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Collective sale and renewal process

Reforms to strata laws commenced on 30 November 2016, providing owners of freehold strata lots an alternative way to end their scheme by agreeing to a plan (a strata renewal plan) allowing for the 'collective sale' or ‘redevelopment’ of their scheme.

What is meant by the 'collective sale' of a strata scheme?

A ‘collective sale’ of a strata scheme means the sale of the whole of the strata scheme in one transaction.

What is meant by the 'redevelopment' of a strata scheme?

A strata scheme is ‘redeveloped’ to such an extent that the existing strata scheme must be ended or wound up and  replaced by a new strata scheme.

Where can I find these laws?

The new laws are found in Part 10 of the Strata Schemes Development Act 2015 (the "Act") and are supported by operational and administrative provisions found in Part 6 of the Strata Schemes Development Regulation 2016 (the "Regulation"). It is important that both the Act and Regulations are read together for details of the required process, including the strict time frames that need to be complied with. 

The strata renewal process provided in the Act includes important checks and balances through a number of key stages to ensure fairness and transparency in the process. 

Do all the owners need to agree?

No, not all owners must agree. The owners corporation must pass a special resolution to give the strata renewal plan to owners for their consideration. The plan must then receive support from the owners of at least 75% of the lots (other than utility lots such as car spaces and storage lots). For example, if there are 20 lots in the scheme (not counting utility lots), the owners of at least 15 of those lots must agree to the plan.

Do the new laws apply to all strata schemes?

No. The strata renewal laws apply to freehold strata schemes. They do not apply to a strata scheme that is being developed in stages or where any part of the scheme is a retirement village. The strata renewal laws do not apply to leasehold strata schemes.  

Strata Schemes registered before 30 November 2016

The new laws commenced on 30 November 2016. The new laws will not apply to existing strata schemes (those registered before the commencement of the new laws) unless the owners corporation first agree by resolution that the laws allowing for the strata renewal process will apply to their scheme.

 

See Steps for strata renewal process for details about the steps that must be followed. 

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