Community Title
7. Associations
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 07 Jul 2015
- The group of all owners in a community, neighbourhood or precinct scheme is called an association.
- An association is formed automatically upon the registration of a precinct, community or neighbourhood plan. Common property also comes into existence and vests in the association. That means it is owned collectively by all of the lot owners.
- Common property is called associate property in community, neighbourhood and precinct schemes to distinguish it from common property in strata and unit title schemes.
- When a plan is registered in NSW an initial period begins. It ends:
- when one-third of the unit entitlements have been sold for neighbourhood and strata schemes; and
- when one-third of the total unit entitlements are changed to either neighbourhood or strata schemes for precinct and community schemes.
- During the initial period numerous restrictions are imposed on an association. For example an association cannot:
- add, amend or remove by-laws that do not give a right or obligation to all lots;
- borrow or lend money; or
- incur debts that have not been accounted for in advance.
- Community associations, precinct associations and neighbourhood associations each essentially work in the same way. Each is regulated through a ‘management statement’.
- Since most community schemes are tiered and contain multiple subsidiary schemes within them it is important to understand that each subsidiary scheme will have its own common or association property and may have its own by-laws in addition to the by-laws if the higher level schemes.
- Members of lower subsidiary schemes generally have access and permission to use the property of higher schemes.
- Associations are run in a very similar manner to owner’s corporations in strata schemes with meetings being held as and when required to deal with decision making.
- An association is responsible for many things including:
- keeping books and records of notices, meetings and correspondence;
- financial records and statements which must be kept for at least 5 years;
- updating and maintaining the community roll, precinct roll and neighbourhood roll as required;
- ensuring adequate insurance including:
- building;
- public liability;
- workers compensation; and
- voluntary workers;
- managing and maintaining appropriate trust funds through levies on association members.
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