The initial period is defined, within the Dictionary of the Community Land Management Act 2021, to be:
initial period —
(a) for a strata scheme—means the initial period of a strata scheme within the meaning of the Strata Schemes Management Act 2015, or
(b) for a neighbourhood scheme—means the period that commences on the day the neighbourhood association is constituted and ends on the day there are owners of lots in the neighbourhood scheme (other than the original owner) the sum of whose unit entitlements is at least one-third of the total unit entitlement under the scheme, or
(c) for a precinct scheme or community scheme—means the period that commences on the day the scheme association is constituted and ends on the day that at least one third of the sum of the total unit entitlement under the scheme consists of one or both of the following —
(i) former development lots in the scheme that are the subject of subsidiary schemes for which the initial period has expired,
(ii) development lots in the scheme that are not owned by the original owner and for which occupation certificates (within the meaning of the Environmental Planning and Assessment Act 1979) have been issued for development on the lots.
Restrictions during the initial period
Certain actions are restricted during the initial period. These restrictions include:
Restrictions on the powers of associations
Section 25 Community Land Management Act 2021 provides that an association cannot do the following, unless authorised by an order of the Tribunal:
incur a debt of an amount in excess of the amount then available for repayment of the debt from the administrative fund or capital works fund,
borrow money or give security for the repayment of money,
make, amend or repeal an association property rights by-law,
add land to the scheme, whether as association property or as a development lot or neighbourhood lot, except in accordance with the development contract (if any) for the scheme.
Restrictions on the powers of a neighbourhood association
As well as the matters listed above, a neighbourhood association cannot do the following during the initial period, unless authorised by an order of the Tribunal (see section 26 Community Land Management Act 2021):
grant a lease of neighbourhood property,
create an easement burdening land within the neighbourhood scheme or a restriction on the use of land within the scheme,
release an easement, or a restriction on the use of land, that benefits neighbourhood property,
dedicate association property,
transfer neighbourhood property except by way of sale to a resuming authority under Part 10, Division 6 Community Land Development Act 2021,
erect a structure on neighbourhood property,
subdivide or create neighbourhood property.
Restrictions on powers of developers
During the initial period the developer must not do any of the following, unless authorised to do so by an order of the Tribunal (see section 27 Community Land Management Act 2021)
convert to association property a neighbourhood lot within the scheme,
subdivide a neighbourhood lot within the scheme.