Pittwater Life April 2017 Issue

Part 10 of the legislation;
and
n Pay each owner of a lot not
less than the compensation
value of the lot in exchange
for vacant possession
and ownership of the lot
following approval of
the plan by the Land and
Environment Court.
Once the lots have been
acquired and compensation
paid, the owner has no
recourse or right to buy
back into any future
redevelopment.
(b) Pursue collective
redevelopment, which is “a
redevelopment of the whole
strata scheme in a way that
alters the scheme to the
extent that its termination
and replacement by a further
strata plan is necessary”. In
this context ‘redevelopment’
is called ‘collective
redevelopment’ to distinguish
it from ‘collective sale’. This
being so, the developer is
likely to offer to redevelop the
property by undertaking the
following…
In accordance with the
procedure set out in Part
10 of the legislation and in
accordance with the approval
of the Plan by the Land and
Environment Court terminate
the Strata:
n Pay compensation to
dissenting owners
according to the Plan
prepared by the developer
for the lot as if the owner
had supported termination
of the strata scheme;
n Demolish the building;
n Build a new strata title
property in its place; or
n Pay a supporting owner
the profits and rewards
from the sale of the new
property.
The developer may or may
not give the supporting owner
the right to buy back into the
future scheme depending on
market forces. Options 1 and
2 are called “strata renewal”
and apply only to freehold
strata schemes not leasehold
schemes. The new property
may result in the replacement
of strata schemes with either
a new strata scheme built up
to three storeys but requiring
to be built to higher quality
specifications and building
Code of Australia standards
or a new higher quality strata
scheme being more than
three storeys and perhaps
combined with a nearby strata
scheme. As the requirement
of a minimum of 75% lot
threshold, two- and three-lot
strata schemes will continue
to require unanimous
agreement before they can
be the subject of strata
renewal. If confronted by a
proposal for collective sale
and renewal, as explained
above, there is a set process
that applies to protect the
rights and interests of all lot
owners:
Vote to opt into the
process. If the majority of
owners (more than 50%) do
not support the decision, no
further action can be taken;
Initiate the collective sale/
renewal process, which must
first be considered by the
strata committee;
Form a strata renewal
committee and the committee
can appoint professionals,
such as valuers, lawyers, and
tax experts, to assist them;
Develop a strata renewal
plan. The Office of Registrar
General will provide Guidance
material on how to prepare a
strata renewal plan.
Consideration of the Plan,
where owners have 60 days
to consider the plan and seek
independent advice. The plan
lapses if it is not supported
by the owners of at least
75% of the lots within three
months.
Approval of the plan. The
strata renewal plan must
be approved by the Land
and Environment Court
before the collective sale or
redevelopment can proceed.
The steps set out above
may appear daunting to
many owners. It is therefore
important that the correct
processes are followed in
reaching decisions. The Land
and Environment Court will
not approve a plan unless
it is satisfied that the plan
has been developed in the
absence of good faith and the
correct process followed.
The department of Fair
Trading has established
the Strata Collective Sale
Advocacy Service to assist
owners from vulnerable
groups affected by a strata
collective sale or renewal
proposal such as those on the
aged or disability pension.
General inquiries should be
made to: Strata Collective Sale
Advocacy Service (General),
Marrickville Legal Centre, 338
Illawarra Road, Marrickville
NSW 2204 – phone 9559
2899; or the Strata Collective
Sale Advocacy Service
(Older Persons) Seniors
Rights Service, Level 4, 418A
Elizabeth St, Surrey Hills 2010
– phone 1800 424 079.
Comment supplied by
Jennifer Harris, of Jennifer
Harris & Associates, Solicitors,
4/57 Avalon Parade,
Avalon Beach.
T: 9973 2011. F: 9918 3290.
E: jenniferha@pacific.net.au
W: www.jenniferharris.com.au
Business Life
Celebrating 25 Years
APRIL 2017 55