Community Associations & Precincts

Understanding Community Associations, Neighbourhood, and Precinct Schemes

When purchasing property within a community, neighbourhood, or precinct scheme, buyers become part of a unique living arrangement with benefits and responsibilities. These schemes are designed to manage shared spaces and ensure a harmonious living environment for all residents.

The role of associations

At the heart of these schemes lies the association, typically established by the builder or developer. Upon buying a property, you automatically become a member of this association. The primary purpose of these bodies is to oversee the management and maintenance of association property, including shared facilities and spaces.

As a member, you have the right to attend general meetings, including the annual general meeting (AGM), and vote on important matters. You may also choose to join the association committee, taking a more active role in decision-making processes.

Financial obligations

Living in a community scheme comes with financial responsibilities. Members are required to contribute to various funds that keep the scheme running smoothly:

• Contribution levies: Regular payments based on the association’s budget.
• Special levies: Additional funds for unexpected or large-scale projects.
• Administrative fund: Covers day-to-day expenses.
• Capital works fund: Finances major works and improvements.

It’s crucial to stay current with these payments, as late contributions not paid by one month after the due date, may attract a simple interest rate of 10% per year. In cases of financial difficulty, payment plans can often be arranged with the association.

Rules and by-laws

Each scheme has its own set of by-laws that govern resident behaviour and the use of association property, which can be found in the association’s management statement. These rules can cover various issues, from architectural standards to garbage collection and shared facilities. Familiarising yourself with these by-laws is essential, as breaches can result in notices and potential penalties.

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 requiring you to comply with a specified 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

The association is responsible for maintaining communal areas and shared property. Before the first AGM, the developer must provide an initial maintenance schedule outlining when routine maintenance and inspections should occur.

Individual lot owners, however, are responsible for the upkeep of their properties. If you notice issues with shared spaces, promptly report them to the association members or your strata managing agent.

Dispute resolution

While community living can foster a sense of belonging, disputes can occasionally arise. Most associations have internal processes for handling minor conflicts. For more significant issues, NSW Fair Trading offers a free mediation service. This step is often required before escalating matters to the NSW Civil and Administrative Tribunal (NCAT).

Community associations, neighbourhoods, and precinct schemes offer a structured approach to shared living. While they come with certain obligations, they also provide a framework for maintaining property values and fostering a sense of community. You can make the most of this unique living arrangement by understanding your rights and responsibilities within these schemes.