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Subdividing your lot affected by an Owners Corporation

Owners Corporation: 09 June 2023

Author: Robert Bradley - Our People

Can the owner of a lot on a plan of subdivision where there is an Owners Corporation (body corporate) subdivide the owner’s lot into two or more lots and if so, whose consent and what approvals are required?

Sections 32 and following of the Subdivision Act 1988 regulate the alteration of subdivisions with owners corporations.

Section 32AI (1) (which was inserted into the Act in 2006) empowers an owner of a lot affected by an owners corporation to subdivide, alter or consolidate that lot, provided doing so:

  1. does not alter the boundaries or area of existing common property (although it can create new common property within the lot[i]);
  2. does not alter the boundaries or lot entitlement or lot liability of other lots; and
  3. does not add an area of land which is more than 10% of the affected lot.

If an owner proceeds with such an application, the owner must submit a plan for certification by the municipal council and lodge that plan for registration in the Office of Titles.

Section 32AI (3) expressly provides that “Consent to the registration of the plan is not required by any person in respect of land that is not the subject of the plan.”

The consents that are required are listed in section 22(1A) of the Subdivision Act 1988 being registered mortgagees, tenants, annuitants and caveators etc in respect of the lot being subdivided etc.

It follows that, a lot owner can do what they like within their existing lot in exactly the same way as the owner of a property where there is no owners corporation. The situation is only different if the owner wants to change the boundaries of common property or to change the boundaries or entitlements and liabilities of a lot owned by someone else. In those cases, a unanimous resolution of all the members is normally required.

A lot owner must also take into account the Rules of the Owners Corporation. For example, Rule 5.3 of the current Model Rules for an Owners Corporation requires an owner to notify the owners corporation when undertaking any renovations that may affect the common property.

Whether or not the property is affected by an owners corporation, the lot owner will also need to consider the potential need for a planning permit. By way of example, for a property located within a “Neighbourhood Residential Zone” under the Bayside Planning Scheme, a town planning permit is required to subdivide land. An applicant for a permit will be required, among other things, to satisfy the extensive requirements of clause 56 of the planning scheme. If a subdivision permit is obtained and the subdivision creates a lot of less than 300m2, a planning permit will be required to construct or extend a dwelling on that lot. If the lot is less than 500 m2, an application to construct or extend a dwelling on that lot will normally require at least 25% of the lot to be set aside as garden area. In this zone, building height is limited to 9 metres and to not more than two storeys.

[i] See s.32AI (1A) and (in relation to s. 32(3), a previous version of the clause) Walker v Sopov [2001] VSC 354

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