Posted on November 5, 2021 by Stuart Simington 9

Reforms to Community Schemes: Ramifications for Local Councils

Community land schemes are important forms of land title. They create schemes where lot owners in the scheme share the use and maintenance costs of common facilities, be they farm dams or private roads. According to NSW Fair Trading, ‘[i]n NSW, there were 937 community schemes, 63 precinct schemes and 1,754 neighbourhood schemes as at June 2019‘.

The laws governing them have changed little in 30 years.

This year, after 10 years of consultations, discussion papers, roundtable meetings, and position papers, the Community Land Management Act 2021 (‘Management Act‘) and Community Land Development Act 2021 (‘Development Act‘) passed into law. They are to commence on 1 December 2021.

In October 2021, the accompanying Community Land Management Regulation 2021 (‘Management Reg‘) and Community Land Development Regulation 2021 (‘Development Reg‘) were also released and will enter into force on 1 December 2021.

These Acts and Regulations ‘completely rewrite‘ the laws for community schemes in alignment with the major strata scheme reforms of 2015 (which you can see here and here).

The reforms, significant as they are in many respects, have only modest ramifications for local councils. Nevertheless, because they exercise planning functions as the consent authority for community schemes, councils should be aware of the changes directly relevant to them.

In summary, those changes are as follows:

• The Management Act addresses unauthorised parking on association property, an historically difficult area for both councils and the associations governing community schemes. Section 233(2)(g) will do this by allowing for the Management Reg to make provision for agreements between associations and councils relating to Council regulation of association parking areas under s 650A of the LG Act. At the time writing, the Management Reg has not yet made such provision.
• The Management Act also clarifies, in s 111, that associations must inform councils if any part of their property is to be used for commercial purposes or a different commercial purpose.
• The Development Act clarifies the procedure to be followed where councils do not approve amendments of development contracts for community schemes. Section 51 states that the council refusing the application to amend must give a notice to the applicant stating the grounds for refusal, right of appeal to the Land and Environment Court, and the time within which that appeal must be made (being 12 months or longer if the Court so decides).
• Finally, in a significant change to community land schemes, Part 8 of the Development Act provides for the amalgamation of subsidiary precinct or neighbourhood schemes with a parent community scheme. These amalgamations will require council’s consent as planning authority (s 61(1)(d)). The consent must be given in the approved form: Development Reg cl 29(5).

If you are interested in the background behind the community schemes reforms, an explanatory paper has been prepared by the NSW Department of Customer Service. This can be accessed here.

If you have any questions about this post, please leave a comment below or contact Stuart Simington on 02 8235 9704 or Lachlan Penninkilampi on 02 8235 9719.