STR-03 Single Tier Merger and Conversion Options

Version 7 - 07/08/2023

Disclaimer of liability

This guide is produced by the Western Australian Land Information Authority (Landgate) to provide the community with a basic understanding of strata titling principles. It is a general information source only, it is not legal advice and should not be taken as legal advice on strata titles. You should refer to the legislation available on the WA government legislation website www.legislation.wa.gov.au

To the extent permitted by law, Landgate will in no way be liable to you or anyone else for any loss or damage, however caused (including through negligence), which may be directly or indirectly suffered in connection with use of this document. This general disclaimer is not restricted or modified by any of the following specific disclaimers.

Various factors beyond the control of Landgate can affect the quality or accuracy of the information and products. While every effort has been made to ensure accuracy and completeness, no guarantee is given nor responsibility taken by Landgate for errors or omissions in the guide. Landgate does not accept any liability for any loss or damage incurred as a result of the use of, or reliance upon the information provided in this guide or incorporated into it by reference.

1. General

Recent amendments to the STA affected single tier strata scheme merger and conversion options in the following ways:

Relocation of the provisions in Part II Division 2A and Part III Division 3 to Schedule 2A of the STA, except Part II Division 2A subdivision 3.
Matters in Part 2B and 2C of the Strata Titles General Regulations 1996 (STGR 1996) being contained in Schedule 1 of the Strata Titles (General) Regulations 2019 (ST(G)R).
Forms prescribed in STGR 1996 being approved forms for the purposes of the STA.
In ST(G)R clause 6G a merger sketch plan is now to accompany the Merger of Resolution of Buildings (see section 2 of this guide).

The STA continues to make it easier to remove or reduce the amount of common property in a strata scheme by the use of merger and conversion options (in this paragraph referred to as the Options). All of the Options available for this purpose are outlined in this guide.

The use of the Options is subject to the following conditions:

They only apply to single tier strata schemes which are registered at Landgate before 1 January 1998.
- A single tier strata scheme is a strata scheme in which no lot or part of a lot (except for a permitted boundary deviation as set out in Schedule 1, clause 3 ST(G)R) is above or below another lot.
As long as the scheme is registered before 1 January 1998, they can be used at any time.
Each of the Options can only be used once (i.e. after using the merger of buildings option, a strata company can still use the merger of land and/or conversion to survey-strata options at any time in the future).

The Options are brought into effect by the lodgement of the appropriate Notice of Resolution and any accompanying documents at Landgate. The approved forms are available from Landgate’s corporate website.

Note: If there is a dissenting vote the strata company (or other owner in a two-lot scheme) can apply to the State Administrative Tribunal (SAT) for an order that the resolution has been passed. A copy of any relevant order made under section 200 of the STA certified by the SAT as being a true copy (if applicable) must be presented with the Notice of Resolution in this case.

Registration fees are payable on taking advantage of any of the Options. Where a Disposition Statement is to be lodged with the Registrar of Titles, it must always be submitted first to the RevenueWA for assessment for duties tax regardless of whether or not money is paid or other consideration is given for redistributing the common property.

Under each of the Options, the lot numbers and the plan numbers will not change, and no new lots may be created.

Any reference to registered proprietor or proprietor means an owner of a lot in the scheme as defined by the amended STA.

1.1. Former Automatic Merger of Buildings that are Common Property

Previously, under the former section 21M of the STA, the buildings (common property) shown on the strata plan automatically converted to individual ownership (i.e. become included into each respective lot) for single tier strata schemes with 2 to 5 lots on:

20 July 1997 for strata plans registered before 20 January 1997; or
6 months after the registration of the strata plan, if it was registered between 20 January 1997 and 31 December 1997

unless any proprietor within the strata scheme lodged an objection with Landgate.

Where the automatic merger of buildings that are common property applied to a strata scheme, the Registrar of Titles recorded on the strata plan that the boundaries of lots are fixed by section 3AB and amended the plan accordingly.

If no objection was lodged and an automatic merger of a building had taken place, it was possible, in exceptional circumstances, to have the buildings revert to common property by an order of the SAT (see former s.103P of the STA).

This automatic merger is no longer available.

2. Merger by Resolution of Buildings that are Common Property

This paragraph needs to be read in conjunction with section 1 of this guide.

A strata company of a single tier strata scheme may, by resolution without dissent (or unanimous resolution in a two-lot scheme), agree that the whole of the buildings shown on the plan will be within the lots. This means that all of the owners in the strata scheme will individually own all of the building that they occupy.

If there is a dissenting vote, the strata company (or other owner in a two-lot scheme) can apply to the SAT for an order that the resolution has been passed.

A Notice of Resolution of Merger (in this paragraph referred to as the Notice of Resolution) lodged in the approved form must indicate that it is a “Merger of buildings” and must be signed by either:

two members of the council of the strata company using the common seal; or
two persons on behalf of the strata company without the common seal (authorised under section 118 STA); or
all of the registered proprietors in a 2 to 5 lot single tier strata scheme (except a strata scheme the plan for which provides that clause 3AB does not apply to the scheme).

The Notice of Resolution must be lodged at Landgate so that the change is properly recorded on the strata plan. Lodgement fees apply.

On registration of the Notice of Resolution, any registered encumbrances or caveats lodged against a strata lot shall, by operation of law, be deemed to extend over that part of the common property that now forms part of the lot.

2.1. Documents to be Lodged with the Notice of Resolution

The Notice of Resolution cannot be lodged within 60 days of the passing of the resolution and is to be supported by the following documents:

A sketch plan showing in the approved form how the strata plan is to be amended (see Schedule 1 clause 6 ST(G)R).

3. Merger by Resolution of Land that is Common Property¹

¹[Guide updated on 27/05/2020 to correct order of content from section 3 onwards]

This paragraph needs to be read in conjunction with what is contained in section 1 of this guide.

3.1. General Information

A strata company of a single tier strata scheme may by resolution without dissent (or unanimous resolution in a two-lot scheme) agree that the strata plan be amended in one or more of the following ways:

to reflect any extension or alteration of a building shown on the strata plan;
to include a building not shown on the strata plan; and/or
to merge land that is common property into a lot.

The purpose of the above-mentioned amendments is to give to the owners of lots in the scheme individual ownership of all of the buildings and land that they occupy and to update the buildings shown on the strata plan.

If the resolution is to include buildings not shown on a strata plan or to reflect any extensions or alterations to a building shown on a strata plan, at the time that the resolution was passed there must have been:

a building licence under s.37 4 of the Local Government (Miscellaneous Provisions) Act 1960 or a building permit under the Building Act 2011; and
the approval for the building by the strata company or all of the owners of lots in the scheme .

If the resolution is to merge land that is common property into a lot, the resolution is to specify any easement that is to be created in the terms of Schedule 2A clause 21W 'Creation of easements for parking etc' of the STA (see below under the sub-heading Easements Created under clause 21W).

A Notice of Resolution of Merger of Land (in this paragraph referred to as the Notice of Resolution) in the approved form must indicate that it is a "Merger of land " and be signed by either:

two members of the council of the strata company using the common seal; or
two persons on behalf of the strata company without the common seal (authorised under section 118 STA); or
all of the owners in a 2 to 5 lot single tier strata scheme (except a strata scheme the plan for which indicates that Schedule 2A clause 3AB does not apply to the scheme) .

3.2. Documents to be Lodged with the Notice of Resolution

The Notice of Resolution cannot be lodged within 60 days of the passing of the resolution and is to be supported by the following documents:

A sketch plan showing in the approved form how the strata plan is to be amended (see the STA at Schedule 2A clause 21T 'Documents to accompany notice' and Schedule 1 clause 7 ST (G)R).
A new Schedule of Unit Entitlements (1-22 lots) or Schedule of Unit Entitlements(1-100 lots) or Schedule of Unit Entitlements(1-200 lots) or Schedule of Unit Entitlements (1-300 lots) or Schedule of Unit Entitlements (1-400 lots) if any change in unit entitlement has occurred.
Consent Statement- Registered Interest Holders and Caveators - Where the unit entitlement of a lot is to be decreased, the written consent of every person who has a registered interest or is a caveator (other than the owners) in respect of that lot must be obtained and attached to this form.
Every transfer or other document that is necessary to give effect to the Notice of Resolution must be lodged for registration with the Notice of Resolution.

Note: A disposition on Merger of Land (in this paragraph referred to as the Disposition Statement) may be filed instead of the transfers and other documents that are necessary to give effect to the Notice of Resolution (see below).

3.3. Disposition Statement

ST(G)R at Schedule 1 clause 9 ‘Merger by resolution of land that is common property — disposition statement’ makes provision for a Disposition Statement to be lodged with the Notice of Resolution.

The purpose of the Disposition Statement is to:

merge the common property or portions of the common property with a strata lot or lots without the need to lodge transfers for the portions involved; and
redefine the extent of existing encumbrances registered or caveats lodged against a lot that has had its area increased without the need to lodge new documentation.

A Disposition Statement must be lodged simultaneously with the Notice of Resolution and must always be submitted to the RevenueWA for assessment for duties tax prior to lodgement with the Registrar of Titles, regardless of whether or not the Consideration panel in the Disposition Statement shows that one or more owners of lots have paid money or given other consideration to acquire ownership of more of the common property than they previously occupied. Registration fees apply.

A Disposition Statement on Merger of Land or Conversion to a Survey-Strata Scheme lodged in the approved form must be signed by:

two members of the council using the common seal; or
two persons on behalf of the strata company without the common seal (authorised under section 118 STA); and
by all of the owners of the lots in the scheme; and
by every person (other than the owner) who has a registered interest in or is a caveator in respect of any lots in the scheme in respect of which the unit entitlement is being decreased. If the consent is not endorsed on the form, then written consents must be attached to the Consent Statement - Registered Interest Holders and Caveators (which can be the same consent statement filed in the Notice of Resolution) and must clearly describe the nature of the consent (see the reasons listed on the consent statement for wording that may be used).⁵

⁵[Guide updated on 17/07/2020 to expand information in final dot point above}

Note: The Disposition Statement may not effect:

a change of the owner of a lot on the strata plan, from the owner of that lot on the plan as previously registered;
the complete release, removal or discharge of an encumbrance or caveat or the release, removal or discharge of an entire interest in an encumbrance;
the registration of any registered interest (other than as owner) or the lodgement of a caveat, in respect of a lot or the common property if a part of that lot or the common property was not previously subject to that registered interest or caveat; or
a change of any person having a registered interest in any encumbrance registered or the proprietor of an interest the subject of any caveat lodged, in respect of a lot or the common property.

In these circumstances appropriate documents must be lodged.

3.4. Easements Created under Schedule 2A Clause 21W of the STA

The sketch plan referred to above may provide for easements relating to motor vehicle access, parking or turning.

This easement is created under section 33 of the STA with the modification that the easement will take effect on the registration of the Notice of Resolution.

A Consent Statement - Registered Interest Holders and Caveators ⁶^*is required together with the written consent of any owner of a lot affected by the easement.

⁶[Guide updated to amend Consent statement from Designated to Registered Interest Holders]

Section 33(6) of the STA applies to the discharge of these easements by registration of an amendment of the scheme plan to give effect to the discharge of an easement.

Note: For more information on the creation, discharge or variation of these easements see EAS-01 Easements.

3.5. Effect of Registration of the Notice of Resolution

The Notice of Resolution must be lodged at Landgate so that the changes are properly recorded on the strata plan.

On registration of the Notice of Resolution:

If any land that merges into a lot was subject to any registered exclusive use by-law, that exclusive use ceases to have effect;
A lot that has been enlarged or diminished as a result of the merger of land is subject to any encumbrance that was registered or caveat that was lodged against that lot; and

Each lot or part of a lot that becomes common property vests in the owners of the lots to be held by them as tenants in common in shares proportional to the unit entitlements of their respective lots, and that owner’s share in the common property is subject to any encumbrance registered or caveat lodged in respect of the owner’s lot.

4. Merger by Resolution of Common Property including both Buildings and Land

This paragraph needs to be read in conjunction with what is contained in section 1 of this guide.

A strata company of a single tier strata scheme (except a strata scheme where the plan indicates Schedule 2A clause 3AB does not apply) may by resolution without dissent (or unanimous resolution in a two-lot scheme) agree to a merger of common property that includes both buildings and land.

A Notice of Resolution of Merger (in this paragraph referred to as the Notice of Resolution) in the approved form must indicate that it is a “Merger of buildings and land” and be signed by either:

two members of the council of the strata company using the common seal; or
two persons on behalf of the strata company without the common seal (authorised under section 118 STA); or
all of the registered proprietors in a 2 to 5 lot scheme (except a strata scheme where the plan indicates that Schedule 2A clause 3AB does not apply).

4.1. Documents to be lodged with the Notice of Resolution

The requirements for registration of the Notice of Resolution are exactly the same as the requirements for a Merger by Resolution of Land that is Common Property (see section 3 of this guide).

5. Conversion of Strata Schemes to Survey-Strata Schemes

This paragraph needs to be read in conjunction with what is contained in sections 1 of this guide.

5.1. General Information

A strata company of a single tier strata scheme may by unanimous resolution resolve that the strata scheme is to be converted to a survey-strata scheme.

Note: It is not possible to increase the number of lots in the conversion to survey-strata scheme, nor change the tenure from freehold to leasehold.

The resolution is to specify:

any easement that is to be created in the terms of s.33 of the STA as amended; and
the height and/or depth limits of the lots, if any.

A Notice of Resolution of Conversion to a Survey-Strata Scheme (in this paragraph referred to as the Notice of Resolution) lodged in the approved form must be signed by:

two members of the council of the strata company using the common seal; or
two persons on behalf of the strata company without the common seal (authorised under section 118 STA); or
all of the registered proprietors in a 2 to 5 lot scheme.

5.2. Documents to be Lodged with the Notice of Resolution

The Notice of Resolution is to be accompanied by the following documents:

A survey-strata plan in respect of the parcel that has been prepared and electronically lodged by a licensed surveyor.
If any change in unit entitlement has occurred, a new Schedule of Unit Entitlements (1-22 lots) or Schedule of Unit Entitlements(1-100 lots) or Schedule of Unit Entitlements(1-200 lots) or Schedule of Unit Entitlements (1-300 lots) or Schedule of Unit Entitlements (1-400 lots).
Consent Statement - Registered Interest Holders and Caveators - The written consent to the proposed schedule of unit entitlements must be obtained from every person (other than an owner) who has a registered interest or is a caveator in respect of any lot in the scheme.
Every transfer or other document that is necessary to give effect to the Notice of Resolution must be lodged for registration with the Notice of Resolution.

Note: A Disposition on Conversion to a Survey-Strata Scheme (in this paragraph referred to as the Disposition Statement) may be filed instead of the transfers and other documents that are necessary to give effect to the Notice of Resolution (see below).

5.3. Disposition Statement

In the STA as amended, Schedule 2A Clause 31H 'Transfers etc to give effect to resolution' at subitem (2) makes provision for a Disposition Statement to be lodged with the Notice of Resolution.

The purpose of the Disposition Statement is to:

effect boundary changes to the lots and common property without the need to lodge transfers for the portions involved;
partially remove existing encumbrances registered or caveats lodged against the portion of a lot or common property that is to be included in another lot, without the need to lodge the usual documentation; and
redefine the extent of existing encumbrances registered or caveats lodged against a lot that has had its area changed without the need to lodge new documentation.

A Disposition Statement must be lodged simultaneously with the Notice of Resolution and must always be submitted to the RevenueWA for assessment for duties tax prior to lodgement with the Registrar of Titles, regardless of whether or not the Consideration panel in the Disposition Statement shows that one or more registered proprietors have paid money or given other consideration to acquire ownership of more of the common property than they previously owned or occupied. Registration fees apply.

A Disposition Statement on Merger of Land or Conversion to a Survey-Strata Scheme in the approved form must be:

signed by two members of the council using the common seal; or
signed by two persons on behalf of the strata company without the common seal (authorised under section 118 STA); and
signed by all of the owners of the lots in the scheme; and
signed by every person (other than an owner of a lot) who has a registered interest in or is a caveator in respect of any lot in the scheme. If a registered interest holder or caveator does not sign the form, then written consents must be attached to the Consent Statement - Registered Interest Holders and Caveators (which can be the same consent statement filed in the Notice of Resolution) and must clearly describe the nature of the consent (see the reasons listed on the consent statement for wording that may be used).⁵

⁵[Guide updated on 17/07/2020 to expand information in final dot point above}

Note: The Disposition Statement may not effect:

a change of the registered proprietor of a lot on the survey-strata plan, from the registered proprietor of that lot on the plan as previously registered;
the complete release, removal or discharge of an encumbrance or caveat or the release, removal or discharge of an entire interest in an encumbrance;
the registration of any registered interest (other than as owner) or the lodgement of a caveat, in respect of a lot or the common property if a part of that lot or the common property was not previously subject to that registered interest or caveat; or
a change of any person having a registered interest in any encumbrance registered in respect of a lot or the common property; or
a change in the proprietor of an interest in a caveat lodged in respect of a lot.

In these circumstances appropriate documents must be lodged.

5.4. Easements Created under Section 33 of the STA

The survey-strata plan referred to above may provide for easements to be created under section 33.

The ST(G)R sets out rights and liabilities under short form easements at the following regulation numbers:

31. Vehicle access easement
32. Light and air easement
33. Party wall easement
34. Intrusion easement
35. Pedestrian access easement
36. Easement in gross
37. Easement for utility services

These will take effect on the registration of the Notice of Resolution.

The written consent of all registered interest holders and caveators is required for the creation of any short form easement. Written consents must be attached to the Consent Statement - Registered Interest Holders and Caveators which is lodged with the Notice of Resolution.⁷

⁷[Guide updated to reword paragraph 17/06/2020)

Section 33(6) of the STA as amended, sets out that a short form easement or restrictive covenant is discharged by registering an amendment of the scheme plan to this effect, or by the termination of the strata titles scheme.