Folks,
can anyone please tell me if a Body Corporate is mandatory in NSW?This is for 3 villas (of 3 total) currently on a single torrens title that I am planning on strata titling. For example, can I strata title the units and just hold them for the next 20 years WITHOUT forming a Body Corporate?
Thanks for any help,
EmptyvesselI found a useful website on this stuff here; http://www.strataman.com.au/strata.html
Essentially a Body Corporate = Owners Corporation, OC.
The OC IS mandatory in the sense that one is setup upon registration of the Strata Plan with the NSW LPMA (or whatever their new name will be).
Apparently by-laws are NOT mandatory and this is where is gets confusing and I think I need expert advice from a solicitor and strata management company. There is this concept of an "initial period" where apparently I can't make changes to any by-laws until the initial period ends. the initial period apparently ends when I sell 1/3 of the lots. Or, in this case, 1 unit. At this point, it seems that i *might* as the developer have my voting rights diluted by at least half during any OC AGM's or other things requiring voting. All very legalistic and confusing.
I have initiated advice with some experts to see what I can learn. Sheesh, the council and surveyor part was easy. This Strata Scheme stuff is complex!
Still, if you have any advice on this, please do share.
Oh, and if you are reading this and considering a Community Title scheme, it might help to read this; http://www.strataman.com.au/community.html
Interesting.
I had a chat to the land titles office the other day on a more complex stratum question involving residential & commercial uses, they can assist in giving you what you need to know.
Right, I will give them a call. Thanks for the heads-up.
Hi EmptyVessel,
My partner and I are about to dive head first into a purchase of our first IP(s) which coincidentally is 2 villas on one (torrens) title.
The property is in Mudgee NSW and our stratgey is based on a buy and hold period of 10 years, after which we would consider perhaps selling one and keeping the other.
Firstly, thanks for the information so far as well as useful links – I can see this becoming bed time reading in the near future!
Secondly, have you found any information with regard to costs associated in changing a title from a torrens to strata? We were quoted approx $10-15K (yelp!) by the local real estate agent although I suspect she hadn't the faintest idea….
Would this cost be a tax deduction?Kate
YourHi there,
yes, I have progressed this and close to pulling the trigger after I re-balance some finances. After much research the breakdown is as follows;1st thing – Yes, the owners corporation is mandatory. Even for 2 villas like yours.
1. Surveyor – Measurements, submission of strata plan subdivision to NSW LPMA ~$2200-3500 + GST (Get quotes from about 5 surveyors. I found that their fees vary wildly. Some of them are blatantly gouging and need a lesson in negotiation. MY first step is to introduce competition)
2. Private Certifier – Complying Development Certificate – $400 + GST (If you have an existing complying DA, you may be able to bypass council approval again. Essentially this saves time in my case, council are currently estimating 4 months for turnaround of DA's. The private certifier can do it in 24 hours once I get my paperwork together.)
3. Private Certifier – Issue Strata Certificate ~$600 + GST
4. LPMA Lodgement – Est. $4000. The LPMA has a schedule of fees that you can look at, I will post this below. The surveyors I engaged gave me some rough estimates around $4000. For your 2 units, it should be less, maybe $2000-$3000.
5. Council DA approval – In my case I didn't need it, but they did quote me approx $500 when I queried.
6. Strata Manager – to handle setting up the by-laws, helping to arrange Owners Corp setup and otherwise usher me through the process. Approx $750 for the Rolls Royce service. You could shave a couple of hundred off this if you wanted.
7. Bank – Asses and issue new titles, loan re-config – $350
8. Solicitor – I don't know yet, I have budgeted $1000 to be safe.
9. Owners Corporation Insurance – Don't know, I need to get a quote for this, you just reminded me.I estimate around $9000-11,000 all up for me. I should be able to re-value for an extra $60,000-$90,000 at least. So I reckon it is totally worth it. Essentially buys me another investment property.
Now, this assumes that I don't need to do any additional works to make the subdivision compliant with the existing DA. e.g. Water Corporation certificate, Electricity metering, Fences, Environmental compliance etc.
Some useful links;
http://rgdirections.lands.nsw.gov.au/strata_schemes/components_of_the_plan
http://www.strataman.com.au/ – I spoke with Margaret from strataman. She was very professional and took the time to explain the setup and ongoing management.
http://www.nswstrata.com.au/ – Also gave me some good insight for setup and ongoing management.Hope this helps you. Feel free to ask anything else and I will try to help.
EV
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