As defined by Fair Trading NSW, community, precinct and neighbourhood schemes are “forms of land title that help in subdividing and developing land with shared association property”.
Until last year, these schemes were covered by a piece of legislation known as the Community Land Management Act 1989 that was not always aligned with strata scheme laws. However, new legislation introduced on 1 December 2021 means that these laws and regulations are now in line with the Strata Schemes Management Act 2015 and Strata Schemes Development Act 2015.
In essence, this will provide more consistency than before, while still allowing for differences and distinctions between strata and community regulations. These reforms should ideally pave the way for more agile, flexible and modernised processes regarding the development of community schemes in NSW.
Community Land Management Act 2021 and Regulations
For those who want to investigate the gritty details for themselves, the 127 pages of the Community Land Management Act 2021 can be viewed in full at the NSW legislation website.
For those who want to understand how it will affect them, we’ve summarised of some of the key changes below.
Key changes to the Community Land Management Act 2021
Some of the most important changes brought into force by the Community Land Management Act 2021 are:
- A requirement that, in line with the Strata Schemes Management Act 2015, by-laws should not be considered “harsh, unconscionable or oppressive”;
- Higher penalties for breaches of by-laws;
- Increased flexibility regarding activities such as meetings and voting, permitting non-physical forms of participation including via video and teleconferencing, postal and electronic voting, and by secret ballot;
- The ability for a tenants’ representative to be appointed to a neighbourhood committee;
- Notifications of changes to an association’s by-laws must be provided to the Registrar General within six months, and not two months.
Key changes to the Community Land Development Act 2021
The changes brought about by the Community Land Development Act 2021 include:
- The definition of what the ‘initial period’ is has been simplified. If there is no exiting subsidiary scheme in a precinct or community scheme, this initial period will end once an occupational certificate has been issued. Otherwise, the initial period will end when one-third of a scheme’s total unit entitlement has been sold;
- The amalgamation process for subsidiary precinct/neighbourhood schemes with parent community schemes has been simplified;
- Alignment with the Strata Schemes Development Act 2015 will see community land developments become more flexible and transparent;
- Restrictions barring owners and associations from purchasing adjoining land to add to a community, precinct or neighbourhood scheme have been removed. This provides developers with the possibility of expanding their development’s size by adding properties to the community parcel in the future;
- A community scheme can now be terminated directly through the Registrar General’s office. A statement of intention regarding this must be made public at least 14 days prior to the application being submitted.
Key terminology changes over both Acts
There are a number of changes to specific terminology in both of these Acts, namely:
- The phrase ‘sinking fund’ should be replaced with ‘capital works fund’ in alignment with the Strata Schemes Management Act 2015;
- ‘Executive committees’ are now to be labelled ‘association committees’;
- A ‘caretaker’ should now instead be titled as a ‘building manager’.
If you’re still not sure about what these changes to the Act mean for your scheme, get in touch with a member of the experienced and knowledgeable Jamesons team. We offer a wide range of strata management services across property administration, complex strata and property issues, compliance, meetings and more.