14 Nov 2013 Strata neighbours can be forced to sell
A story from this mornings Sydney Morning Herald impacts NSW strata residents only, but could this law also be introduced into Victoria at some stage in the future? Should the majority be allowed to rule? What of the rights of the individual?
Strata neighbours can be forced to sell under proposed law
A majority of apartment owners will be able to force their neighbours to sell their homes under proposed laws being drafted by Fair Trading.
At present, every single owner in a strata building in NSW has to agree to sell their unit before the strata scheme can be demolished and replaced with a newer building.
But if the proposed laws come in next July, the threshold will be reduced to 75 per cent of owners, say strata industry professionals who have helped formulate the legislation.
With many of the state’s original strata blocks facing the end of their useful lives, it may mean that, in a typical 1960s 12-unit walk-up, two or even three owners will be forced to sell against their will.
Unit owners are forced by strata law to maintain and repair their buildings, regardless of the cost, despite often knowing that developers may be happy to pay a fair price to demolish and replace them with modern, more liveable units.
”Nobody wants to see anyone being thrown out of their homes,” said Gerry Chia, secretary of the Owners Corporation Network, the peak body representing strata owners in NSW.
”But if this can be done in a way that is fair and equitable, with checks and balances that are open and transparent, then it could be a good thing.”
The extinguishment issue has been one of the prickliest dealt with by Fair Trading Minister Anthony Roberts since he took on the mammoth task of updating the strata laws.
The proposal states that, as of next year, it will only require a 75 per cent vote to move everyone out, pull the building down and start again.
According to some sources, the vote will be based on ”one unit, one vote” instead of unit entitlements, a figure related to the size and value of apartments that is the usual basis for major strata decisions.
However, safeguards are apparently planned, including independent valuations, and there is talk of an ”extinguishment commissioner” who will hear appeals against unfair payments.
Meanwhile, developers will be encouraged to be ”creative” in their dealings with apartment owners, such as offering first option to buy deals and assistance with temporary or permanent relocation within their communities.
The argument for urban regeneration is compelling. Many of Sydney’s trendiest suburbs have some of the oldest and least sustainable buildings in them.
Modern building techniques can replace old blocks with more homes that are more energy efficient and better designed for modern living, without necessarily exceeding the building’s footprint or local council height restrictions.
”Sydney’s population is growing rapidly and there’s a need to provide new housing,” said Hazel Easthope of the City Futures Research Centre at the University of NSW.
”So far urban renewal has concentrated on redeveloping disused or industrial land, but that land will soon run out and there will be a greater need to look at renewing existing urban areas.”
Dr Easthope said that any change to the rules would need to be made in a way that was equitable and caused as little disruption as possible to individuals and neighbourhoods.
A spokesman for Mr Roberts said he was not prepared to comment on individual issues until the strata law reform position paper had been released.