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Plan of subdivision
A plan of subdivision depicts the break-up of a piece of land, showing parcels of land, commonly called ‘lots’, that can be sold separately. The plan of subdivision for a property is registered at Land Victoria and an owners corporation is automatically created if the plan creates common property. The plan of subdivision defines and governs the ownership of land, buildings and airspace, setting out private lots, common property and each lot owner’s voting entitlements and financial contributions. Land Victoria registers and allocates numbers to the plan of subdivision and the owners corporation if one or more is created.
Lots
A lot is a part of land, buildings and airspace on a plan of subdivision that can be separately owned and sold. Technically, lots are parts of land, building or airspace that are not common property, road or a reserve, and include accessory lots like car spaces, storerooms, etc.
Lot entitlement and lot liabilities
The lot entitlements and lot liabilities of lot owners are set out in the plan of subdivision.
- “Lot entitlement” refers to your share of ownership of the common property and determines your voting rights. A lot for example, may have an entitlement of more than one vote
- “Lot liability” represents the share of owners corporation expenses that each lot owner is required to pay.
These entitlements and liabilities are determined by the developer at the time of subdivision.
Common property
Common property includes any parts of the land, buildings and airspace that are not lots on the plan of subdivision. Common property may include gardens, passages, walls, pathways, driveways, stairs, lifts, foyers and fences. The common property is collectively owned by the lot owners as tenants in common. Floor coverings and fixtures within the lot are usually the property of the lot owner.
Multiple owners corporations
A property can have more than one owners corporation. Multiples owners corporations are most commonly used in large, multi-storey buildings, commercial properties, or developments that combine residential and commercial lots. Multiple owners corporations generally operate to allocate access and management and maintenance responsibilities for certain parts of the property between different groups of lot owners.
For example, a person who buys a ground floor unit in a multistorey building whose purchase price includes offstreet parking may be a member of the owners corporation for the parking spaces, but not a member of the owners corporations for the lifts.
Where a property does have multiple owners corporations, it is important for lot owners to understand how these owners corporations affect their particular lot.
Common seal
A common seal is a rubber stamp, which can be arranged through a stationery shop. It contains the owners corporation and the plan of subdivision numbers allocated by Land Victoria.
All owners corporations must have a common seal, which represents the signature of the owners corporation. It is an important instrument of the owners corporation and its misuse can have serious financial and legal consequences.
The seal must be used on all documents that are created as the result of resolution passed by the owners corporation; for example, contracts for services, making additional rules or the appointment of an owners corporation manager. Those resolutions must be recorded in the minutes of a general meeting.
Each use of the common seal must also be witnessed by two lot owners, who sign the documents, print their full name and address and state that they are members of the owners corporation.
Some owners corporations keep a common seal register to record the names of the witnesses, the date and the purpose for using the seal. A seal register is useful but not mandatory.
