Stratum subdivision of part of a building

Sections 196B, C, D, E, F, G, H, I, J, K and L Conveyancing Act 1919.

The creation of mixed-use developments where shopping centres, commercial offices and residential home units occupy separate floors within the one building necessitates the preparation of a plan of stratum subdivision. To enable the conflicting needs of the various occupants to be accommodated the building can be subdivided horizontally into lots, each of which can then be sold, leased, mortgaged or further subdivided by a strata scheme. For example, a multi-storey building on a city block may contain a carpark with four underground levels, commercial retail outlets at ground level, followed by ten floors of office space and finally five floors of residential units at the top of the building. The residential units and some of the carpark may form a separate strata scheme subdividing one of the stratum lots, while leases may be created for the commercial offices and/or shops comprised in the other stratum lots.

Stratum subdivision of a building is not limited to large inner-city office towers it may also be utilised by small land owners such as clubs and other organisations which seek to take advantage of a commercially viable site by selling off commercial or residential units while retaining totally self contained club rooms and administrative offices within the same building.

A Building Management Statement (or, if a strata scheme will be created over one or more of the stratum lots a Strata Management Statement) may be lodged setting out the provisions for the management and maintenance of the building as a whole entity.

Mutual easements for support and shelter come into effect automatically upon registration of the plan. Statutory forms of easements for services and rights of vehicular and personal access may be created to regulate the use and maintenance of the building by the owners of the stratum and strata lots.

For further information see Registrar General's Guidelines for Strata Schemes - Part Strata Development.

Plan preparation

A deposited plan showing a stratum subdivision of part of a building has the following features:

  • The first sheet of the plan defines the parcel at ground level and must be prepared in the usual manner in accordance with the Surveying and Spatial Information Regulation 2012.
  • Subsequent sheets of the plan are prepared for each level (or group of levels) within the building. Each level is defined as a stratum between specific Reduced Levels and shows the lot layout and site of any new easements at that level.

If the stratum of the lots is complex or has numerous inclined planes, sufficient cross-sections though the building should be included to clearly define the layout of the lots and/or easements. See also the requirements of cls.13 & 62 Surveying and Spatial Information Regulation 2012.

With the exception of statutory easements for support, shelter, access and services, all new easements must be created by s.88B Conveyancing Act 1919 and set out in the usual instrument for lodgment with the plan. The site of these new easements should be fully defined both horizontally and vertically. In this regard sufficient reduced levels (and cross-sections, if appropriate) should be shown to clearly define each site. Easement for advertisement signs that wrap around the outside walls of the building are usually defined by cross-section.

It is common practice for the boundaries of stratum lots to be defined through the centre of the concrete slabs forming the floors, walls and ceilings of the building. This enables small variations (speed humps, drainage slopes etc) to be included in the slabs without the necessity of undue complexity in the survey definition. When such a lot is subdivided by a strata scheme the material of the wall between the inner face of the wall or floor and the centreline becomes structural cubic space comprised in the common property of the strata scheme.

Similarly, the outer face of the wall of the building need not coincide with the parcel boundaries. A strip of airspace may exist between the wall and the boundary. After strata subdivision of the stratum lot this airspace will be comprised within the common property of the scheme.

Building Management Statement

It is recommended that the developer adopt up-front disclosure provisions, set out in a Building Management Statement (BMS) lodged with the stratum plan of subdivision. The statement is designed to inform and protect intending purchasers and must make reference to certain matters relating to the management of the building including how the statement may be amended and the manner in which disputes are to be settled. These matters are prescribed in Schedule 8A Conveyancing Act 1919. The statement must be prepared in terms of Approved form 12 (PDF 38 KB).

A Strata plan which subdivides one or more lots which only include part of a building must include a Strata Management Statement. In order that the building is not now governed by two documents dealing with the same subject matter, the Registrar General may waive this requirement if there is a BMS in force for the building. Section 196J Conveyancing Act 1919 provides that upon registration of a strata management statement, any existing building management statement ceases to have effect.

The BMS acts as a deed binding each person who owns a lot in the building, whether at the time the statement was registered, or in the future. The statement also binds other parties with a registered interest on the titles for the building (mortgagees, lessees and chargees), whether now or in the future.

Easements affecting a plan of part of a building

Easements for support and shelter

Registration of a stratum plan of subdivision comprising part of a building and a Building Management Statement results in the automatic creation of reciprocal implied easements provided in ss. 196K & 196L Conveyancing Act 1919.

These statutory easements include:

  • an easement for the subjacent and lateral support of the building constructed on the stratum parcels. Cross support is created between all lots (including any lots and common property in a strata scheme subdividing a lot) and the other parts of the building, and
  • easements for shelter appurtenant to, and affecting, all lots in the stratum plan.

Reference to these easements are not shown on the plan.

Easements for services

In order to avoid the complexity of showing all the service lines within the building on the subdivision plan, it is common practice to create easements for services over the entirety of all lots in the plan. These easements are also created pursuant to section 196L Conveyancing Act 1919 and are set out in a Section 88B Instrument lodged with the plan. Certain standard terms are implied for these easements unless the instrument provides otherwise see Schedule 8B Conveyancing Act 1919 (Building Management Statement).

A notation is added to sheet 1 of the plan:

NOTE: EASEMENT FOR SERVICES AFFECTING THE WHOLE OF LOTS ......

Rights of vehicular and personal access

These easements are also included in the s.88B Instrument, together with a schedule of lots burdened and benefited by each easement. The terms and conditions are also specified in the abovementioned Schedules. Each site should be shown on the plan fully defined both horizontally and vertically.

Particular consideration should be given to these easements to ensure that all lot owners have the necessary rights of way through other lots to maintain access to the street. This includes:

  • rights of access down fire stairs through other lots on lower levels, and
  • rights of vehicular access from car space lots up through basement levels (which may be comprised in other lots in different ownership) to street level. Likewise, it should be clearly shown which part of the car space level is not to be subject to the right of access.

Other easements

All other easements are created (and their sites defined) in the usual manner.

Examples of stratum subdivisions related to buildings

  • DP826455 - Park Royal Hotel, Sydney (City)
  • DP831724 - Auburn
  • DP854342 - Catholic Club, Sydney (City)
  • DP878165 - No.1 Hosking Place, Sydney