New Property Developments – ‘To Strata or Not to Strata?’

New Property Developments

We’ve been receiving a lot of questions of late from property developers asking about ‘how to set-up an owners corporation’, so here’s a helpful checklist.

I think the starting point for this conversation should the question

  • An Owners Corporation (formerly known as Body Corporate) is created when a piece of land (Torrens Title) is sub-divided into 2 or more Strata Title lots;
  • The Owners Corporation is established/created upon the registration of the Plan of Subdivision with Land Victoria;
  • The Owners Corporation is a legal entity in its own right – it can therefore open and operate a bank account, enter into contract etc.;
  • The Owners Corporation, as the legal entity, is the owner of the land and responsible for the upkeep of common property;
  • It’s important for smaller sub-divisions (where there is a professional manager in place) to ensure the building insurance is appropriate and adequate;
  • Most of the time this means a Residential Strata Policy is needed to cover, at minimum, the replacement cost and public liability;
  • It’s ultimately the choice of the Owners / Developer as to whether to employ/engage a professional manager for a two-lot subdivision.

 

 

Consumer Affairs Victoria – Legal exemptions for owners corporation with two lots: 

https://www.consumer.vic.gov.au/housing-and-accommodation/owners-corporations/buying-into-an-owners-corporation/two-lot-subdivisions

 

Property Observer – “Why a strata subdivision is better than a Torrens title subdivision for some developments”

http://www.propertyobserver.com.au/finding/residential-investment/new-developments/13515-why-a-strata-subdivision-is-better-than-a-torrens-title-subdivision-for-some-developments.html

 

Need Help Changing or Setting-up a New Owners Corporation?
Speak to Strata Consultant on 1300 917 848, or email us at office@strataconsultants.com.au