Understanding community schemes
Community schemes were introduced to Western Australia on 30 June 2021 through the Community Titles Act 2018, delivering a new form of land tenure and subdivision to WA’s property sector.
A community scheme could come in the form of a multi-storey building or a large-scale land development, plus a wide range of other development types.
Previously, a single parcel of freehold land could only have one scheme attached to it (known as a strata titles scheme). A community scheme now allows this land to be subdivided in a way that can create multiple individual schemes (known as community titles schemes).
Through this multi-tier structure, community schemes can offer distinct capabilities across land use, shared infrastructure, governance arrangements and common property ownership.
It is through these distinctions that community schemes present an important land tenure alternative to strata titles for property developers and investors, as well as future owners and tenants.
The most distinctive features of community schemes
1. The defining feature of a community scheme is that it allows a single parcel of freehold land to be subdivided into up to three tiers of schemes, called community titles schemes.
This multi-tiered structure supports unparalleled flexibility and customisation in the planning and management of new mixed-use developments in Western Australia. It also allows for a diverse range of other development outcomes to be successfully met within one overarching scheme.
2. Unlike strata titles, community titles allow both building and land schemes to exist within a single development.
This unique feature delivers additional flexibility and strategic opportunity within the management and staging of new developments. For example, building scheme lots could be sold as apartments, while land scheme lots could be sold as vacant land.
3. A fair and targeted approach to common property, where people only contribute to the aspects of the development they use.
Some common property can belong to all the owners of lots in the community scheme, while other common property can be solely owned by the lot owners of the subsidiary schemes (the community titles schemes).
This is an appealing feature of community schemes for future owners and tenants, as it enables common property to be more clearly allocated through a ‘user-pays model’.
4. Smart scheme governance happens when the right people are making the right decisions – community schemes have been designed with this in mind.
They support smart governance arrangements by providing for the most efficient, appropriate decision-making to occur across the multiple tiers of a community scheme.
The community scheme and each of its subsidiary schemes (the community titles schemes) have their own community corporation (much like a strata company) and by-laws.