A landmark court decision ordered the sale of a Sydney building following the option to approve Strata collective sales with the support from three-quarters of the building’s owners.
The Strata Schemes Development Act 2016 made this first ever court-ordered collective sale possible. The legislation allowed Strata properties to be sold or redeveloped if 75 per cent of owners in the scheme supported. However, the approval from the state’s Land and Environment Court is required.
If certain criteria are satisfied, the court is required to approve the sale. The criteria include:
- The compensation payable to each owner
- The sale is equitable
Steps for collective sale and renewal
Below are the steps from Fair Trading NSW:
- Vote to opt into the process
For strata schemes registered before 30 November 2016, the Owners Corporation must first opt in. If more then 50 per cent of owners are against opting in, the process will not continue.
- Initiate the collective sale/renewal process
If the majority of owners agree, the Secretary should call a meeting for the Strata Committee. At the meeting a proposal will consider whether to sell or redevelop the scheme.
- Form a strata renewal plan
More than 50 per cent of owners must agree to go ahead with the proposal. A strata renewal committee is then elected to investigate and develop it.
- Develop a Strata renewal plan
The Strata renewal committee will then develop a Strata renewal plan. The plan must include a general overview of the proposal, a full and frank statement by the proposed purchaser or developer.
- Consider the plan
The Owners Corporation then elect an independent returning officer to oversee voting on the plan. It is required that owners have at least 60 days to consider the plan. If 75 percent of owners do not support the plan in three months, it then expires.
- Approve the plan
The last step is to approve the plan. Before the strata renewal plan can be carried out, the Land and Environment Court need to approve. If the Strata renewal plan lapses, the Owners Corporation have a 12-month waiting period before they can consider the same or a new plan.
If you are an owner in a Strata property that is costing your Owners Corporation too much in maintenance due to the age of the building, contact SSKB. We can talk you through the most beneficial solutions for your building and your Owners Corporation.