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When you purchase a property as part of a community, neighbourhood or precinct scheme, there are responsibilities and obligations you need to be aware of. This page provides an outline of these responsibilities and obligations.
On this page:
Your role as part of the association
When you buy a property as part of a community, precinct or neighbourhood scheme you become a member of the scheme’s association. Associations are usually set up by the builder or developer.
What is the purpose of a scheme association?
The purpose of the scheme association is to ensure association property, including the cost of maintaining it, is looked after.
Your association may also set rules about what you can and can’t do while living in the scheme.
What do I need to do as a member of the association?
As a member of the association, you have the right to attend general meetings including the annual general meeting (AGM) and vote on motions considered at or before those meetings.
General meetings can be held when necessary, for example, to change, cancel or make by-laws, change the management statement, or raise additional funds to cover unexpected works.
Decisions are made at general meetings on the basis of voting by persons who are eligible to vote.
Voting may be done in person or by using electronic means specified in the notice for a meeting. However, pre-meeting electronic voting can only be used if it is allowed by a resolution of the association and it cannot be used for an election of the association committee.
If you can’t attend a meeting but would like to be represented, you may appoint a proxy to attend on your behalf.
Visit the meetings and voting page for more information
You may also wish to be part of the association committee.
Financial obligations as part of a scheme
Associations need funds so they can maintain communal facilities and run the scheme. These funds are contributed by association members.
What financial contributions will I need to make as part of a scheme?
As part of the association, you will need to contribute financially to the scheme. Contributions made by members are not refundable when a member leaves the scheme, even if the money has not yet been spent.
Contributions may include:
- Contribution levy: A contribution levy is set by the association and is based on a budget that shows the existing financial situation and an estimate of payments to be made and received. Contributions can be paid by instalments, and the payment amounts and due dates can be varied.
- Special levy: Associations can vote to introduce a ‘special levy’ when there are insufficient funds to cover expenses, such as large capital works or unforeseen works. Special levies are calculated according to the unit entitlement of each association member.
- Administrative fund: The administrative fund is used for the day-to-day expenses of running the scheme, such as maintaining and repairing association property, recurring expenses, and insurance.
- Capital works fund: The capital works fund enables major work to be undertaken to association property.
What happens if I don’t pay my financial contributions?
If financial contributions are not paid by one month after the due date, they may attract a simple interest rate of 10% per year.
You may be able to arrange a payment plan with the association so you can pay off your overdue contributions in periodic instalments. The payment plan must be in writing and contain specific information, including:
- the full details of the lot owner
- the details about the amount outstanding, including any interest accrued
- the way the outstanding levies are to be paid.
If required, the association can apply to the NSW Civil and Administrative Tribunal (the Tribunal) for an order to require you to pay the outstanding contributions, any interest and/or any expenses incurred in recovering the unpaid contributions.
Rules for living in the scheme
Each association has its own by-laws, which are a set of rules that owners, tenants and, in some cases, visitors must follow.
By-laws cover the behaviour of residents and the use of association property.
How do I know what the rules are for my scheme?
The rules for your scheme are set out in the association’s by-laws which can be found in the association’s management statement.
It’s important you know and understand your scheme’s by-laws, as they vary from scheme to scheme.
The by-laws apply to everyone living and working in the scheme and can cover items such as:
- the use, management and maintenance of communal property such as roads, parks or pools
- storage and collection of garbage
- maintenance of water, sewerage, drainage, gas, electricity, telephone and other services
- insurance requirements
- occupancy limits
- architectural, building or landscaping styles.
If your scheme is in its initial period, additional restrictions may apply.
What happens if I breach my scheme’s by-laws?
If you breach your scheme’s by-laws, the association may pass a resolution to issue a notice that requires you to comply with a specified by-law. The notice must be given in the applicable form approved by Fair Trading.
If you continue to breach association by-laws, the association may apply to the tribunal and a monetary penalty may be issued.
Maintenance and repairs
Associations have a duty under the law to properly maintain the condition of association property and personal property vested in the association, including any open or private access ways.
Who is responsible for repairs?
The association is responsible for repairs and maintenance of communal property and any personal property that is vested in the association unless otherwise excluded by a special resolution.
Prior to the first AGM, an initial maintenance schedule must be provided by the developer which outlines when routine maintenance and inspections should take place.
Members are responsible for any maintenance and repairs within their own lot. This includes the removal of goods from your lot when you leave. Any goods left behind or abandoned at the end of a rental agreement or left on association property can be disposed of under the Uncollected Goods Act 1995.
Who do I speak to if there is an issue with association property?
If association property needs maintenance or repair, you should speak to the association secretary or the managing agent.
Repairs or maintenance may need to be approved by the association at a general meeting before being carried out.
Resolving disputes
Most disputes can be resolved quickly in the early stages if they are discussed openly. Associations can set up their own internal dispute resolution processes to deal with minor disputes.
Who do I speak to if I have an issue?
Most issues, including breaches of by-laws or complaints about the managing agent or facilities manager, can be addressed by the association.
If you have a complaint about repairs or maintenance of association property, you will need to speak to the association secretary or the managing agent.
NSW Fair Trading offers a free mediation service for community lands. Having first attempted to resolve the dispute through mediation is required before an application to resolve most types of disputes can be lodged with the NSW Civil and Administrative Tribunal, with some exceptions.