Leasehold strata is a leasehold system of land tenure, providing the right to use land under a strata lease for a term of no less than 20 and up to 99 years. The leasehold strata option has been available in other places, such as the UK, Singapore and NSW for some time and has been available in WA since 1 May 2020, following strata titles law reform.
Leasehold schemes behave in much the same way as other strata titles schemes. Each owner of a lot will have a certificate of title for the leasehold interest in the lot and the lot’s share (as tenant in common) in any common property of the scheme.
A difference between a strata titles scheme for a strata or survey-strata scheme and a leasehold scheme is that in the former the certificate of title for the parcel of land the subject of the scheme is cancelled when the scheme is registered and strata titles issued for the lots. In a leasehold scheme the owner of the parcel of land the subject of the scheme (owner of the leasehold scheme) is the owner of the reversionary interest in the land. The owner of the leasehold scheme is the lessor and the owner of a lot in the scheme is the lessee under the strata lease for the lot.
Another key difference is that upon the expiry day for a leasehold scheme the scheme, lots and strata leases are terminated and cease to exist. The owner of the leasehold scheme regains full ownership of the land and buildings.
Role of the owner (lessor) of the leasehold scheme
The lessor will be involved in:
- Providing approval to the lessee to carry out structural alterations, erections, or extensions on the lot.
- Providing consent before an amendment of the scheme plan can be lodged for registration (for example, re-subdivision or consolidation of lots or common property).
- Providing written consent to making. amendment or repeal of leasehold by-laws that provide for postponement of the expiry day for the scheme or for compensation to owners of lots for improvements made by them to their lots.
The lessor will not be involved in:
- Management of a leasehold scheme.
- Transfer of leasehold strata lots – which can be done without the lessor’s consent.
- Payment of rates and land tax for the lots. The obligation is on the owner of the leasehold lot to pay these while the leasehold scheme exists.
What happens upon expiry of a leasehold scheme?
Typically, upon expiry of the leasehold scheme the scheme, lots and strata leases will cease to exist. The owner of the leasehold scheme (lessor) will regain full ownership of the land and buildings.
The expiry day for a leasehold scheme can only be postponed if the scheme has leasehold by-laws that provide for postponement of the expiry day of the scheme. Leasehold by-laws are classified as governance by-laws and they can only be created with the written consent of the owner of the leasehold scheme.
If these by-laws are in place, a resolution of the strata company where the votes in favour must equal not less than 75% of the number of lots in the scheme must be passed not later than 6 months before the expiry day to postpone the expiry day of the scheme, and it cannot be postponed to a day more than 99 years after registration of the scheme.
Approval by the Western Australian Planning Commission is also required to make, amend or repeal leasehold by-laws that provide for postponement of the expiry day. As soon as practicable after passing the resolution to postpone the expiry day, the strata company must serve notice on the owner of the leasehold scheme (using an approved form) and apply to the Registrar of Titles at Landgate for registration of an amendment of the scheme notice to give effect to the postponement.
Leasehold strata forms
We provide forms approved by the Registrar of Titles for registration or recording of a wide range of title matters in WA under the Transfer of Land Act 1893, Strata Titles Act 1985 (including leasehold strata) and Community Titles Act 2018. If you wish to apply for approval of a leasehold scheme, amend a scheme for registration of leasehold by-laws or to give effect to postponement of the expiry day, or to serve notice of expiry of the scheme, you will find all the forms you need, along with links to useful guides on our strata forms page.