What is Community Title?
If you have purchased property, you might have encountered the term ‘community title’ during the process. But what is a community title? What is a community titles scheme? And how does a community title differ from a strata title?
The property industry is teeming with complex jargon that can often confuse those living under its various titles and schemes. Within this article, Strata Data will clarify what a community title is, and what the title means for the property owner.
What Is a Community Title?
At the outset, it is probably important to clarify some terminology and provide some history. In 1996, the Community Titles Act came into force in South Australia. Prior to that, any development that had shared common areas was a Strata Title.
After 1996, when constructing a property with shared common areas, developers could only create Community Titles. However, they have two options of community titles available to them, depending on the nature of the scheme:
- Community Scheme, often referred to as a Community Land Scheme (where not multi-story)
- Community Strata Scheme (where multi-story)
So, there are now 3 types of schemes that have shared common areas, being Strata Schemes, Community Schemes, and Community Strata Schemes.
To make matters even more confusing, nowadays, when referring to Strata title/scheme, this often refers to Strata title/schemes as well as Community Strata title/schemes. So, the term Community title/scheme is often reserved for the Community Land Divisions.
A Community title, in a sense, is like a strata title, albeit lacking a number of the responsibilities that a strata title holds. Community titles also do not share some of the limitations that are attached to a development under strata title.
A community title is often used to maintain a high level of local amenities or services for the local residents. The title typically refers to larger estates featuring multiple lots. These lots may not all be residential and sometimes include retail and commercial outlets as well.
To make things even more confusing, community schemes can also include strata titled buildings. In this situation, the differing laws under strata and community schemes will both apply. Each community scheme varies by nature, and as a result, the applicable by-laws are less regimented compared to those in a strata scheme.
How is a Community Title Scheme Created?
A community title scheme is created by registering with the relevant authority in your state or territory. Similar to a strata scheme, a community title scheme is managed by the body corporate, which is all owners.
Within the registered borders of the community title, all the common areas like the roads, walkways, parklands, driveways, etc., are denoted as ‘Common Areas’. The entitlements of each unit are originally set based on the site value, and this determines the contributions to levies that go towards maintenance and insurance.
Managing Community Titles
Now that we’ve covered the answer to ‘what is a community title?’ The question remains – how do you manage one? In reality, managing a title of this nature is multifaceted. As a community title is predominately found in more significant developments and complexes, they typically cover much more land than strata titles.
Everything is managed in the community title through tabled meetings. The Committee deals with the day-to-day issues affecting the owners and residents, and general meetings are held for more prominent issues. These general meetings may be attended by all the lot owners.
Strata vs Community Titles: What Are the Main Differences?
Boundaries
The most significant difference between strata and community titles is how the boundaries of the properties are defined. Strata titles apply to buildings like apartment blocks, townhouses, and duplexes, and as such, the units are defined by their structural borders, like walls and ceilings. On the other hand, community titles can include several buildings and land simultaneously. In the community title, the boundaries are defined by the surveyed land.
Lots versus units
In Strata schemes, there are units, and in community title schemes such as gated estates and other large developments, there are lots.
Maintenance requirements
Community titles and strata titles are similar regarding maintenance within the property. Owners under both titles must pay levies for maintenance costs that are based on their lot/unit entitlement.
Insurance
Insurance forms the main difference between community titles and strata titles. On the one hand, community titles generally require no obligation on the unit owners to maintain and insure the other owners’ buildings. Each owner is responsible for their own insurance on the lot. The Body Corporate is often only responsible for insuring the common areas like driveways.
On the other hand, strata insurance is compulsory. It covers building and public liability insurance policies across all common property areas that are under the jurisdiction of the body corporate. The entire building structure is covered by strata insurance, and each unit owner is only responsible for the landlords or content’s insurance of their own unit.
Benefits of a Community Titled Property
Benefits of a community title include:
- Free use of any facilities like swimming pools, gardens, or recreational areas
- Increased say over the management of the shared facilities
- Uniform building and landscaping styles that can add value to your property
- All the common areas and associated facilities are covered by insurance
Limitations of Community Titles
There are significant benefits to a community title. However, like anything, it is not a perfect system, there are some disadvantages to this title. Any potential owner should be aware of the following before making their purchase:
- Possible standardised landscaping and building requirements can be restrictive and not suit the owners’ personal tastes.
- Generally, no part of your lot is covered under the insurance taken out by the Body Corporate.
Speak to the Experts at Strata Data
When it comes to an understanding of ‘what is a community title?’, or learning more about strata vs community titles, Strata Data is here to help developers and owners to understand the obligations of their buildings.
Offering both a strata management service as well as building management, we’re your premier choice for anything Strata in South Australia. For more information on how Strata Data can help manage your property or advice on strata or community title issues, get in touch with us today on 08 8372 2787 or online.
Please note: The legislation on holding insurance, and which entity is responsible for holding said insurance can vary. This article is a guide to this area of insurance only. Any advice in this article is general advice only and has been prepared without taking into account your objectives, financial situation or needs. Before making a decision to acquire any product(s) or to continue to hold any product we recommend that you consider whether it is appropriate for your circumstances.
