We outline the new community titles tenure in Western Australia, the considerations for developers, and provide a Quick Reference Guide to published materials.
The Community Titles Act 2018 came into effect on 30 June 2021, introducing community titles as a new form of tenure in Western Australia.
It is anticipated that community schemes will improve the design and delivery of mixed-use developments.
The WAPC needs to be satisfied that a community scheme is the most appropriate form of tenure before it can approve the development.
The Community Titles Act 2018 (WA) came into effect on 30 June 2021, introducing community titles as a new form of land tenure in Western Australia. A community scheme enables the subdivision of a parcel of freehold land into multiple schemes. Community schemes already exist in New South Wales, South Australia and Queensland.
The unique tiered structure of a community scheme allows a more flexible approach to the subdivision and development of land. This is especially for mixed-use developments with retail, commercial, office, residential and recreational components, or for staged land developments with common facilities and infrastructure.
What is a community scheme?
A community scheme is an opt-in form of land tenure for land in Western Australia. It means that land can be subdivided by a community scheme if it is freehold land, comprised wholly within a parcel, and is not already subdivided by a strata title scheme.
Community schemes will provide for well planned, larger-scale land subdivision and development projects. They will enable a single freehold parcel of land to be subdivided into two or more schemes, which all fall under the single umbrella community scheme.
What are the features of a community scheme?
- Multiple schemes are permitted on a single parcel of land, which are all linked to the single umbrella community scheme. This unlocks new development opportunities by providing flexibility and customisation in the planning, development and management of mixed-use developments. It also places management responsibility (and the costs) for common infrastructure and areas with the lot owners who use and enjoy it.
- A community scheme may be subdivided vertically into no more than three tiers of lots and schemes, or horizontally by any number of lots and schemes that sit side-by-side. All lot owners in a scheme have a share, or entitlement, in that scheme. All lot holders (either directly, or through a scheme) have a share, or entitlement in the umbrella community scheme.
- Both building (similar to a strata scheme) and land (similar to a survey-strata scheme) community titles schemes can exist within a community scheme. Lots in the land scheme can be sold as vacant land, or further subdivided as a building scheme. Lots in the building scheme can be sold as apartments, or further subdivided as a building scheme.
- The ability to create separate schemes allows for a fairer approach to the use and repair of common property, and contributions to costs. Some common property can belong to, and be used by, everyone in the community scheme (e.g. embedded solar network and rainwater/wastewater treatment), while some common property may only be owned and used by the lot owners of one of the subsidiary schemes (e.g. lift in a separate building).
- Community titles support efficient decision-making and a degree of autonomy. The community scheme (and each subsidiary scheme) has its own community corporation and by-laws. The lot owners impacted by an issue will have control of the decision making in relation to the issue.
When will the WAPC approve a community scheme?
Western Australian Planning Commission (WAPC) approval is required to a community scheme. Land cannot be subdivided by a community scheme, unless the WAPC determines that a community scheme is the most appropriate form of subdivision. This is when compared with any other form of subdivision, such as green title, strata or survey-strata.
The WAPC must also approve a community development statement (CDS). This is a statement prepared by the developer that sets out the proposed land use, subdivision stages, number of proposed lots and tiers, whether land and/or building schemes are proposed, and development controls.
The WAPC's Draft Operational Policy 1.11 sets out a number of policy measures in regard to assessing whether a community scheme is the most appropriate form of subdivision. These include that it is in accordance with the relevant planning scheme and WAPC's policies (especially relating to roads, public open space and residential design), and whether it is consistent with long-term planning goals for the locality.
What types of developments are suited to community schemes?
Community titles (land) schemes will allow for large-scale staged land developments, with shared infrastructure and services, without the need for complex easement arrangements and contracts.
Community titles (building) schemes will facilitate a mix of uses in one or more buildings on a parcel of land (e.g. retail, hotel and residential).
Examples of developments that may be suited to community titles include:
- Mixed land and building subdivision: Community titles (land) schemes and community titles (building) schemes can be used to deliver diverse built form products (e.g. apartments, freestanding homes, townhouses and vacant lots) catering to all buyer preferences. The developer will have the ability to stage the delivery and development of subsequent stages (schemes) to maximise return on investment.
- Single building with mixed uses: Community titles can be used to improve the delivery of contemporary mixed-use developments, This means different use types can co-exist through a smart subdivision and governance structure, which allows each to manage their own affairs. The structure ensures all owners have responsibility for maintaining the fabric of the building as tier 1 common property. This allows tier 2 and tier 3 schemes to manage the common property that only they use, without the need for complex legal arrangements.
- Multiple buildings with shared common property: Community titles can be used to create shared facilities, which will appeal to buyers seeking a wide range of amenities close to their home or work (e.g. shopping outlet, gym, swimming pool, community space). These amenities will exist as common property and maintenance costs will be shared across the whole scheme. Each of the buildings can then be subdivided by a community titles (building) scheme to create freestanding towers. This allows them to be autonomous in their day-to-day management, and each have their own common property.
Quick Reference Guide to published materials
We have prepared a Quick Reference Guide to help navigate the published materials, including descriptions of the documents and the relevant users.
Can a community scheme be used for developments underway?
- Existing strata or survey-strata scheme: An existing strata or survey-strata scheme cannot be 'converted' to a community scheme. The strata or survey-strata scheme will need to be terminated and a new community scheme approved (by the WAPC) and registered over the parcel of land. The recent amendments to the Strata Titles Act 1985 (WA) that came into effect in 2020 amended the termination provisions, to provide alternative ways in which a strata or survey-strata scheme can be terminated.
- New development: For any new development (pre-construction or currently under construction), the developer will need to consider whether a community scheme is likely to be the most appropriate form of tenure for the development.
If it may be, the developer will also need to consider if it has already entered into any 'off the plan' contracts. In this case, it will need to consider whether a change of tenure to community titles is permitted under the contracts, including any notifiable variations and buyer avoidance rights.