Tourism Planning Taskforce Report - Western Australian Planning ...

Chapter 6Term of Reference 3comply with the requirements of managedinvestment schemes. The priority for thetaskforce in recommending mandatorycommon management on strategic sites is inensuring a quality tourism outcome.Correspondingly, the taskforce has not soughtto restrict the letting of individual tourism unitsin complexes with a residential component tothe management body only and this mayenable projects to still be operated asmanaged rights schemes.In assessing these competing interests, thetaskforce acknowledged the requirement forintegrated-common management as afundamental component of achievingsuccessful tourism developments under strataschemes, and that these issues should be thefocus of the taskforce consideration, asopposed to how such schemes are treatedunder the Corporations Act 2001. Notingsubmissions to the taskforce on the high costsof ASIC requirements, it was considered thatwhile maintaining its position on integratedmanagement, the development of specificguidelines for serviced strata schemes and amodel format for product disclosurestatements to assist compliance with theCorporations Act 2001 would be beneficial.6.5 Vacant lot strata andsurvey strata schemesThe use of survey strata schemes and vacantlot strata schemes increasingly are beingpreferred by the development sector over builtstrata schemes as they are perceived asclosest to freehold (green) title, providing aresidential marketing advantage. They alsoare recognised as the most effective way toachieve immediate return on initial capitalinvested in basic infrastructure and services.Relative to built strata schemes, this furtherreduces the interest of the developer inensuring that the proposed complex is timedand targeted appropriately in respect totourism demand to ensure the potential forsustainable operation, as a tourism facilityexists. The extent of control over the deliveryof the final product in such developments isdependent upon the nature of contracts withindividual and subsequent purchasers of thevacant lots, and local governmentdevelopment approval conditions. These havenot always been effective in achieving aconsistent tourism product in a timely fashion.Such schemes also are attractive from the realestate perspective, in that they provide afurther advantage in significantly reducedstamp duty payable on the sale of the vacantlots, as opposed to a developed lots. Suchschemes also have the advantage of allowingtourism development to be established withlimited finance and low risk when comparedwith more traditional methods of financing.While this may cause development ahead ofdemand in some project markets, it also canfacilitate development in locations whereotherwise it may not be achieved.Survey or vacant lot strata schemes increasethe difficulty of achieving an integrated andconsistent tourism development over builtstrata schemes and can result in thedevelopment of projects that are marketed,and have the character of a residentialproduct. This is reinforced with the investorpurchasing a lot on which they undertake thebuilding, often with varying levels ofpersonalisation through direct designinfluence. An example of such personalisationin a strata scheme is the incorporation of winecellars within a number of tourism units in adevelopment, a feature that may beconsidered more akin to a residential dwelling.The residential character and ownershipinterest that arise in these circumstances thencan be very high. This is reflected in increasedpressure for residential use, which may bereinforced if tourism returns are not atexpected levels, and can result indevelopments used on a lock-up basis. Thereis a reduced risk of this where suchdevelopments are subject to mandatoryintegrated-common managementrequirements, there is no option for ownerdesign/construction influence, and the createdlots are limited to the building area. In thesecases the benefits of personalisation arereduced as the units cannot be used on aholiday home/lock-up basis.Such schemes also may result in extendedperiods for construction of facilities, reducedtourism amenity and non-viable numbers ofunits for management during this period.Where such schemes are approved, it isnecessary that these impacts are addressedTourism Planning Taskforce Report51