28 July 2017
Strata title – Redevelopment of site
Dear Mentor,
I act for 3 owners in a strata with 100 owners.
A developer would like to acquire the entire community, knock down all buildings and rebuild.
My clients do not wish to sell, because they do not agree with the developer's valuation method.
The developer intends to hold a meeting with all owners this week.
I am instructed to present a different valuation method to the owners.
Is it possible for the developer to compulsorily acquire the entire community if the majority owners vote to sell?
There appears to be no special provision in the strata management regulations.
Thanks for the question.
Strata schemes that existed before 30 November 2016 require unanimous consent to a collective sale. However the owners corporation may ‘opt in’ to the new legislation referred to below by passing an ordinary resolution at a general meeting.
Once they have opted in under Part 10 of the Strata Schemes Development Act 2015 a majority of 75% of owners can agree to end, sell or redevelop a strata scheme. Lot owners receive compensation value for their lot. Compensation value is defined in s 154 of the Strata Schemes Development Act 2015 as set out in s 55 of the Land Acquisition (Just Terms Compensation) Act 1991 and Part 6 of the Strata Schemes Development Regulation 2016.
Once the special resolution has passed the owners corporation seeks an order from the Land and Environment Court under s 179 of the Strata Schemes Development Act 2015 to give effect to the strata renewal proposal. The court may approve, make minor amendments to, or reject the plan.
Regards
Mentor
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