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When should you use an easement to run services across a strata lot?

Discussion in 'Development' started by Seb C, 4th Mar, 2016.

  1. Seb C

    Seb C Member

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    Hi,
    I'm doing a 2 lot strata subdivision to create a vacant lot (my existing house will be on one of the lots). Both the electricity and water pipe to my house will need to run through the new lot (which I'm going to sell off), under the driveway. I thought that I'll need to create an easement across the other lot for these services, but my surveyor is saying that I should just create a strip of common land. I'm concerned that if i do that there will be implications for the driveway in that strip being on common land, ie the owners of both lots will be responsible to maintain it (it only goes to one lot). Does anyone know why it wouldn't be easier/better to create an easement?

    The same applies to sewer pipe that runs across from my lot through the other, would that be better as an 'easement' rather than a strip of common land?

    Thanks,
    Seb.
     
  2. bashworth

    bashworth Well-Known Member

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    It's hard to comment without seeing a plan. . . . but I would have thought the best option is for the rear block to be created as a 'Battle Axe Block' with the services in their driveway.

    I would also want an easement for the sewer.
     
  3. Big Daddy

    Big Daddy Well-Known Member

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    Can't create an easement until it's sold.
     
  4. bashworth

    bashworth Well-Known Member

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    Too late when its sold.

    The easement is created on the new title. . . during the subdivision process /
     
  5. bob shovel

    bob shovel Well-Known Member

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    Doesn't strata mean there is shared responsibility? Just add that

    A plan or sketch would make more sense for us
     
  6. Seb C

    Seb C Member

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    Hi Guys, I've now attached a rough plan showing the water supply and sewerage lines, the electrical wires will follow a similar path. It would be simpler if I ran these into each lot separately, but it would apparently cost $20k more to do the electricity / water it this way...

    Bashworth, you're right the new lot is to be a battleaxe block and the services will need to go under their driveway, so the issue then is should it be common land or an easement.

    And yes the easements need to be done before I can get a subdivision certificate, and I need to get a solicitor to draw up a "Section 88B instrument" to stipulate the legalities of each owners rights over those easements/ common land. Both the council and the LTO need this 88B to proceed.

    cheers,
    Seb.
     

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  7. bob shovel

    bob shovel Well-Known Member

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    That looks messy. Have you got a price to run new services? Your going strata to save costs aren't you?
    You have sewer main at the rear and water out the front, run new services and avoid the strata
     
    Last edited: 6th Mar, 2016
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  8. bashworth

    bashworth Well-Known Member

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    +1
     
  9. Seb C

    Seb C Member

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    Hi guys, I have no choice but to go strata. My council's DCP for subdivision limits battle axe Torrens subdivisions to 800 sq m, while this block is less than 600.
    Electricity connection/split will be about $4000, But would cost around $20,000 for a completely separate connection from the street.
    I don't know how much water will cost but only need new metre at front and sewer connection at rear - I will sell the block without a dwelling so won't need to run services any further.

    s.
     
  10. Seb C

    Seb C Member

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    I got some good advice from @bmc , when I raised this question about easements on another thread:

    "there are a few ways you can set up the strata configuration and without seeing all you design plans and DA conditions i'm just shooting in the dark.

    but just going from your sketch i'm assuming your design is based on a "no common property scheme" or minimal common property. that is all structures within their lot, form part of their respective lot. they do not form common structural cubic space.

    As for your services the strata scheme act provides implied rights over these services together with access. the services are considered common property (regardless of where they run ie: underground, through walls, roof space etc). there is no need to create a formal easement over these services. which is a typical method. however on the other hand if you wish to be solely responsible for the cost and maintenance of say, your sewer line, water pipe and concrete driveway, an easement can be created to benefit your parcel, burdening the other. the conditions and terms can be outlined in the sec88b. and/or an additional special by-law can be created to clarify liability or maintenance conditions. to create and easement over the service the surveyor will need to trace it.which is a task in itself once covered. it also looks like you will need an easement or right of way for access.

    i'm sure your surveyor will advise you on the most practical way to complete the development.
    and yes we can lodge the plans, documents, sec88b etc. via Eplan. the original "signed" forms are scanned and lodged via Eplan. it all goes in together. The Title must be produced to LPI, which i assume your bank has
    ."
     
  11. Rockstar

    Rockstar Well-Known Member

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    Seb C, I think I know this property. I have done plenty of duplex strata subdivisions and you can run the services wherever it suits. Any service pipe passing through one lot to reach and service the other lot becomes common property. There is no issue in doing this and it will save you big $, as you say, in providing separate connections within easements etc. Each lot owner still has rights to have their own house and garden space above the service pipes and the strata insurance will cover common property. (GIO has very good and affordable strata policies)
    Call Cantys surveyors if you are where I think you are located and Scott Thompson will advise you correctly.

    All the best. RS
     
  12. Seb C

    Seb C Member

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    Hi @Rockstar , wow what small world! on the internet anyway... :D It turns out that i was misunderstanding what my surveyor initially said as I tried to grapple with my own understanding of this whole easement thing... I thought we'd be making all the services common land (including the surface) and we'd then have all the implications of that. I met with him earlier this week and he explained it, just as you have. He is going to create an easement at the front of the lot for services, mostly because my DA conditions say I have to, and create a section 88b for it. The water and electicity for both lots will run through that. There is another sewer pipe however that won't need an easement because, as you say, services like that are automatically common land.

    RS, you mentioned strata insurance, which I was hoping to avoid as we won't have any common land that contains buildings on it. The only common land that isn't also an easement will be that one sewer pipe taking sewerage from one lot through the other. What do you think? From what I read you are exempt from needing a sinking fund or insurance if there is no common property (with buildings). No probs if you haven't worked with a case like this. ta
     
  13. Rockstar

    Rockstar Well-Known Member

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    If you are creating a strata title you must by law have an Owners Corporation (Body Corp). Fortunately, this can be self managed and there is no need for Admin Fund or Sinking Fund but you must maintain a strata roll and minutes of IGM and AGM's. You should also have a strata seal (stamp).

    Re 88b: Is there a mains sewer at the front? I would avoid 88b if possible as they add much extra $ and time. I have never had to do one unless council has asked me to create one over their existing sewer main which has previously not had an easement. Actually, if you are creating a vacant strata lot you may be asked to put a restriction on use for the rear Lot so they build the specified house plans and/or ensure that stormwater detention (or provision for it) is carried out. Maybe this is included in your DA consent?
     
  14. Seb C

    Seb C Member

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    Hi @Rockstar , yes my DA conditions from Council include requirement for an 88b because of sewer mains running down two sides of the property - that didn't have easements in the original 88b. Council have then also asked us to include in the 88b the easement for services at the entrance to the new lot, even though strictly speaking that shouldn't be necessary. So I'll need a solicitor to draw that up... more $!

    And yes in our DA we had to include plans of a dwelling which is then a development consent. We did a 2 stage DA: strata sub followed by duel occupancy.

    Thanks for the info about strata Owners Corps etc, I did some research initially but it did my head in! So I think I'll wait until the sub division is (finally) through and then dive into that can of worms. cheers.
     
  15. Rockstar

    Rockstar Well-Known Member

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    if it helps (and I'm sure it will) I can give you templates of IGM, AGM, and Strata Roll.
    Ask your surveyor if he is familiar with any particular solicitor in previous dealings for Strata subdivisions.
    And don't worry about the $ - you are about to make a lot of money if you can pull it off. I must say that selling vacant strata lots with approved plans are less appealing than normal. I have seen a couple sit on the market for quite a while because people aren't keen on the hassle of building - especially when it is an approved floor plan they may not be that happy with. You would be better off building the house and then selling the property if you can afford it - or hold it as a rental investment.
    Is it 2 or 3 bed?
    The completed house will probably be worth 420k + whereas the vacant lot could only be worth around 200k (these are guesstimates based on recent sales)
     
  16. Seb C

    Seb C Member

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    @Rockstar , ahh yes, we deliberated long and hard about whether to build ourselves rather than sell the block with constraints... our eventual decision not to build came down to a couple of things, although we're not experienced in such things:
    a) even though we calculated we would make more profit and there would be more demand from buyers, there would be greater risks of building cost blow outs that would eat into this profit. coupled with:
    b) the time, energy and endless decision making of building and fitting out a place. and
    c) the extra profit would be eaten up by capital gains tax, whereas most of the capital gains from the land sale would be ameliorated by various offsets including the original pro-rata cost of the land.

    RS, it would be interesting to hear your thoughts on the logic behind these, especially has you've clearly you have had success with such things, and your experience would help not to be overwhealmed by the prospect of building! We are hoping that there will be enough of a demand for lower-cost land in OS that if we price it right (around $200k as you say), it will hopefully sell. We've also left the concept drawings pretty vague so a buyer could still put their finishing touches on it, although yes, we were forced to submit a floorplan. I'm hoping that buyers will either like what we've designed and go with that, or not be overwhealmed by doing a sect 96 to change it.

    That's a very generous offer to let us see your templates for the strata docs, much appreciated. If you're still happy to do it, send me a PM.

    Oh and re solicitors, I think I'll go with Merideth at S&P. My surveyor recommended her, they advertise experience with subdivision, and she did the conveyancing when i bought this house 11 years ago!

    Cheers, Seb.
     
    Last edited by a moderator: 19th Mar, 2016
  17. Rockstar

    Rockstar Well-Known Member

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    Happy to do it Seb but it might be a good idea to take your email address out of the above post so you don't get spruiked or spammed unless you're happy for the world to see it! ;)

    If any other readers wish to view the templates they can let me know.

    A lot comes down to whether it is a "one off" venture or if you plan to delve more into the world of property development. If you obtained an owner builder license and had the mental strength and stamina to see it through the project I feel it would be well worth it if either you or your partner are not working full time. :) Having said that, building projects are very demanding at times - especially for the inexperienced.
     
  18. Seb C

    Seb C Member

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    @Rockstar thanks for the posting tip, I'm new to forums: rookie mistake! That post seems to be removed, hopefully someone protecting me. Let me know if you didn't get the email down. And I'm happy to compensate you for sharing the templates if you like, particularly as you probably had to purchase them yourself.

    btw, you asked the house size, its 2 bedrooms, about 85 sqm, one story. And then a sperate double car port and existing gazebo and shed.Couldn't fit a house much bigger than that on the block, given the constraints.

    This project probably will be a one off, although one day we might delve into getting a house of our own built. As we've gone through this whole DA for subdivision process (we did it all ourselves, no planner) we thought "we've had to learn so much to do this, hopefully we can use the knowledge again" - but now it has taken so long and been so difficult (with council) that we're being turned off the idea of ever having to do it again! It's a catch 22.

    In regards to being an owner/builder, there's a chance that my work will be uncertain next year so we've thought about me project managing the build instead, but from the experiences I had trying to get tradies to turn up I'm starting to believe that you'd be better off paying extra for a builder to project manage as the tradies have much more of a vested interest in turning up!
     
    Last edited: 19th Mar, 2016
  19. Rockstar

    Rockstar Well-Known Member

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    I can still see the email address Seb. Go back and edit it out. If you can't then ask the moderators to take it out. They will do this for you + delete whole posts if necessary.

    Yes it is good to build on knowledge and experience. It is a sensible decision to have kept the house and project small. There are plenty of singles in the area (particularly women) looking for this product around the 420k - 450k mark. Fortunately for you the prices have gone up considerably in the past 1 - 2 yrs. Rents are strong and housing supply is low. This product was selling for around 350k - 400k a yr or two ago.
    I'll send you an email. :)
     
  20. Seb C

    Seb C Member

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    cool, I've reported the post. hopefully they'll be swift.

    Do you think we're crazy not to build? I can't imagine that a lot of single people in this demographic would be keen on buying a cheap block of land and then organising the build themselves...

    then again, I just did a search for blocks of land under 250k in OS and the only one that showed up was 6A Gin Gin Cres, which is someone's front yard, carved off at 600 sqm.... so that speaks well for reduced supply.

    @Rockstar
     
    Last edited: 19th Mar, 2016