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Key Documents and Terms

Key documents

Owners and prospective buyers of a community title property should be aware of four documents which are associated with the title. The Plan and the By-Laws must be lodged with the Land Titles Office (LTO). If there is a scheme description and a development contract then those documents must also be lodged with the LTO. These documents may be attached to the contract of sale but can also be purchased from the LTO for a fee.

The Plan

The plan identifies whether it is a community scheme or a community strata scheme. There are significant differences between the two.

The plan divides the land into community lots and common property [Community Titles Act 1996 (SA) s 7(1)]. In a community strata scheme, the plan refers to strata lots and lot subsidiaries [ss 9, 19].

The plan will also show whether it covers a primary, secondary or tertiary scheme. Most residential properties are a primary scheme but properties with mixed uses may have two or even three schemes.

There may also be a development lot which may be divided at a later date to create additional lots [ss 6(2), 8]. Ideally the plan should show service infrastructure [ss 3, 14(5)(e)].

A community strata plan further divides the site by reference to the buildings on the land and must also have upper and lower boundaries (for instance, relating to the storeys of a building). A strata lot may also include a lot subsidiary which is an area either within the building or on land outside the building [s 19(3)(d)].

The plan also includes a schedule of Lot Entitlement [s 14(5)(i)].

The By-Laws

By-laws are the rules of the community corporation [ss 12, 34]. They provide for the administration of the common property but can also regulate the use and enjoyment and appearance of the community lots and the purposes for which a lot may be used. They are binding on the corporation, the owners and occupiers of the lots and persons (such as contractors and visitors) entering the property [s 43].

The Scheme Description

The scheme description gives the owner or prospective purchaser an overall view of how the scheme is to be developed and the end result. This document is optional for schemes of six lots or less that are used predominantly for residential purposes. This document must be lodged for commercial schemes, irrespective of the number of lots, or if the plan contains a development lot, or if the common property or a lot within the scheme is to be developed in a specific way.

The Development Contract

This is a contract entered into by the developer to develop a development lot, the common property and community lots in accordance with the scheme description and the by-laws [ss 47, 48]. The corporation or a lot owner may sue if the developer does not comply with the contract [s 49].

Important Terms

The Community Corporation

The owners of the lots (but not the owner of a development lot) are members of the community corporation. The owners of secondary lots are not members of the primary corporation and nor are owners of tertiary lots members of the secondary corporation.

The secondary or tertiary corporation is a member of the respective primary or secondary corporation [s 74]. The certificate of title for the common property is issued in the name of the community corporation. Among other functions the corporation is responsible for administering, maintaining and insuring the common property and for enforcing the by-laws and the development contract (if any) [s 75], and for enforcing the duty of maintenance and repair imposed upon the lot owners by the Act or the by-laws [s 101].

Lot entitlements

The lot entitlement of a lot in a community scheme is the proportion of the unimproved value of the lot to the aggregate value of the lots. It is expressed as a whole number. If the value of the respective lots is 45%, 30.5% and 24.5% of the total then the entitlements may be expressed as 90, 61, and 49 out of 200 [s 20(1)-(4)].

In the case of a community strata scheme lot the value will be taken to include the value of the part of the building containing or comprising the lot without taking into account the value of the fixtures and other improvements.

Key Documents and Terms  :  Last Revised: Wed Sep 5th 2018
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