Property development

Hi Peter

What state are you looking at doing this development?

Regards

Maurice

Plan to hold and rent or sell?

You may find community title may be hardier to sell due to finance issues for the potential buyer.
Go strata if you must..

Regards
Michael

Hi Peter,

Great that you are getting into your first project.  What happend with the two homes you were considering doing as 'owner builder' in your earlier posts?

Seems to be some confusion from the comments above as to difference between strata, community, company, single unit dwellings, freehold titles etc.,  Could be due to posters being interestate and the differences this could entail.

I'm a builder, investor & developer (also a mother & farmer and until last year a Business Bank Manager) I'm not a lawyer, town planner or surveyor but I am in Qld (as your proposed development is) and I'm going thru the process of creating a community title scheme for two townhouses that I've had in my rental portfolio since we built them 2 years ago outside of Brisbane and I'll be assisting one of our clients with going thru the process in Brisbane shortly with 3 adjoining townhouses we are about to build for them. So here's my understanding:

Banks are not gun shy of community title properties (they can be of company title which is entirely different where owners have shares in a company which entitles them to use of a certain area of that property). 

The term community title is similar in meaning to strata – generally strata may be used for vertical subdivision and community title for horizontal.

A community title scheme is established upon the registration of an appropriate survey plan together with a community management statement (CMS).

Single unit developments which are common in Brisbane (your post doesn't state where you intend to do the development) but not across Qld.  They are likely to achieve a premium in market however can be more expensive to get thru council. Single unit dwellings are on their own freehold title as opposed to having 'common property' and they don't have a body corporate.

CTS – Community Titles Scheme

CMS – Community Management Statement

Body Coprorate – is established at time of registration in the titles office.  Comprises owners of all lots in the CTS & is administered by body corporate manager, in accordance with CMS. Resolutions are made from time to time at meetings.

Common Property – all the property outside the lots.  Includes exclusive use areas.

BFP – building format plan

SFP – standard format plan

Lot – the individual parcels created for ownership

A CTS must have at least 2 units/parcels (lots) & common property & must have a CMS.

The CMS is usually prepared by solicitor or body corporate agent.

The CMS must be signed by council & is lodged with the plan at the titles office.  It sets out rules, deals with exclusive use area, voting, decisions, sinking funds etc relating to body corporate.  The body corporate (owners of the 2 units) deal with matters relating to the CTS in accordance with the CMS.

There are 2 ways the property can be surveyed:
1. Building Format Plan.(BFP)
This is more common – the survey is conducted to locate & measure the units and prepare the BFP.  Building elements define the extent of each lot.  Often an 'exclusive use plan' is also prepared.  A survey is conducted to define areas within the common property that can be assigned for the exclusive use of each lot.  For example in my property each of the townhouses have their own gardens but share the driveway.  All of the area outside the actual dwellings is considered common property however the parts that are fenced off to each will be surveyed and deemed 'exclusive use'.

2. the less common option is to subdivide the land into separate lots with common property.  A standard format plan is prepared as opposed to a BFP.  It still requires a CMS & CTS and the Body corporate still controls the scheme bu each lot is a standard format lot like a conventional subdivision.

The following links may also assist:

http://en.wikipedia.org/wiki/Strata_title

http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/B/BodyCorpA97.pdf

http://www.justice.qld.gov.au/justice-services/body-corporate-and-community-management/online-training#Unit 4: Maintenance

http://www.derm.qld.gov.au/property/titles/guide_to_forms/pdf/guide_form_14_cms_first.pdf

http://www.brisbane.qld.gov.au/planning-building/common-building-projects/residential-projects/subdivision/index.htm

http://www.brisbane.qld.gov.au/planning-building/common-building-projects/residential-projects/subdivision/residential-subdivision-criteria/index.htm

http://www.brisbane.qld.gov.au/bccwr/lib181/chapter5_rdsingleunit_code.pdf

http://www.strata.com.au/aboutstrata.html#What_is_a_Strata_and_Community_Title_

http://www.livinginstrata.com.au/articles/qld/your-body-corporate

In terms of costs….

Surveyors:
– prepare building format plan
– exclusive use areas
– draft services location diagram

to give you an idea my Surveyor is charging $2,200 but depending on the project I'd advise you for feasibility purposes to allow up to $5K

Body Corporate Specialist / Solicitor (or you are permitted to do this yourself – see titles office link)
– prepapration of CMS

Call your solicitor for a quote.

Council:
– Sealing of plan & CMS
My local council has advised that these are to be lodged with IDAS form 32 and to allow 20 days if everything is in order. They're fees are currently $358 for Council to Seal Building Format Plan & $129 for Council to Seal CMS

Depending on which council your development will be in – call or check out the website and find out.

You might also find useful:
http://www.brisbane.qld.gov.au/2010%20Library/2009%20PDF%20and%20Docs/2.%20Planning%20and%20Building/2.5%20How%20apply%20development%20approval/Development_Assess_Fees_Brochure_20112012.pdf

Titles Office:
– lodgement of plan & CMS
I'm to check this but my understanding is: $275.50 & $132.50
http://www.derm.qld.gov.au/services_resources/item_list.php?category_id=152

Hope that assists, feel welcome to contact me direct.

Kind regards

Meg

Hi Peter,

You will need to speak to a qualified Accountant here (which I am not) there are implications for both stamp duty & gst depending on how you set this up.

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Kind regards

Meg