If you live in a strata community, it’s important to understand your options when it comes to strata renewal. This is a process for the collective sale or significant redevelopment of the scheme, and because the process impacts all lot owners, there are some strict processes to follow. Read on to determine whether strata renewal is right for you.
What is strata renewal?
Strata renewal is a process whereby a strata scheme (including all lots, buildings, assets and shared areas) is collectively sold, or alternatively, a substantial redevelopment is proposed. Any strata owner can submit a proposal for strata renewal to their strata committee, which can decide whether to take the matter to vote at a General Meeting.
Should the committee decide to table the strata renewal for an Owners Corporation vote, it must do so within 30 days of receiving the proposal. If the proposal to pursue strata renewal receives more than 50% of the majority vote, a strata renewal committee will be elected to further investigate.
Developing a strata renewal plan
It’s important to remember that taking the proposal to a vote and even developing a strata renewal plan doesn’t necessarily mean it has been approved. This is just the first step to exploring whether it is a viable option for your scheme, and that’s why you establish a new committee to investigate.
The strata renewal plan must be an extensive document that includes a lot of important information. Some of the details you need to include are:
- A general overview of the proposal
- A statement by the proposed purchaser or developer on their intended use of the property
- The amounts to be paid to lot owners in the collective sale
- When owners will need to vacate
- A report from an independent valuer
Once the strata renewal plan is completed, it can be presented to the Owners Corporation for consideration at a General Meeting. At this point, the Owners Corporation can amend the plan by ordinary resolution or return it to the strata renewal committee for amendment.
If no amendments are required (or even if they are), the plan can be put to the Owners Corporation for a special resolution, meaning no more than 25% of owners vote against the motion.
Schemes established before 30 November 2016
New laws for strata renewal were established on 30 November 2016. As such, schemes established prior to this will need to opt into the strata renewal process. Schemes established after 30 November 2016 are already covered by the legislation and don’t need to opt in.
Important: Opting into the strata renewal process with the NSW government only means you are eligible to accept proposals, consider them, develop strata renewal plans and go through the entire process.
Looking for expert strata management services?
If your strata committee has received a proposal for strata renewal and you’re unsure how to approach it, More Than Strata is here to help. We offer professional strata management services and can assist with advice on specific strata matters. With years of experience and a comprehensive understanding of strata law, you can rest assured your scheme is in safe hands with us. Contact us today for more information.