You've discovered your ideal home, but now you learn it's part of a community scheme or neighbourhood scheme. What exactly does this mean? In this article, let's delve into what these schemes entail and how they may differ from traditional home ownership or strata schemes.
What Are Community Schemes?
Community schemes offer a unique approach to property ownership, particularly in developments with shared amenities and facilities. In simple terms, these schemes allow lot owners to own and maintain their individual buildings while sharing the use and maintenance costs of communal facilities like gyms, swimming pools, club houses, marina or even a golf course. This arrangement is ideal for developments such as gated estates, retirement villages, or resort-style communities.
Often, in a new land release, the entire development will be incorporated into a community title scheme, allowing the developer to implement a master plan for the entire area. Examples of such developments in Sydney include Breakfast Point, Huntleys Cove, and Wentworth Point.
Types of Community Schemes
Community schemes come in various forms, each catering to different development structures and lifestyles. The three primary types include:
Community Scheme: Suitable for large-scale developments with multi-tiered management structures, including precincts and neighbourhoods.
Precinct Scheme: Used for staged developments where different sections of the community are developed over time, allowing for flexibility in planning and management.
Neighbourhood Scheme: Commonly consisting of freestanding houses or terrace-style homes with minimal shared property, such as a driveway. This type offers a balance between individual home ownership and shared community living.
In New South Wales (NSW), the law allows for a three-tier management structure. This means that a community title scheme may comprise a Community Association, along with precinct and Neighbourhood Associations, each with its own management structure and decision-making authority limits. Typically, the Community Association serves as the highest tier in a community title scheme, with its management statement establishing the fundamental regulations for the entire scheme.
For example, under a Community Association, there may be neighbourhood schemes that free-standing homes are part of. There may be another group of strata schemes that make up a precinct and be part of a Precinct Association that is also part of the Community Association. The Community may have access to shared facilities such as a club house, meeting rooms, pools that are maintained by the Community Association.
Key Differences from Strata Schemes
While community schemes share similarities with strata schemes, there are notable differences, particularly in maintenance responsibilities and management structures. In a strata scheme, owners are typically responsible for maintaining the interior of their units and contributing to the upkeep of common property. In contrast, community scheme owners may have broader maintenance obligations, including the upkeep of their entire property and shared facilities.
Community Schemes are governed by different sets of legislation, namely the Community Land Management Act 2021 and Community Land Development Act 2021 and associated Regulations. These legislation were updated to align to the Strata Schemes Management Act 2015 and Strata Schemes Development Act 2015, ensuring consistency and between strata and community title schemes.
Your Obligations
When you purchase a property within a community, precinct, or neighbourhood scheme, you automatically become a member of the scheme's association, typically established by the builder or developer. The association's primary purpose is to oversee the maintenance of association property and its associated costs, as well as to enforce rules governing life within the scheme.
As a member, you have the right to attend and vote at general meetings, including the annual general meeting (AGM), where decisions regarding the scheme are made. Financial contributions, which cover expenses such as maintenance and repairs, are required from all members and may include regular contribution levies, special levies for unforeseen expenses, and funds for administrative and capital works purposes. Failure to pay contributions may result in interest charges and potential legal action by the association.
Each scheme has its own set of by-laws governing behaviour and property use, which can vary widely and must be adhered to by all residents, tenants, and visitors. Breaches of by-laws may result in penalties issued by the association or, in severe cases, legal action. The association is responsible for maintaining communal property, while individual members are responsible for maintaining their own lots.
Understanding Community Management Statements
Central to the operation of community schemes are Community Management Statements, equivalent to by-laws in a strata scheme, which outline the rules and responsibilities governing the scheme. These statements cover a range of topics, from pet ownership and noise control to architectural standards and facility usage. Unlike strata schemes, there are no model by-laws for community schemes, allowing for tailored management approaches suited to each development.
A management statement will often incorporate architectural guidelines detailing approved construction styles, fencing, and colour schemes permissible within the development to ensure the look and feel of the community is maintained. These architectural guidelines are often detailed, specifying approved paint shades and providing comprehensive instructions. If you violate these guidelines, such as by altering your roof to an unapproved colour or material, such as tiles instead of slate, you may be required to rectify the issue at your own expense.
Embracing Community Living
Despite their complexities, community and neighbourhood schemes offer unique opportunities for residents to enjoy shared amenities and a sense of community spirit. Reach out to us at Compass Strata for expert advice and assistance in navigating the intricacies of community schemes. From understanding Community Management Statements to resolving disputes, our team is here to support you every step of the way. Embrace the benefits of community living with confidence and clarity – contact us today!
