Key features of community schemes
Each community titles scheme in a community scheme will have its own community corporation which is established when the scheme documents to create a community titles scheme are registered.
The community corporation is the body corporate that manages the scheme by-laws, common property and finances of the community titles scheme. More on community corporations.
The tier 1 community corporation comprises:
- The owners of the tier 1 lots.
- The community corporations of any tier 2 schemes.
The tier 2 community corporation comprises:
- The owners of any tier 2 lots in the tier 2 scheme.
- The community corporations of any tier 3 schemes that belong to that tier 2 scheme.
A tier 3 community corporation only comprises:
- The lot owners in the tier 3 scheme.
A lot or common property is in or belongs to the community titles scheme under which it is created. A tier 2 scheme belongs to the tier 1 scheme from which it was created, and a tier 3 scheme belongs to the tier 2 scheme from which it was created.
A community titles scheme is related to each community titles scheme to which it belongs or that belongs to it, and the community corporations are related in the same way. This means that a tier 2 scheme is related to the tier 1 scheme, which it belongs to, and the tier 3 scheme that belongs to it. See understanding community schemes for more.
Unit entitlement (UE) is a measure of the value of a lot or tier parcel in a community titles scheme in relation to the sum of the value of all the lots and tier parcels in the community titles scheme.
UE is an important aspect of the financial management of community corporations, as the UE attached to a lot or tier parcel in a community titles scheme determines:
- The contributions a member must pay to the community corporation (subject to scheme by-laws).
- The voting rights on resolutions of the community corporation.
- The lot owner’s share in the ownership of the common property.
The common property in a community titles scheme is any part of the land in the scheme that is not part of a lot. It also includes temporary common property.
Every lot owner in a community titles scheme owns a share of the common property in their scheme as tenant in common with the other lot owners. A lot owner’s share in common property is defined by the relative unit entitlement of their lot.
Lot owners in tier 2 or tier 3 schemes also own a share of the common property in the schemes to which their scheme belongs. For example, an owner in a tier 3 community titles scheme which is part of a three-tier community scheme will own a share in the:
- Common property in their tier 3 scheme.
- Common property of the tier 2 scheme to which their tier 3 scheme belongs.
- Common property in the tier 1 scheme to which the tier 2 scheme belongs.
All owners and occupiers of land in the tier 3 scheme have a right to use the common property in the schemes to which they belong, subject to restrictions in scheme by-laws.
The community corporation is responsible for controlling and managing the common property in the community titles scheme for the benefit of:
- The members of the community corporation.
- And if there are other community titles schemes that belong to the community titles scheme, the members of those other community corporations.