Subdividing in Adelaide - community vs torrens title - property value


I am currently in the process of subdividing from one property into two - one property will have my current PPOR on it, the other property will be a small and sloping backwards block of land. (at this stage I am not sure if I will sell the block of land as it is or build and then live in to avoid CGT)

Originally I applied for a torrens title division and this was approved in the first instance by the council.

When SA water came to do their thing, they advised that they have to do an underground extention, and before they could quote on the costs involved, I would need to get an arbor report as there is a significant tree in the way. Once they received the report from the arborist they would be able to give me a proper quote, because they would know what work was involved(I asked for a ballpark figure because I had no idea - they said $20k). Then if necessary (and i was told it probably was going to be) I would need to apply to the council to remove the significant tree. If they allowed it I would have the expense of getting the tree removed (thousands - it is big) plus the SA Water extention was likely to damage a part of my driveway and im pretty sure removal of the tree would result in the collapse of my neighbours retaining wall (potentially $5k+). Who would've thought a tree could be giving me so many nightmares!

Another option I have is to change my application to community title, so the existing house plus the block of land would both be community title instead of torrens title. I gather this will reduce the value of both properties - does anyone have any opinion on this? the only shared amenities would be the underground SA water stuff (each property would have their own water meters).

What would you do in my situation?

Any thoughts or opinons of any kind would be much appreciated!
Erm, if it has such a big troublesome tree you're going to have to cough up anyway to build on there, aren't you? Builders really don't like putting houses near big trees or trees that have the potential to get big.

And with any kind of title you're still going to need to trench to the back for water, if its not SA water doing it for a meter it'll be you doing it for a house, you can't avoid the need for a water connection.

You may find no matter which option you take, you're up for exactly the same costs regarding the tree.

Food for thought, anyway.
Its hard to explain, but its a corner block, and the tree is on the property with the existing house - thats where they want to run their pipes out from the block of land. So no, it wont be an issue apart from for the torrens title subdivision.

Erm, thanks though
Just curious, what type of tree? Is it a gum? They're notorious for blowing over in severe storms like we've just experienced in Adelaide. Is it near a neighbouring dwelling? Any chance that on a close inspection it could be considered a possible insurance nightmare waiting to happen? (e.g. collapsing on their fence or dwelling?) If so, could be grounds for council to grant permission to remove...
Its not a gum, it has rough dark brown bark and about 6 separate stumps kind of entwined together - big overhang branches. Quite a nice tree, but we had been thinking of removing it because of the rubbish it leaves (did not even consider it a significant tree before SA water mentioned it!)

Thanks for the link, i have added it in my favourites in case I need it.

I take it from everyones replies that you think I should have another crack at the torrens title? I was leaning toward community because it is the "easier option" for me right now (and i dont have the extra $20k for sa water extention) but at the same time am worried what this might do to the value of both properties. Particularly the vacant block because I am planning on putting a nice kind of luxury home on there, either Beechwood or architect designed. It will be small but nice and several levels.. but i wonder if anyone would pay $600k for a small but luxury house on a community title?

Any thoughts? I am in flagstaff hill
Oh and no, the tree is not an insurance nightmare either unfortunately - nice and solid at the base! I know that one of my neighbours a couple of houses away was refused to remove a significant tree and another one was approved, but i dont know the reasons on their applications.
Its hard to explain, but its a corner block, and the tree is on the property with the existing house - thats where they want to run their pipes out from the block of land. So no, it wont be an issue apart from for the torrens title subdivision.
You'd think they could get access from the side road then, without having to go near the tree? How odd ...

Sewer and water locations can be a pain. You sure it was water not sewer? SA water does both, and utility companies tend not to think of creative ways to do things, they just dig really big trenches in straight lines.

As to something really luxury, don't do it unless there are others in the area. Something out of place might be harder to sell for the price you want. Flagstaff hill is reasonably new though and has some pretty posh places so shouldn't be an issue.
I'm going to side track a little here but it's still pretty important to the topic discussed here.

I have an IP on community title in South Australia and the land was subdivided from a corner block so sounds a lot like what you are doing here. I bought the subdivided block and built a house on it which was completed earlier this year. My house has had a blocked drain recently and that's when I found out the sewage pipes of my new house instead of been connected to the main drain on the street is instead connected to the old house of the original block which is still running on terracotta pipes. There was a broken pipe in the old house and because my drain is connect to that house it blocked up my drain as well. According to the plumber, because my house is sitting at the start of the drainage system it will get blocked up first if there's any plumbing issue in the old house. Turns out the next door house is an IP too and they've been calling the plumbers quite a bit lately!

I originally thought it's the builder who connected the pipes this way but after reading this thread I'm starting to think maybe it's the original owner. I'm going to call SA Water to find out more info.

Lee0709, does having torrens title mean you need to set up new pipes for the new block (water and/or sewage) independent of the old house and having community title means both blocks will share the same pipes? This will help me understand what was going on with my block originally so thanks in advance.

So values aside this is something else worth thinking about in regards to your subdivision, especially if you plan to live in either the old house or the new house instead of selling both for profit.
Hi Sydsider,

Yes that is correct - if I went with community title they just connect the underground pipes to the existing pipes so I would say we would possibly have the same issues you are having now at some time in the future. (I looked into it a bit more and it was the sewerage pipes). Community title subdivisions are cheaper because of much lower SA Water fees, for obvious reasons i guess.

We had an arborist come out and we are now just waiting for the report and to hear from SA Water about how much it will cost, and then there is the waiting game from the council. Unfortunately the tree is very healthy and not a danger to anyone or any property but it is not native to the area so who knows - they may allow me to remove it. Heres hoping!

So we are still pursuing the torrens title if we can - yes it means both houses will be totally independent of each other, so nothing shared at all which would be good. Of course you dont think that something like shared plumbing would be too big of a deal but I can see from what you are going through it could probably be a bit of a pain. What happens with plumbing costs, I presume both properties share equally? Is there some sort of "fee" you pay for "management" of the community title annually which covers this sort of thing (that was my understanding from the information I read but most community titles share common areas like driveways etc, so the fee is for maintenance of that area - i guess our situations are not all that common)
Hi Lee0709,

The plumbing problem only happened last week. Because the house is less than 12 months old I contacted the builder thinking they should fix it. To cut a long story short the builder agreed to foot the plumbing bill after lots of distressed phone calls from me. I'm not sure I'll be this lucky again next time as technically the owner of the other house should pay as its his pipe that's broken, problem is, it might be difficult if it's only blocking up my drain and not his!

The only 'common area' I share with the old house is a 1mx3m area next to the front fence. I don't pay any management fee for the community title. To be honest I thought there would be a fee too but there isn't. I think there would be a fee if you share a driveway though. For common area up keeping and possibly public liability insurance etc.

What's the estimated total cost for the subdivision for each title? If the difference is tens of thousands of dollars maybe you could replace all the existing sewage pipes and still come on top with a community title? Just a thought, no idea how practical this is. Also, what sort of time frame are you looking at for the subdivision. I thought about doing it but I'm scared of the holding cost.

I would speak to a RE and get their opinion if community title would affect the value of the house.
I think if you have the same underground pipes as it appears that you do, technically those pipes are shared so the cost should be shared. From what I read about it normally the fee paid annually would kind of be put into a "kitty" for that kind of maintenance on the shared parts of the titles so there would not be issues of who would pay what.. kind of only guessing there because to be honest what I read everywhere was quite confusing!.

Costs vary but for a standard community title subdivision appx $14k and for a standard torrens title subdivision appx $20k (this is through a company that arranges everything for a small fee, great value for money though and I really recommend it at least for the first time you subdivide).

- of course mine has not been standard the whole way - we had a large shed on the land we wanted to divide so as required by the council we had to get a building designer to submit a house design to the council before we could even apply for the subdivision (extra $2k) and now with the SA Water extention which is not normal we are looking at an extra $11k or possibly more (will know when they get the report from the arborist) arbor report appx $500, earthworks to remove concrete etc $4k, fences $3k, fee to remove tree $440 - that is about it so far.. very expensive exercise really so hoping it pays off in the end. As for time frame, we are coming up to a year in October that we first approached the company for the subdivision..I am thinking we will be lucky to be finalised early next year.

The company I have helping me initially advised all up it should take appx 6 months, and I can see that without all the hurdles we have faced this would have not been a problem.

Back to the community title issue - i spoke to a real estate agent who said it depended on the individual property but as a ball park each property would be devalued by appx $10-$20k being community instead of torrens title.
Hi there, it is worth $20K to get the plans approved & subdivision completed. Sounds like your 'project' may cost $30K inclusive of retaining walls & earthworks. If the retaining wall is long, it may cost more. Mine cost 23 thousand + 16K stormwater + 8K fencing but it was a 4 house comm. titled subdivision. The other one like yours [torrens title] cost around 15K.

To get to the subdivision, you'd need DA which means you have to have the house plans approved anyway.

So it's worthwhile to consider building the 2nd house rather than sell the land alone.

Builders are quoting lower prices now because of less people building.

The end value you quoted [600K] is a bit high. I'd try to work on 500K & see what the profit margin is.

I think you'll still make a substantial profit. Even a 2 storey house wouldn't cost more than 250K to build.

Good luck,

Thanks Ky,

Appreciate your input because just recently I was considering just selling the land.

I had been quoted $400k for a house with various levels, but could not justify spending that much on a small block of land - I would then have to spend money on finishing the house off and at the end of the day I dont think I could get the resale value. I have now decided to probably just build a house around $200k and keep it relatively simple, with the intention of keeping it as a rental possibly if that is an option.

Thanks for the luck I will probably need it!!
Lee, what size house are you looking at building?
What area of Adelaide is your property? (don't have to give suburb).
Be careful not to over capitalise if you're just keeping it as a rental. It will be interesting to hear how your project goes. Please keep us updated on your progress.

Hi Gools,

Very small - the land is just over 300m2 but is slightly sloped and quite narrow at the back - a lot of the sales agents for the big builders have not seemed too interested when I have talked to them about it at the display homes. Will be interested to see if that changes from now on though, I guess they have been busy of late with first home buyers.

I'm looking into split level now, as I think it will be a nice block for it.

The land is in Flagstaff Hill- a lovely area, am very happy to be living here!

I don't think much will be happening before xmas but will certainly post an update when something changes!
I'm now slightly concerned about the lack of 'annual fee' on my property.

Sounds like Kum Yin Lau has done a lot of subdivision. From your experience is there always a body corporate and hence body corporate fee for homes on community titles? If so, who applies and set up the body corporate? Do you apply from council? I tried calling the council planning department today but the person isn't usual.

Back to plumbing, according to the plumber I spoke to, as soon as the pipe crosses boundary it becomes the responsibility of the other owner. Don't know how reliable his information is. He was quoting the Australian Standards a lot so maybe it has some truth in it?
The plumber may not be aware of how community titles work.. did you get some kind of manual or paperwork when you purchased the property? When I looked into it this was mentioned and I presume a solicitor or someone draws it up.

I also just had a little look on the net now and there are "community titles" and "community strata titles" - maybe we keep referring to the one that your property is not (if that makes any sense at all). Have a look at the lands titles office website too, I found some information there when I was looking (couldnt make too much sense of it for my situation but you might find it useful).
Hi Lee

I was in a similar position to you a few months ago, except I didnt have a significant tree in the road. I opted to pay the extra to SA water for sewerage extension and go with the torrens title. for my block it is costing just under 12k and I think that the cost without a large extension was about half that.

we had a large shed on the land we wanted to divide so as required by the council we had to get a building designer to submit a house design to the council before we could even apply for the subdivision (extra $2k)

My property is in the same council and has sheds in the new block. I was not forced to do this.. However the sheds need to be removed before SA water can do their thing for the sewer pipes.
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Hi, Lee, you might want to note the other poster who's done a subdivision in your suburb & follow suit asap. Councils vacillate & if I were you, I'll get the paperwork completed the moment they say they approve. Otherwise they might change their mind.

Re the significant tree, it's in your own backyard. There are ways to make it insignificant.

Sysider, I've done both community titles & torrens title, not 'a lot' though.
Re community title, the owner who subdivides has to set up the 'body corp' & fees are decided on the % of land value. So that's what SA Water & etc use to determine the charges such as land tax, ESL & water/sewerage.

There's generally no other fees, unlike strata titles of the past. What the owners should do is to put a small amount of money aside to maintain common areas like driveways etc.

I paid my conveyancer to draw up the bye laws of the community titles & they're there for anyone to read but no one bothers. My houses are 2 years old now & so far, no problems, touch wood.

There're problems eg pavers shifted but because I live on site, I just got some gravel/mortar & solved the problem.

The other owner [in Perth] is good. I've suggested to the manager who happens to be my agent as well that we put aside a small amount eg $5 per month & she was agreeable. But we haven't done it yet as the problem arises who holds the money?

Hope this helps you, Sydsider.