Background
The Community Titles Act 2018 (WA) (CT Act) was assented to on 19 November 2018. The majority of the CT Act is yet not “in force” but we expect it soon will be following the commencement on 18 June 2021 of the Community Titles Regulations 2021 (WA).
The CT Act introduces a new form of land tenure to Western Australia providing for the:
- subdivision of land as a “Community Scheme”;
- creation of “Community Titles”; and
- the governance of Community Schemes.
Tiered approach
The introduction of “Community Schemes” in Western Australia whilst perhaps adding some complexity should create distinct benefits for property developers, buyers, owners and financiers by allowing a single parcel of freehold land to be subdivided up to three times by separate Community Title which is distinct from the Strata Titles Act 1985 (WA) which only allows for one scheme to be created for each single parcel of land.
Each tier in a “Community Scheme” can include Common Property in which some other of the Schemes within the Community Scheme have an interest:
- “Tier 3” Schemes will have an interest in the “Tier 3”, “Tier 2” and “Tier 1” Common Property;
- “Tier 2” Schemes will have an interest in the “Tier 2” and “Tier 1” Common Property; and
- "Tier 1” Schemes will have an interest in the “Tier 1” Common Property.
On the registration of each “Community Titles Scheme” with Landgate, a new statutory body known as a “Community Corporation” will be created which must administer the Common Property of that “Community Titles Scheme”.
A Tier 1 Community Corporation comprises the Owners of any Tier 1 Lot that has not been re-subdivided and the Community Corporation of any Tier 2 Scheme.
A Tier 2 Community Corporation comprises the Owners of any Tier 2 Lot that has not been re-subdivided and the Community Corporation of any Tier 3 Scheme.
A Tier 3 Community Corporation comprises the Owners of Tier 3 Lots.
Interestingly, the Tier 3 Community Corporation has an interest in the Tier 1 Common Property, but the Tier 1 Community Corporation has no interest in the Tier 3 Common Property.
Similarly, the Tier 3 Community Corporation will be represented at the Tier 1 Community Corporation by its inclusion in the Tier 2 Community Corporation but the Tier 1 Community Corporation is not represented in the Tier 3 Community Corporation.
Questions raised
The above discussion raises at least the following questions:
- what are the voting and representation rights at each “Tier; and
- can you have more than one Tier 2 Corporation, for example, a Residential Corporation and a Commercial Corporation?
Dentons has a wealth of knowledge and experience in relation to the development, planning, construction, utilisation and management of land including its subdivision and the creation, governance and operation of strata titles schemes and an unmatched capacity to advise about and help by providing timely, objective and effective solutions. The above two questions must be among a myriad of questions about the introduction of Community Titles in Western Australia.
