Massons is regarded as one of Australia’s leading experts in strata property law. We specialise and have current transactional experience in strata renewal and collective sales. Partner Leisha de Aboitiz, sits on the Real Estate Institute of NSW Strata Chapter Committee, and presents regularly across NSW to industry stakeholders on the strata renewal process, including strata managers, valuers, agents, owners, and lawyers.
What is strata renewal?
It is the new regime in Part 10 of the Strata Schemes Development Act 2015 which was recently introduced to empower a 75% majority to drive:
- The collective sale of a scheme (ie sale of 100% of lots and common property);
- or substantial redevelopment of a scheme.
When does it apply?
It applies to all strata schemes, except those which are subject to a development contract or the Retirement Villages Act 1999 (NSW) or schemes which pre-date the legislation and choose not to “opt in” (by simple majority).
Why is this change significant?
Under the former legislation, a scheme could only be terminated with unanimous lot owner consent or by way of a court order -– this meant that the minority held significant power. Historically, a single lot owner could frustrate termination, sale or renewal, despite general agreement. The new regime gives the power back to the majority by providing a new pathway to collective sale or redevelopment by requiring only 75% of lot owners to be on board.
Is strata renewal right for your scheme?
Strata renewal is viable for schemes where:
- there is a 75% majority interested in pursuing strata renewal (75% of lot owners and 75% of unit entitlements);
- the scheme is currently under-utilised; and
- individual lot values can be significantly increased by redevelopment or collective
- sale (ie selling all lots in “one-line” rather than individually)
Want to know more?
Contact Massons today to find out more.
Phone: 02 8923 0900
Further articles of interest:
Strata Renewal – Enter the Valuer – Interview with Opteon Property Group
Majority Rules – Terminating NSW Strata Schemes without unanimous consent
Strata retail owners take note – Strata changes will impact you -Shopping Centre News
Can a dissenting owner recover GST?