A lower threshold for renewing strata schemes is needed to lift the supply of new housing and office space needed for Sydney’s future growth, according to the Property Council of Australia.
In a new paper released today, the Property Council has unveiled a Strata Title Renewal Plan Process to facilitate greater turnover of strata schemes in NSW.
“Strata title is a popular form of property ownership – and close to a quarter of everyone in NSW owns, lives or works in a strata titled building,” NSW Acting Executive Director Glenn Byres said today.
“Its common use places strata title renewal at the heart of Sydney’s inevitable future growth but we risk being caught in a strata title straightjacket.
“Approval is needed from effectively 100 percent of owners to dissolve a strata scheme, making it virtually impossible to achieve change and renewal.
“We need a simpler and fairer system that will allow ageing buildings to be replaced with new housing and office stock that meets the demands of our growing population.
“The centrepiece of any reform needs to be movement on the threshold for terminating strata schemes.
“Instead of just one person stalling sensible transformation, the threshold needs to be changed so that renewal can proceed if no more than 25 percent disagree.
“Balanced with a system of consultation, fair compensation and dispute resolution, Sydney can secure a much-needed legacy of new housing and commercial offices.”
Mr Byres said the key steps of the Renewal Plan Process were:
1. Allowing termination of the scheme to be initiated by a current owner or third party engaged by owners
2. Preparation of a detailed Renewal Plan detailing the preferred development outcome, building works, DAs required, architectural plans, costs and obligations on all parties
3. Full information on any relevant relocation arrangements required during the life of works.
4. Certification by a Strata Schemes Commissioner on the compliance of the proposal and a minimum three months consultation
5. Owners accepting or rejecting the proposal – with a new threshold that says the scheme is terminated if no more than 25% oppose
6. Independent valuations for owners not wanting to participate in the redevelopment – with one valuer appointed by the opposing owner, one by the owners corporation and those two appraisers agreeing on a third
7. Disputes over obligations under the Renewal Plan being sent to the Strata Schemes Commissioner on procedural matters, and the Supreme Court for orders on matters of law
8. The scheme’s termination sees existing owners retain interests within a new scheme, or transferred by agreement to new owners.
“Some of the oldest strata buildings in Sydney are close to 100 years old and buildings are being pushed past their realistic lifespan,” Mr Byres said.
“We need to free ourselves of the strata title straightjacket and start to expand the housing options available to Sydneysiders as our population inevitably expands.
“Continued renewal and expansion of commercial office properties is also critical if Sydney is going to preserve its position as a global financial hub.”
Media contact: Glenn Byres, NSW Deputy Executive Director, 0419 695 435.