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Community Title Schemes – Owning Investment Units and Villas in a Complex

By Rebecca Cosgrove

There are many advantages to buying an investment unit, villa or town house including a potentially lower purchase cost and simpler more cost-effective maintenance outlays.  In addition to cost considerations you’ll then need to engage (in most cases) with a Body Corporate and it’s associated ‘Community Title Scheme’, and that opens the door to the main (management) differences between buying an investment home or unit.  Ray White Property Management are expert at managing unit type investment properties in conjunction with owners and any related Body Corporate/s, so in today’s feature we’d like to explore some important considerations before you decide to purchase one or the other.

It’s fair to say that buying a property for owner occupation often involves a lifestyle choice as well as other important considerations, whereas location, condition, rental yield and return on capital investment are front of mind for the investor.  In taking the investment road it’s important to understand key differences and ask relevant questions so you can make the right decision.

  1. What is a Community Title Scheme and Body Corporate?

A community title scheme (CTS) is managed by a body corporate and contains multiple units or stand-alone dwellings.   In general, the body corporate manages the common areas of the CTS.  For example, if a unit complex has a pool or communal BBQ area or park like gardens, then you’ll find the body corporate is responsible for maintaining those facilities.  Each unit/villa/townhouse in a CTS has its own lot number and plan which shows its boundaries and size. Whilst many community title schemes are residential, they can also be commercial or a mix of both.  If you’d like more detailed information on body corporates and CTS we recommend checking out information published by the Qld Government at:

  1. How does buying a unit or townhouse in a CTS (as opposed to a house) impact on purchase costs?

Buying a property in a CTS may involve some additional costs, so we recommend consulting with a conveyancing lawyer during the buying process to determine the most appropriate enquiries and searches.  It may be necessary or recommended to undertake extra due diligence enquiries about the body corporate, its financial structure and cash flow position.

  1. Does the size of the complex impact on property values as opposed to buying a stand along house?

This is a difficult question as there are many factors that impact on property values.  The number of units in a complex together with its design, location, and the rental yield over time may impact on longer term property values, with many of those considerations being relevant to stand alone house purchases as well.

  1. How is the Body Corporate managed and what are they responsible for?

Once you’ve purchased in a complex you are entitled to voting rights in the body corporate, so you’ll have a voice in the management of the complex.  The body corporate is responsible for managing the common areas, maintenance of the overall building structure and regulating the complex within the limits under the Act.  Things like building insurance is usually handled by the body corporate for the whole complex, whilst the owner is responsible for contents insurance related to internal fit-outs, features and general contents.  Sometimes the boundary between the two can get blurred so we recommend getting professional legal advice to help resolve any disputes.

Finding the right property manager before purchasing a property is a wise strategy, as a skilled and experienced manager can provide you with relevant advice to help determine if a property is suitable as a rental.

Ray White Toowoomba are your local property management specialists and are here to help with any questions or advice.

NB: This publication covers real estate, property market, finance and legal related issues in a general way. It is intended for general information purposes only and should not be regarded as professional financial or legal advice. Ray White Property Management recommends obtaining professional legal and/or finance advice before taking any action on the basis of the information presented in this publication.

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