Scheme or you intend to buy into one, you should familiarise yourself with these provisions by following the links just above.

NOTE - There's actually very little information on Community schemes in the latest legislation brought down on Nov 30th, 2016.  This might change over time especially when the Community legislation is reviewed but, for now, we have to make do with what's there

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Initial Period

The term 'Initial Period' is almost the same for both Strata schemes and Community schemes with the Community scheme version acting a little differently depending on the type of Community scheme involved.

To save going into too much detail regarding Community Scheme Initial Periods here, you can find out pretty much all you need to know in the NSW Fair Trading's publication called Living in a Community Scheme.  The section on the Initial Period begins around page 4.  It's good stuff.

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Community Search

In a Strata scheme there's something called a Strata Search which is officially known as an 'Inspection of the Records and Accounts under Section 182 of the Act'.  In a Community scheme there's the 'Inspection of the Records and Accounts under Section 26 of the Act' and while this could be known as a Community Search, I don't think it is - well not officially anyway.  These two are almost the same except for a few differences in the information provided.  Schedule 4 of the NSW Community Land Management Act 1989 details what's required.

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Extra information resources

The 1st link will take you to the NSW Fair Trading website and the excellent PDF booklet titled "Living in a Community Scheme".  This is written in clear, simple terms and provides just about everything on the 'need to know' scale regarding Community schemes.  Definitely read this one thoroughly.

The 2nd link will direct you to the NSW Civil & Administrative Tribunal (NCAT) webpage on dealing with disputes.  This government department uses pretty much the same information for Community schemes as it does for Strata schemes since a dispute is still a dispute no matter what type of scheme it originates from.

The 3rd link of the 3 in the Information pages, booklets and publications section below takes you to a very comprehensive and relatively easy-to-read section on the Registrar General's Directions division of the NSW Land and Property Information website which covers everything you should know involving Community schemes.  While it's primarily aimed at those wanting to develop Community schemes (with some very specific sections for developers) it also provides the A-Z on how Community schemes should be managed and run with lots of detail on what's required to get it done.  A very useful reference - if you follow the menu items listed on the left in red on the page.

TIP - You can read more on how to handle disputes by having a look at my Resolving Disputes information page.

The other 2 sections in the 'extra information resources' section provide a number of links to the main legislative sections which deal specifically with Community schemes.

Information pages, booklets, publications

NSW Community Schemes legislation references

Strata Title Terms and Jargon


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DISCLAIMER:  All information on this website is of a general nature and is intended as a guide only.  Readers should check all information obtained from this website for accuracy from other sources and seek professional legal advice before taking any action based on any information obtained from this website.  Information on this website should not be substituted for proper legal advice.  The owners of this website will not be held responsible for any action taken as a consequence of same.

EXTERNAL SOURCES:  The owners of this website do not make any warranty or representations regarding the information, products, services provided by or qualifications of any external sources listed on this website.  Readers should make their own appropriate enquiries regarding accuracy, qualifications, licences, etc.  The owners of this website will not be responsible or liable in any way for any representations made by any external sources listed on this website.

IMPORTANT NOTE:  This website deals with strata matters in NSW, Australia only.  Legislation varies in different states and territories and in other countries.  For information pertaining to places outside of NSW, Australia please refer to the appropriate legislation for your region.



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