HOW DO I GO ABOUT SUBDIVIDING MY LAND?
This is a common question that we get from owners or purchasers of large blocks of land. Subdivision is the process of dividing your land into smaller blocks potentially maximising your profits and capitalizing on your investment.
Subdividing your land can be a good idea but it is often a long process and you really need to weigh up the costs with the potential benefits. The process can also be very complex so it is important to get the right advice from the professionals who deal with this type of situation on a regular basis. A good place to start is by talking with your conveyancer. They can point you in the right direction and advise what is required to complete the process. They will be able to a suggest a surveyor who will draw the plans and liaise with the relevant authorities for the approvals required.
There are three ways of subdividing the land and all options will need to be assessed so that you can achieve the most cost effective and profitable benefit from your land.
The options for subdividing land are Torrens Title, Community Title which can either be a community scheme or community strata scheme.
Torrens Title is where land is divided into two or more lots which share no facilities or infrastructure. There is a single certificate of title for the allotment of each block created.
This is the most common form of subdivision though is the more expensive option as additional meters and sewerage connections will be required. The government will also apply charges for open space when dividing the land by this method. However the land will usually have a higher value as there are less restraints on what can be done with the property as all the decisions are your own. Easements and encumbrances may be applicable depending on what the Council requirements for the subdivision.
A community title divides land into lots and common property and there are two options for community title:
- Community Scheme
This is the most common type of Community Title and the land is divided into two or more lots which have shared infrastructure and facilities such as sewerage and water supply (usually on the common property). There could also be a shared driveway which will need to be managed and maintained by a Community Corporation.
Your conveyancer will need to prepare additional documents for a community division. One that will always be required are the By-Laws which are lodged with the community division documents. You will need to discuss any provisions (such as Pets and Animals) that you want to include in these as they will affect the subsequent owners of the property. The By-laws will also include a provision for administering, managing and regulating the use and enjoyment of the common property and community lots.
If it is a large community division of more than 6 Lots then a Scheme Description will be required and again this will provide information as to how the land is to be or has been developed. If the land is to be developed later then a Development Contract may be required.
These are rather complex documents and you will need to discuss these in depth with your conveyancer before they can be lodged.
A Valuer will prepare a Lot Entitlement sheet which details the share that each Lot has in the Community Division.
- Community Strata Scheme
The other form of Community Title is a Community Strata Scheme which will apply for developments such as multistory complexes and apartments. The boundaries for each lot in a Community Strata Scheme are defined by the buildings on the Community parcel. This setup is similar to the old Strata Title however the buildings themselves are considered to be common property and are therefore the responsibility of the Community Corporation to maintain and insure.
A Community Corporation is formed on the deposit of the plan in the Lands Titles Office (LTO) and consists of the current owners of the Lots in the scheme. The Community Corporation’s administers and maintains the common property and will enforce the By-Laws that have been lodged at the LTO as part of their duties. The Community Corporation will be required to have regular meetings (at least once a year) to ensure that the community scheme is adequately insured and will be also maintain the records of the corporation. A community division of less than three lots can be exempted from this provision in the Act.
Administration fees, insurance, maintenance fees, special levies and other fees are all calculated in accordance with the Lot Entitlements which are annexed to the community plan. The Corporation determines what these fees will be at the annual meeting.
The Community Corporation will need to have in place insurance for the common property and any service infrastructure that is shared between the Lots. When the property is in a Community Strata Scheme the Community Corporation will need to insure and maintain the buildings as well as the common property
DO YOUR RESEARCH
- Contact the Council to find whether or not the land you own is suitable for a subdivision and also to ascertain what the minimum block sizes are in your Council area.
- Find out how much it will cost?
- Timeframes – How long will it take?
- Roads Access and Council Requirements – What are they?
- Are you planning to sell land only or build and sell or keep as an investment?
- Does the land have an easement or will it need an easement to be subdivided?
- How much will my holding costs be? All these questions and more need to be answered so that you make the most of your project.What do I need to do next?
- First you need to contact the relevant professionals who are needed throughout the subdivision. The main steps and people that are required are:
- A Licenced Surveyor will prepare a proposal plan to lodge with the Council and the State Commission Assessment Panel (SCAP). This plan will detail the proposed new allotments for you and will allow for the fastest and most cost effective way of division to suit your circumstances.
- A Town Planner may be needed if the subdivision is large and complicated. They can assist with what size blocks the Council will or won’t approve and what types of division you can undertake on the property. They can also assist you with what the end result will need to look like and any requirements for roads and services if required.
- The Local Council is the planning authority which will check your plan and outline their requirements. You will need to allow at least 12 weeks or more for the council’s decision.
- SCAP will formally approve your plan after they have contacted the council and the relevant authorities (including SAWater) to make sure all their requirements have been met. The surveyor can then combine a copy of your approval with your plan and lodge these with the Lands Title Office (LTO). The plan must be lodged within a year of the SCAP approval.
- Your Conveyancer will need to prepare a range of other documents that will need to be lodged with the LTO. These documents are required to follow up the plan and create the new allotments. All of these documents need to meet specific legal requirements so it’s important to get them right. It will also be necessary to discuss any ownership changes that you may want to happen during this process. Consent will be required from third parties such as banks, councils, electricity suppliers etc depending on the subdivision and Council and SCAP requirements.
- Once the LTO approves all the plans and documents, the plan is then deposited and new Certificates of Title are issued. This essentially means that titles for your individually divided properties are created.
Talk to your conveyancer if you have a development in mind. They will be an excellent resource to get you started on the road to your subdivision.
The team at McKay Business Services are all members of the AICSA and are proud Adelaide conveyancers