Overview

Community title and strata title both describe property divided into individual lots that share common areas of the property and may share services.

Community title is far more complicated than strata title and can impose a greater financial burden on the lot owner. It was developed to deal with the growing complexity of multi-dwelling structures. Some schemes are so big that they even have their own postcode! One example of a famous community title scheme in NSW is Breakfast Point which is located in the heart of Sydney. This complexity makes it very important to understand the differences between the collective responsibility of all lot owners and your individual responsibility.

Sometimes you can have multiple strata plans and neighbourhood plans within one community scheme. Examples of community schemes include:

• gated communities,
• rural subdivisions,
• residential/commercial resorts, and
• retirement villages.

Each state and territory in Australia has its own legislation governing the area of community title and the law can be quite complex. For example if you own an apartment within a community scheme it is covered by strata or unit title laws as well as community title legislation. In a typical community scheme there can be many level. These are also called tiered or subsidiary schemes. The laws about who is responsible for what can be difficult to interpret as many different rules apply. For example if you own an apartment within a community scheme:

• under basic property law you are individually responsible for everything inside your lot. This is known as your air space;
• under strata title law you are a member of the owners corporation which is responsible for everything outside your lot such as the external walls, hallways, driveways, garages and other ‘common areas’ or ‘common property’;
• under community title law you are also part of an association that is collectively responsible for all common areas in the community. This is called ‘association property’ and may include:
  • roads,
  • garbage areas,
  • pools,
  • gyms,
  • club house,
  • tennis courts,
  • parks and gardens.

While there may be many benefits to living in a community title such as the shared cost of expensive facilities like a pool or gym it is important to remember that a community scheme is not suitable for everyone. It can bring with it lots of restrictions, obligations and social and legal complications. You need to fully understand your obligations and responsibilities before purchasing into a community scheme so you can decide if it is the right choice for you. Even if you are purchasing an investment property you will still need to ensure that your tenants are informed of and follow any by-laws (rules) and abide by the management statement of the scheme.

Our Legal Guide on Community Title gives a general overview of relevant laws based on the position in NSW at the time of writing. Most other states and territories have similar laws. Before making important decisions it is advisable to obtain legal advice specific to your situation. LegalEagle’s free directory profiles all lawyers in Australia. You can use it to Find a Lawyer near you who specialises in the area of Community Title.

How a lawyer can help?

There are three main areas where a specialist property lawyer can help with issues relating to community title.

Before you purchase: It is essential that you understand your legal obligations and responsibilities before purchasing a property in a community scheme. Since this area of law is quite complex you should speak to a specialist property lawyer before you enter into a contract of sale. A lawyer can:

• help you understand the obligations and responsibilities that come with living in the particular community scheme including any restrictions that by-laws or a management statement may impose; and
• obtain past records of the avssociation to identify whether there are management or maintenance issues or concerns about the property, building or community you are interested in. There is usually a fee for producing this information but it is a small price to pay for valuable information that may save you a lot more in the long run.

Purchasers may not realise that by purchasing into a community scheme you automatically become part of a body called an ‘association.’ A specialist lawyer will be able to explain to you your role in the association. They can also explain how the 'management statement' regulates the operation of the community. Generally speaking the association of a community title scheme is responsible for looking after the

• gardens,
• garbage and
• infrastructure including roads.

Maintaining these facilities and ensuring the community runs smoothly requires money. All lot owners must contribute through levies towards the maintenance and upkeep of the community. There are also legal obligations on the association to take out certain insurances and ensure that all association property is in a proper state of repair. A lawyer can help you understand how your levies are calculated and how the money will be used.

When a dispute arises: disputes are inevitable in a shared living environment. Most common disputes arise over petty matters that can be easily resolved through communication such as:

• excessive noise,
• garbage,
• keeping pets and
• parking issues.

Usually the best way to resolve a dispute is through communication. Unfortunately in large schemes it can be difficult to communicate with a person that you

• may not  know,
• cannot identify, or
• feel intimated by.

The law provides for alternative methods of dispute resolution that can be undertaken such as mediation. Mediation is a process where a trained, independent person will ask each party to tell their story and guide you towards a shared understanding where you can hopefully reach an agreement that everyone can live with. While you are encouraged not to bring lawyers into the mediation it is good practice to seek legal advice before commencing the mediation process. This will give you a clear idea of your rights and responsibilities and help you clarify what you want to achieve. If the problem is not resolved at mediation you can progress to adjudication and then to a tribunal or court in your state or territory. For more serious matters it is wise to seek legal advice before taking any action. Good legal advice can prevent minor disputes from escalating into complex issues requiring hearing at a tribunal or court.

For management issues or for associations: A specialist property lawyer can assist with untangling the interaction of community title and strata title laws to answer difficult questions about rights and responsibilities. You can seek out legal advice if you are worried about how your scheme is operating. If you want general advice about a matter you can always obtain it for free at your local community legal centre. For advice that is specific to your situation you can look for a specialist property lawyer near you in our free Find a Lawyer directory.

Associations should always seek legal advice for legal issues including:

• drafting changes to by-laws;
• entering into contracts and agreements with third parties such as
  • private garbage collection companies,
  • landscapers,
  • window cleaners,
  • cleaners;
• insurance matters such as building defects; and
• litigation or any contemplated legal action.