Certainty for developers of Strata and Community Schemes as Santai overthrown

Executive summary

In a judgment given on Friday 24 June 2011, the NSW Court of Appeal overturned the recent case of Santai v The Owners – Strata Plan 77971 [2010] NSWCA 628 (Santai), ending a difficult period of uncertainty for developers of more complex strata and community schemes.

It has been common practice for many years for developers to seek to ameliorate development costs, and reduce future strata and community levies, by providing for individual schemes to share common facilities such as pools, tennis courts and gyms, and increasingly infrastructure such as recycled water treatment plants with other nearby schemes and properties. Such shared facilities are often outside the physical boundary of the scheme, so it has been common practice for the scheme association to be empowered by its by-laws to enter into a shared facilities agreement with the adjoining third party to document the right to use and obligations to upkeep the facilities. The view taken was