Community Association

Buying a home at Woodbury Ridge is an exciting milestone, but it comes with a set of rights, obligations and governance structures that many new owners are unfamiliar with. In New South Wales, community associations are a well-established form of land title, distinct from the more widely understood strata and Torrens titles. This article brings together guidance from NSW Fair Trading and practical information specific to community association living, covering everything from legal structure and finances to governance, by-laws and dispute resolution.

What Is a Community Scheme?

Community, precinct and neighbourhood schemes are forms of land title used when land is subdivided with shared association property. They apply to a wide range of developments — from residential estates and rural subdivisions to marinas and golf courses.

In NSW, there are three scheme types. Community schemes contain two or more development lots, which can include recreational facilities or commercial spaces. Precinct schemes consist of lots intended to be further subdivided, and always sit within a larger community scheme. Neighbourhood schemes are made up of individual lots — typically freestanding houses or townhouses — and can exist independently.

For residents of Woodbury Ridge, the relevant form is a community association, which operates under community title — not Torrens title, leasehold, strata or unit title. This is an important distinction, because it changes how ownership, maintenance and governance responsibilities are allocated.

The Legal Framework

Community schemes in NSW are governed by two key pieces of legislation: the Community Land Development Act 2021 and the Community Land Management Act 2021 (commonly referred to as the CLM Act), along with their associated regulations. Together, these Acts set out how community plans are registered, how associations are formed and managed, how decisions are made, and how disputes are resolved.

A community association comes into existence when a community plan is registered with the Registrar-General, typically by the original builder or developer. Once registered, the plan is given a deposited plan number by the NSW Land Registry Services, and the association is formally named — for example, "Community Association DP No. [XXXXX]." Registration of the plan creates the community development lots that individual owners purchase, as well as the community property that is shared by all members.

Community Association vs. Strata: Key Differences

Many people are familiar with strata schemes and their body corporates. Community associations operate on similar principles, but with some important differences that are worth understanding clearly.

The most significant practical difference is that in a community association, each lot owner is fully responsible for everything within their own lot. This includes the maintenance, upkeep and insurance of their home. The association itself does not take responsibility for structures within individual lots — unlike some strata arrangements where the owners' corporation may manage the building fabric. This means that owners in community schemes generally enjoy more autonomy over their own property, but also carry more individual financial and maintenance responsibility.

On the upside, the ongoing costs of belonging to a community association tend to be lower than those associated with strata schemes, partly because the scope of common property management is more limited.

The Community Plan and Association Property

When a community plan is registered, it creates two categories of property: the individual development lots owned by each member, and the community (or association) property that belongs to the association collectively and is managed for the benefit of all members.

Association property, including the park and playground, walking paths, shared infrastructure (bore water system), and other facilities set aside for common use. While these areas are classified as association property, the practical responsibility for maintenance can sometimes be nuanced.

Primary Functions of a Community Association

Under the CLM Act, a community association has a defined set of primary functions. Its core obligation is to control and manage association property and to administer the scheme for the benefit of all its members.

In carrying out this role, the association must manage the scheme's finances, keep accurate accounts and records, maintain and repair association property, and arrange appropriate insurance for the scheme. These are not optional activities — they are legally required responsibilities set out in the legislation.

Beyond these statutory functions, associations are also responsible for creating and enforcing by-laws, appointing managing agents (Bridge Strata) or facilities managers where appropriate, and providing a framework for resolving disputes among members.

The Community Management Statement

One of the most important documents in the community scheme is the Community Management Statement (CMS). This is the foundational governing document that sets out the by-laws of the scheme and defines the powers, duties and procedures of the community association.

Every scheme must have a management statement, and it must be registered with NSW Land Registry Services. The CMS is binding on everyone who lives and works in the scheme, including visitors.

The legislation specifies what must be included in a CMS. Mandatory content covers by-laws relating to:

• the location, control, management, use and maintenance of open access ways and private access ways on the community property

• the control, management, use and maintenance of all other community property, including any special facilities

• internal fencing on the community parcel, including any obligations of the association or subsidiary bodies

• the storage and collection of garbage and related obligations

• the maintenance of water, sewerage, drainage, gas, electricity, telephone and other services

• insurance of the community property

In addition to these mandatory provisions, associations may include optional by-laws covering matters such as keeping of animals, water usage policies and behavioural guidelines for residents and visitors.

The CMS can be amended, but any changes must go through a formal resolution process at a general meeting and be registered with Land Registry Services. Owners should make a point of reading and understanding the CMS for their scheme, as it defines the rules they are bound to follow.

See the Community Documents section on the home page for Woodbury Ridge's CMS.

Membership: Rights and Responsibilities of Owners

When a buyer settles on a property within a community scheme, they automatically become a member of the community association. In the case of Woodbury Ridge, this happens upon settlement. Membership is not voluntary — it is an automatic consequence of ownership.

As a member, each owner has the right to attend and vote at general meetings, including the Annual General Meeting (AGM). Members may vote in person, by electronic means (where the association has resolved to allow this), or by appointing a proxy to attend on their behalf. It is important to note that electronic pre-meeting voting cannot be used for elections to the association committee.

Owners who wish to play a more active role in how the scheme is run may stand for election to the association committee, which handles the day-to-day management of the scheme between general meetings.

Membership also brings obligations. Owners must comply with the scheme's by-laws, pay their levies on time, maintain their own lots, and participate in the governance of the scheme in good faith.

Governance: Meetings and the Association Committee

Annual General Meeting

A community association is required by law to hold an Annual General Meeting at least once in each financial year. Notice of the AGM must be provided in writing to all members listed on the Association Roll. The AGM is the primary forum for making key decisions about the scheme, including adopting the financial statements, reviewing insurance policies and electing the association committee for the coming year.

General meetings (other than the AGM) can also be called throughout the year when necessary — for example, to change or create by-laws, amend the management statement, or raise special levies to cover unexpected costs.

The Association Committee

Day-to-day management of the association falls to the association committee, which is elected at each AGM. The committee typically includes a chairperson, secretary and treasurer. Depending on the scheme's needs, sub-committees may also be formed to focus on specific areas such as land management, water infrastructure, financial oversight or review of the CMS.

The committee can make decisions on routine matters between general meetings, but significant actions — such as approving special levies or amending the CMS — must be referred to a general meeting of all members.

Finances and Levies

A community association is required by law to maintain two separate funds:

The Administrative Fund covers the day-to-day costs of running the scheme. This includes routine maintenance and repairs of association property, recurring expenses such as insurance premiums, and the cost of administering the association.

The Capital Works Fund (sometimes called the sinking fund) is set aside for major or capital expenditure — for example, significant infrastructure repairs, renewal of shared facilities, or large-scale improvements to association property.

Every member of the association contributes to both funds through levies. The proportion each owner pays is determined by the unit entitlement assigned to their lot. Unit entitlements are set at the time the community plan is registered, assessed by a registered valuer based on land values at the time of registration. This means an owner with a higher-valued lot at registration will pay proportionately more in levies than an owner with a lower-valued lot.

Types of Levies

• Contribution levies (or ordinary levies) are set by the association based on a budget that reflects the scheme's existing finances and anticipated income and expenditure. They can be paid in instalments, and the amounts and due dates can be varied by resolution of the association.

• Special levies can be voted in by the association when there are insufficient funds to cover significant unexpected expenses or large capital works. These are also calculated according to each member's unit entitlement.

Unpaid Contributions

If levies are not paid within one month of the due date, a simple interest rate of 10% per year may be applied to the outstanding amount. Owners who are struggling to meet their financial obligations can request a payment plan from the association, allowing overdue contributions to be repaid in instalments over up to 12 months. The association must respond to a payment plan request within 28 days. If a payment plan is in place and being followed, the association cannot take recovery action against the owner for those levies.

Payment plans must be approved by a majority vote at either an association meeting or a committee meeting, and the committee cannot delegate the decision to waive interest on overdue levies — that decision must be made at a full association meeting.

By-Laws: The Rules of the Scheme

By-laws are the set of rules that govern how owners, tenants and visitors behave within the scheme and how community property is used. They form a key part of the CMS and are legally binding on everyone who lives or works in the scheme.

By-laws may cover a wide range of matters, including the use and maintenance of communal property such as roads, parks and pools; garbage storage and collection arrangements; maintenance of utilities and services; insurance requirements; occupancy limits; and architectural, building or landscaping standards.

It is essential that all owners read and understand their scheme's by-laws, as these vary from scheme to scheme. Where an owner believes a by-law has been breached — either by themselves or another resident — the association may pass a resolution to issue a formal notice to comply. If the breach continues, the association may apply to the NSW Civil and Administrative Tribunal (NCAT), which can impose monetary penalties.

Maintenance and Repairs

The association has a legal duty to properly maintain association property and any personal property vested in the association. This includes open and private access ways within the scheme.

Prior to the first AGM, the developer must provide an Initial Maintenance Schedule (IMS) that sets out the routine maintenance and inspection requirements for the scheme. This schedule is prepared in a standard form approved by NSW Fair Trading and gives the incoming association a clear picture of what ongoing maintenance obligations look like.

Individual lot owners are responsible for all maintenance and repairs within their own lots. This is a fundamental difference from many strata schemes. If something inside a community association lot requires repair — including the house itself — it is the owner's responsibility, not the association's.

Where association property requires repairs, members should report the issue to the association or Bridge Strata. Significant repairs may need to be approved at a general meeting before work can proceed. NSW Fair Trading has investigative and enforcement powers to ensure associations meet their legal repair and maintenance obligations, and can issue compliance notices, penalty infringement notices, or apply to NCAT for orders where a breach is found.

Insurance

The association is responsible for arranging and maintaining appropriate insurance for the scheme. This must include a building damage policy, public liability insurance, workers compensation insurance, and voluntary workers insurance. All policies must be held with an insurer approved under the Insurance Act 1973 (Cth).

The damage policy must provide cover sufficient to fully rebuild or replace association property to its original condition — not merely its current market value. This includes the cost of debris removal and professional fees for architects and other service providers involved in any rebuilding.

Insurance valuations must be carried out at least once every five years by a qualified valuer who meets the criteria specified in the legislation.

Resolving Disputes

Most disputes are best resolved early through direct communication. Where that fails, NSW Fair Trading offers a free mediation service — a required step before most matters can be escalated to the NSW Civil and Administrative Tribunal (NCAT). Fair Trading also has enforcement powers, including the ability to issue compliance notices and penalties where associations fail to meet their legal obligations.

Sources: NSW Fair Trading — Community and Neighbourhood Schemes (nsw.gov.au); Community Association Information 2023 (Woodbury Ridge Estate).