Even if you do not want to sell your unit to a developer – you may be out voted and forced to sell
Terminate or Renew a strata scheme
From July 2016, to terminate and renew a strata scheme (referred to as Collective Sale and Renewal), only 75% approval will be needed from the strata members. However, a process will need to be followed for this 75% majority to force a change to the unit block.
The Owners Corporation (“OC”) need to opt in to the sale process. 50% or more of the lot owners need to support the decision to opt in otherwise no further action is taken.
The executive committee of the OC then needs to first consider a proposal to sell or redevelope the block then an annual general meeting must be called for all owners to consider the proposal.
If the owners agree to proceed further, they elect a committee to investigate and develope the proposal by appointing valuers, lawyers, developers etc to assist them.
The committee, with help from the professional assistance, then develops a plan which must contain a variety of information such as proposed settlement dates, arrangements for moving out of the block, compensation for owners whether in $ terms or a lot in the new strata.
The owners then get 60 days to consider the plan and seek independant advice should they wish to. Only 75% approval from the owners is needed. If 75% support is not obtained within 12 months, the plan lapses. Any disputes will be pushed to mediation or arbitration to be settled.
If there is 75% approval, the plan goes to the Court for final consideration and the Court has the power to reject the plan if it decides that the plan has not been developed in good faith or proper processes have not been followed.
For the 25% dissenters, the amount that these owners receive will be considered in light of the provisions under the Just Terms Compensation legislation and the newly amended Strata regulations.
Legislation governing these changes:
Land Acquisition (Just Terms Compensation) 1991 Act.
Strata Schemes Management Bill 2015 which should be incorporated into the Strata Schemes Management Act 1996.
Strata Schemes Development Bill 2015 which should be incorporated into the Strata Schemes (Freehold Development) Act 1973.
the corresponding Regulations.