Through real estate development, land and the Certificates of Title thereto, are capable of reproducing, by being divided into smaller pieces. The method used to divide a piece of real estate, and its corresponding title, significantly informs the legal obligations surrounding its ownership and management. In Jamaica, real estate can be divided into smaller parcels using two primary methods: subdivision under the Local Improvements Act, and strata titling under the Registration (Strata Titles) Act (“RSTA”). This article delves into some key features and distinctions between these two approaches.

Subdivision of Land Titles

Subdivision is defined as the laying out, or subdivision of land, for the purpose of building thereon, for sale. Subdivision involves using a deposited plan to horizontally divide a parcel of land into smaller, separate parcels, each with its own individual title. This deposited plan is required to be reviewed and approved by the local planning authority, which is generally the Municipal Corporation of the area, as per the Local Improvements Act. Depending on the size and features of a subdivision, the local planning authority may also seek the comments and feedback of other government agencies before approving a subdivision application. 

The legal structures of developments that share common property and amenities, but which do not fall under the Registration (Strata Titles) Act (“Shared Communities”), vary widely, and have been largely dependent on the developer who creates them. Our legislation to regulate Shared Communities, such as housing schemes, townhouse communities, or other subdivisions that share common property, is long coming and overdue. Common legal features of Shared Communities include:-

  1. 1. Restrictive Covenants in common, whereby the titles in the development may share similar covenants that impose restrictions on how an owner may use his lot.
  2. 2. A Homeowners Agreement signed by all owners or purchasers, who thereby agree to abide by certain rules, regulations, and procedures to govern and maintain the community.
  3. 3. A Homeowners Association (“HOA”), incorporated under the Companies Act, which may have the owners or purchasers as its members, and which may be established by, and a party to, the Homeowners Agreement. HOA’s would usually be the entity responsible for enforcing the terms of the Homeowner Agreement against its members, and may sometimes administer and even own common areas or amenities on behalf of the members.
  4. 4. A combination of the above.
  5. 5. A group of owners who come together to form an association, often after the development is completed, that may or may not be a legal entity, to govern the community based on rules that they decide on.
  6. 6. No structure at all.

It is hoped that the legislation will soon be passed to streamline and standardise how these Shared Communities operate. The legislation is expected to appoint a statutory body with responsibility for oversight of these Shared Communities, and to make enforcement of their rules and regulations less onerous and litigious. Until such legislation is passed, where the legal structure governing a Shared Community does not have sufficient teeth, issues such as non-payment of maintenance fees, and owners engaging in activities that run contrary to the rules, may go unresolved and be costly to fight. 

Characteristics of Subdivision in Summary:

  • • Physical Division: The land is physically separated into distinct parcels, horizontally, only. The best way to visualise this is to picture the land being divided by boundaries, walls or fences on the ground, as opposed to being divided under and overground. The owner owns the lot of land and the building on his/her land, and can alter same as he sees fit, within the confines of planning laws, restrictive covenants, and homeowner agreements.
  • • Individual Titles: Each parcel receives a separate title deed, conferring exclusive ownership rights. Owners have sole responsibility for their respective parcels, including maintenance and liability.
  • • May or may not have shared facilities: The titles in these subdivisions may also confer ownership of common areas, and rights to access common amenities such as roads or greenspaces. These shared facilities and amenities may also be administered and/or owned by an HOA made up of the owners in the subdivision.
  • • Regulatory Framework: Subdivision is governed by specific land use, planning laws, and regulations. There is no legislation that is currently in place to govern the administration and management of these developments, but, for some time, Jamaica has been awaiting the passage of the Registration (Shared Community) Bill.

Strata Titles

There has been an explosion in high-rise apartment buildings and town home complexes, not only in the corporate area, but throughout the country. Multi-unit developments are most often titled, and therefore regulated, under the RSTA, by the Commission of Strata Corporations (“CSC”). The CSC is tasked with overseeing strata-living and administration. 

Strata titling involves horizontally and vertically dividing a parcel of land into individual units (“strata lots”), and common property. While owners have exclusive ownership of their strata lots, they share ownership of the common property with other owners in the development, through the strata corporation that is formed upon the registration of the strata plan.

All strata corporations must be registered with the CSC, and are liable to make annual returns, comply with their obligations, and pay a statutory annual fee under the RSTA. The RSTA also prescribes how strata communities are to be governed. This includes requiring proprietors of lots in a strata corporation, to abide by its by-laws, which are essentially the rules and regulations of any given strata.

Characteristics of Strata Titles in Summary:

  • • Vertical and Horizontal Division: Land can be divided both vertically (e.g., floors in a multi-story building) and horizontally (e.g., individual units side by side). Through vertical division of a building, real estate can be created above and below the ground providing for multi-storey division. 
  • • Strata Lots and Common Property: Each unit becomes a separate strata lot, while shared areas like hallways, lobbies, elevators, and gardens, constitute common property. In a strata, the owner only exclusively owns his strata lot, and anything outside of the strata lot, which ends at the midline of the walls, ceilings and floors of the unit, is common area. An owner cannot alter the common area without specific permission to do so. An owner will not be able to extend, or add on to his strata lot without amending the strata plan and gaining certain consents. 
  • • Shared Ownership: Owners hold undivided shares in the common property, managed by the strata corporation. All decisions relating to the common area are made and administered through the corporation. 
  • • Strata Corporation: This legal entity is responsible for managing the common property, enforcing by-laws, and collecting maintenance payments and other contributions from owners.
  • • Regulatory Framework: Strata titles are governed by robust and long standing strata titles legislation, which outlines the rights and responsibilities of owners, the strata corporation and the Commission of Strata Corporations. This makes enforcement of the legislation more efficient and predictable, especially as it provides comprehensive dispute resolution mechanisms that does not require court room litigation. 

Conclusion

The choice between subdivision and strata titles, depends on various factors, including the nature of the development, the desired ownership structure, and the desired limitations on rights of ownership.  It is crucial to consult with legal professionals with specific knowledge and experience in this area to ensure compliance with relevant laws and regulations, and to protect the rights and interests of all parties involved in a real estate development.