Your Rights and Roles as a Community Title Lot Owner

First, work out which kind of scheme you are in

Community title in South Australia is not one thing. The Community Titles Act 1996 covers two quite different living arrangements, and your rights differ depending on which one you bought into.

In a community strata scheme, lots sit above and below one another in a shared building, and the corporation insures and maintains that building. In a community scheme divided by a primary community plan, your lot is a defined piece of land, and the house standing on it is yours to maintain and, in most cases, yours to insure. Your certificate of title tells you which. Getting this wrong is expensive, because an owner who assumes the corporation insures their building when it does not is uninsured and does not know it.

Schemes can also be tiered. A primary scheme can be divided by a secondary plan, and a secondary lot by a tertiary plan. That matters for voting, as set out below.

If you are in a strata scheme under the Strata Titles Act 1988 rather than a community scheme, the companion article is Your Rights and Roles as a Strata Unit Owner. The two Acts are similar in shape and different in detail, and several of those details produce opposite results.

Membership is automatic: Section 74

Under Section 74, the owners of the community lots are the members of the corporation. There is nothing to sign and nothing to join. Membership arrives with settlement and ends when the new owner is registered on the title.

Two qualifications. The owner of a development lot is not a member. And in a tiered scheme, Section 74(2) makes the secondary or tertiary corporation the member of the corporation above it in respect of that lot. If you own a lot in a secondary scheme, you are a member of your own secondary corporation, and your interests at the primary corporation are exercised by that corporation rather than by you personally. Owners in tiered schemes are often surprised to find they have no direct vote at the primary level.

The by-laws bind you, and others besides: Section 43

Section 43 binds the corporation, the owners and occupiers of the community lots and any development lots, and anyone entering the community parcel. That last limb is broader than most owners expect: your visitors are bound by the by-laws too.

In a tiered scheme, the primary scheme by-laws also bind the secondary and tertiary corporations and their owners and occupiers. You can be bound by by-laws made by a corporation you are not a member of.

Section 44 gives you the right to inspect the by-laws free of charge and to buy a copy for no more than the prescribed fee. For what by-laws typically contain and how they are enforced, see our guide to by-laws for community corporations.

How voting works: Sections 84 and 87

One vote per lot, usually

Section 87 gives each community lot one vote where any lot in the scheme is used, or intended to be used, solely or predominantly for residential purposes. Where no lot is residential, the by-laws may prescribe a different number of votes per lot, and changing that number takes a unanimous resolution.

If co-owners cannot agree, nobody votes

This is the sharpest difference from strata. Under Section 84(7), if only one co-owner attends, that owner casts the vote. If two or more attend and they cannot agree who casts it, none of them is entitled to vote. The Strata Titles Act resolves the same deadlock by giving the vote to the first name on the certificate of title. The Community Titles Act does not. A disagreement in the room costs you the vote entirely.

Co-owners can head this off with a joint nomination under Section 84(4), made in writing to the secretary by all of the owners of the lot.

Nominations, not proxies

The Act calls it a nomination, and it is a formal instrument rather than a form handed over at the door. Under Section 84(5) it must be made by written notice to the secretary, and it must state whether the nominated person may vote at all meetings on all matters, or only at specified meetings or on specified matters. It may impose conditions. If a condition directs how the nominee votes on a matter in which you have a pecuniary interest, the nature of that interest must be disclosed. You may revoke it in writing at any time, and any agreement purporting to prevent revocation is unenforceable. It runs for twelve months unless a shorter period is specified.

Section 84(5a) is the trap. Failure to comply with any requirement of Section 84(5) invalidates the nomination. An informal proxy is not a proxy at all.

Two further protections. Where any lot is residential, the developer and the developer associates cannot be nominated (Section 84(8)). One exception matters: under Section 84(9) that bar does not apply where the community parcel is subject to a leaseback arrangement, and those are precisely the schemes in which a developer is most likely to retain influence. Check whether yours is before assuming the protection is there. And where a body corporate manager or an employee of one is nominated, the nomination ceases automatically when they stop acting for the corporation (Section 84(6a)).

Copies of every nomination applying to a meeting must be made available for inspection before any matter is voted on (Section 84(10a)). If you suspect the numbers are being assembled by proxy farming, ask to see them at the meeting, before the first vote.

Absentee votes

Section 84(11) lets you vote in writing on a proposed resolution by giving the secretary notice at least six hours before the meeting. It works only for resolutions already on the agenda, which is another reason the notice matters.

If you are behind on levies, you cannot vote

Section 84(14) is blunt: a vote cannot be exercised in relation to a lot unless all amounts payable to the corporation in respect of that lot have been paid. Note the difference from strata, where Section 34(7) of the Strata Titles Act preserves the unfinancial owner vote on unanimous resolutions. The Community Titles Act carries no such exception on its face. If a unanimous resolution matters to you, clear the arrears before the meeting.

Ties and ballots

A tied vote means the resolution is lost (Section 84(15)). Any member attending may demand a written ballot on any question (Section 84(12)), and the person presiding decides how it is conducted. A ballot is worth demanding where a show of hands is being read generously.

The developer cannot outvote everyone else

Section 87(3) caps the developer voting power, and the combined power of the developer and prescribed associates, at the total held by all other members of the corporation. In a partly sold scheme this is the provision that stops the developer running the corporation outright. There is no strata equivalent.

Meetings: Sections 81, 82 and 83

The annual general meeting of a primary community corporation must be held within three months after the start of each financial year (Section 82(1)). For a secondary or tertiary corporation the window is six months. This is tighter than strata, where the Act asks only for one meeting in each calendar year and no more than fifteen months since the last one.

A general meeting may be convened by the presiding officer, treasurer or secretary; by any two members of the management committee; by members holding 20 per cent or more of the total number of lots, or lots whose combined entitlement is 20 per cent or more of the aggregate; or by order of the Magistrates Court (Section 81(1)). The entitlement limb has no strata counterpart and can matter in schemes with unevenly sized lots.

Notice is at least fourteen days, in writing, to every member, and it must set out the agenda (Section 81(2) and (4)). The text of any special or unanimous resolution must appear in the notice. A member cannot nominate someone else to receive their notices in their place (Section 81(2a)).

Quorum is calculated differently from strata. Section 83(4) takes the number of persons entitled to attend and vote, divides by two, discards any fraction and adds one. If quorum fails, the meeting adjourns to a day between seven and fourteen days later, and at the adjourned meeting those who turn up constitute the quorum.

Insurance: who insures what

Section 103 requires the corporation to insure buildings and improvements on the common property and, in a strata scheme, the building or buildings divided by the strata plan, for the full cost of replacement. In a community scheme where your lot is a piece of land, the building on that land is not covered by Section 103.

Section 106 is where community lot owners are most often caught out. Where a building on a lot provides the support or shelter required by an easement under the Act, the owner of that lot must insure the building for full replacement cost, must give the corporation evidence of that insurance, and must give evidence to a requesting owner, prospective owner or mortgagee within five business days. The maximum penalty for failing to insure is $15,000.

The corporation must also insure itself against the risks a normally prudent person would insure against, with cover for bodily injury of at least $10 million (Section 104(2)), and, unless the Minister has granted an exemption, maintain fidelity guarantee insurance (Section 104(3)).

Section 108 gives owners, prospective owners, mortgagees and prospective mortgagees the right to inspect current policies, and the corporation has five business days to comply. In a tiered scheme, owners in a secondary or tertiary scheme can inspect the policies of the corporations above them. For what the policies actually cover, see our guide to insurance.

Information you can demand: Section 139

Section 139 is one of the strongest owner rights in the Act and one of the least used. On written application with the prescribed fee, the corporation has five business days to provide a statement of the contributions payable on the lot and any arrears, the assets and liabilities of the corporation, and expenditure it has incurred or resolved to incur; copies of general meeting and committee minutes for a period of up to two years that you specify; the last statement of accounts; and current insurance policies. It must also make available for inspection its accounting records, its minute books, the register of owners, and any contract it has with a body corporate manager.

Two features have no strata equivalent. Section 139(1a) lets any lot owner apply to receive the corporation bank statements quarterly on an ongoing basis, until they sell or revoke the request, unless a body corporate manager maintains the accounts. And Section 139(5) makes the statement conclusive evidence against the corporation of the matters in it, as at its date. If the corporation understates the arrears on a lot you are buying, it wears the difference.

Failure to comply carries a maximum penalty of $500, and the corporation cannot charge more than the prescribed fee.

When the corporation is being unreasonable: Sections 141 and 142

Section 141 sets out who may seek relief: the corporation, the owner or occupier of a community lot or development lot, a person who has contracted to purchase a lot, and any other person bound by the by-laws apart from visitors. A buyer under contract can act before settlement.

Section 142 sets out the grounds. A breach of the Act or of the by-laws. Prejudice to you as occupier of a lot by the wrongful act or default of the corporation, a delegate, the management committee, the developer, or the owner or occupier of another lot. A decision of the corporation, a delegate or the committee that is unreasonable, oppressive or unjust. A dispute about any aspect of the occupation or use of a lot, or about where a cable, pipe, sewer, drain, duct or piece of plant should be laid.

Applications go to the Magistrates Court, and Section 149A treats them as minor civil actions, which keeps them quick and largely free of lawyers. Complex or significant matters may be brought in, or transferred to, the District Court.

Section 149 is worth knowing separately. Where the corporation passed an ordinary resolution but a special one was required, or a special where a unanimous was required, the corporation or a member who voted in favour may apply to have the resolution declared sufficient. The court should not order a party who opposed the application to pay costs unless that party acted unreasonably. See our resolution checklist for which decisions need which.

Your obligations as a lot owner

Section 134 requires you to keep your lot, and any building or improvement on it, in good order and condition. The by-laws can shift that obligation to the corporation, and a leaseback arrangement shifts it to the lessee. Occupiers must keep the external parts clean and tidy.

Section 133 prohibits using the lot or the common property in a way that causes a nuisance or interferes unreasonably with another person's use or enjoyment. Section 132 prohibits interference with easements and services.

In a strata scheme under the Community Titles Act, Section 102 requires a special resolution before you erect, alter, demolish or remove a building, or alter the external appearance of one. Two narrow exceptions apply: work carried out in compliance with a direction under the Housing Improvement Act 1940, and approved development in a strata scheme of only two lots. If you proceed without authority, the corporation can require you to remedy any structural deficiency or restore the lot, enter and carry out the work if you do not, and recover the cost from you as a debt.

How this compares with strata

The two regimes share a shape and diverge in the detail. The differences that matter most to an owner are the co-owner deadlock rule, the absence of an exception for unfinancial owners on unanimous resolutions, the three month AGM deadline, the developer voting cap, the entitlement limb on convening a meeting, and, above all, who insures the building. For the strata position, see Your Rights and Roles as a Strata Unit Owner. For the committee side of community governance, see Community Title Management Committees.

Get in touch

If you have a question about your rights as a community lot owner, or a situation you are not sure how to handle, get in touch. We manage strata and community title groups across South Australia and are happy to help.

Call us on 1300 79 2255 or email hello@acaciacollective.com.au.