By Scott Raglus - Manager
At OC by LDB we understand that reading Plans of Subdivision can often be very confusing, particularly with multi level developments. One of many elements we believe is important to understand is what is defined as a Lot and what is Common Property.
The Plan of Subdivision is a legal document that divides a large parcel of land into smaller lots or parcels.
This plan provides a detailed layout of how the land is subdivided, including the dimensions of each lot and common areas, such as paths, driveways & communal services & facilities.
Key elements for interpreting strata plans under the Strata Titles Act 1967
Lot boundaries that are defined by structures (walls, floors, ceilings) are shown by
thick continuous lines.
Where boundaries are defined by structures, the boundary lies along the median of the structure unless otherwise specified.
Boundaries not defined by structures are shown by thick broken lines.
Any thin lines or thin hatched lines do not represent a parcel boundary & generally form part of the Lot, eg balcony connected to lot.
Common property is any area not defined as being part of a lot & may be in air space above or below ground level & is labelled a “Common Property”.
An Owners Corporation (previously a Body Corporate) is formed when a property is subdivided into multiple Lots, and there are shared spaces or communal amenities (like elevators, gardens, or parking lots). This body is made up of all the individual lot owners.
Attached to & forming part of the Plan of Subdivision is a Schedule of Lot Entitlement & Liability.
“Lot Entitlement" refers to your share of ownership of the common property and determines your voting rights. A lot may have an entitlement of more than one vote.
‘Lot Liability’ represents the share of owners corporation expenses that each lot owner is required to pay
Lot Entitlements & Liabilities, which are not necessarily equal, are determined by the Land Surveyor preparing the Plan of Subdivision, taking the following matters into consideration:-
Area of the lot
Value of the lot
Access to common property & facilities
There is an obligation on the surveyor to ensure that the calculation is “fair & equitable”
Any change to a Plan of Subdivision after it has been registered, requires a unanimous resolution from the owners corporation.
The Plan of Subdivision and Owners Corporation are closely connected:
The Subdivision Plan defines the boundaries of the individual lots and common property, which directly informs the creation of the Owners Corporation.
The Owners Corporation comes into existence when common property is involved. For example, in a building with multiple units, common areas like hallways, elevators, and the building’s exterior are managed collectively by the Owners Corporation.
Subdivision and Owners Corporation matters are governed by state or national legislation & in Victoria this is the Owners Corporation Act 2006.
These laws establish the rights and obligations of owners, define the role of owners corporations, and set out dispute resolution processes.
The Plan of Subdivision and Owners Corporation are key components of urban and suburban development.
While a subdivision plan divides land and outlines individual ownership, an owners corporation helps to manage communal areas and ensure the smooth functioning of shared spaces. However, managing both effectively requires careful planning, clear governance structures, and adherence to legal frameworks.
Mismanagement or ambiguity can lead to disputes or neglect of common areas, so it's important to get the foundations right from the start.