11 Jun 2017 Melbourne Unit Owners Could Be Forced To Sell Their Homes To Developers
“Decaying” old apartment buildings around Melbourne could be demolished and sold to developers under proposed reforms that could see people's homes forcibly acquired.
As it stands, any plan to sell a building must be approved by 100 per cent of owners, making sales of ageing apartment complexes near impossible.
Mortgage broker Clint Bravo is angry that one dissenting owner is preventing the sale of his St Kilda Road apartment block. Photo: Penny Stephens
The Andrews government is considering reforms that could result in the voting requirement for sales and redevelopments reduced to as little as 75 per cent.
While these laws would likely see the replacement of many old “six-pack” blocks built in the 1950s to 1970s in desirable suburbs such as Toorak and South Yarra, there is also concern it would force people to relinquish their perfectly liveable homes at the bidding of their neighbours.
Ageing six-pack flats like this could become the new target of developers. Photo: Domain
Similar laws have already been introduced in New South Wales, but not without controversy, due to fears it could drive vulnerable owner-occupiers, including the elderly, out of their homes.
University of New South Wales strata law expert, Associate Professor Cathy Sherry, said people seemed to have been convinced that they had “some sort of democratic right to their neighbour's property” – but they don't.
“In a liberal democracy I don't think there is any justification for someone to lose their home just because their neighbours will make a lot of money,” she said.
Associate Professor Sherry said such laws should only be welcomed when a building was facing major repairs and further maintenance was pointless.
But plenty of Victorians argue that it is unfair that a single homeowner is able to stymie the wishes of dozens, even hundreds, of other owners. A number of people have made submissions on the planned reforms to the Owners Corporation Act, supporting an 80 per cent vote threshold for a sale of buildings more than 30 years old.
Mortgage broker Clint Bravo has been working with his neighbours attempting to sell a 60-year-old apartment building on St Kilda Road. He says just one of the 29 lot owners is refusing to sell, denying the rest the healthy profits likely to be gained from selling off a block in one of Melbourne's most desirable apartment tower precincts.
Mr Bravo said the building was also riddled with defects, including concrete cancer and significant water leaks.
“The owners can't afford to put the money in. Not everyone is wealthy,” he said. “Everyone wins [from the sale]. If you have one or two people that are being greedy or doing it for their own purposes and holding back development, there is a problem.”
Many body corporate managers also believe it should be easier to redevelop decaying buildings, or older units occupying prime development sites.
“Just as owners in a freestanding house can make a decision to renovate, or to completely rebuild, that's all we are really asking for – that people be given the choice to do what they want to do with the building,” Strata Community Australia Victorian general manager Rob Beck said.
The government's ongoing review of the Owners Corporation Act is exploring a range of different models for easier sale of strata blocks.
One of the models would keep the 100 per cent vote requirement for buildings younger than 15 years, 95 per cent for buildings 15 to 20 years old and 80 per cent for buildings older than 30 years. Another would require the approval of any sale by the Victorian Civil and Administrative Tribunal (VCAT).
A 75 per cent threshold and model similar to that in NSW has the support of the Law Institute of Victoria, as long as VCAT considers the issues raised by minority lot owners before approving a plan.
The Andrews government says it is yet to form a view as its review into Victoria's property laws is ongoing.
Properties likely to be first targeted in any future apartment block sales include walk-up buildings constructed more than 35 years ago in inner South East suburbs including Hawthorn, Richmond, South Yarra and Toorak.