Strata Renewal Plan NSW
Currently, the law enables the termination of a strata scheme only with unanimous consent by all owners. With the new Strata Schemes Management Act 2015, which is scheduled to come into effect from 1 July 2016, developers only require consent from 75% of owners to terminate the strata scheme.
A collective sale is the sale of the whole strata scheme, whilst a redevelopment is a significant alteration of the scheme that requires a new strata plan.
The steps required for a collective sale or re-development are:
Step 1: Proposal
A written proposal for a collective sale or redevelopment is to be submitted to the strata committee. The strata committee then has 30 days to meet and consider the proposal. It must be minuted in the strata committee meeting minutes should further consideration be required.
Step 2: Form a Strata Renewal Committee
If the strata committee has decided to consider the proposal further, a general meeting is to be called within 30 days for the consideration of all owners. 50% or more of the owners must agree to pursue the proposal before a specific committee (strata renewal committee) is elected to investigate and develop the proposal.
Step 3: Develop collective sale/renewal plan
The strata renewal committee can appoint professionals (e.g. valuers, lawyers, accountants) to assist in developing a plan that will help owners to make informed decisions. The plan must include the amount that each owner will receive in the collective sale, costs and liabilities that will be borne by the Owners Corporation, proposed settlement dates, arrangements for moving out of the property, and a full and honest statement by the proposed developer/purchaser of their intended use of the property.
Step 4: Consider the Plan
The owners are given at least 60 days to consider the plan and seek professional and independent advice. A support notice is to be signed by owners approving the plan, which will be collected by the secretary of the owners corporation. If insufficient support notices are received (i.e. less than 75% of owners) within 12 months, the plan will lapse.
Step 5: Application to Land and Environmental Court
Approval by the Land and Environmental Court is required for the Strata Renewal Plan to ensure that the process has been carried out properly and any disputes can be resolved through conciliation and mediation. The court is entitled to reject the plan if it is not just and equitable.
Step 6: Lodge order with Registrar-General
Once the court has approved the Strata Renewal Plan, the Owners Corporation must lodge the order with the Land and Property Information (LPI) Registrar-General within 7 days. The date in which the Registrar-General records the plan, is the date in which the order will have effect.
Step 7: Implement Strata Renewal Plan
Each lot owner must sell their lot, as directed by the Court’s order for a collective sale. Once the transfer of all the lots and common property have been registered, the strata scheme will be terminated.
