Don’t be afraid of the Strata Renewal Process

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Don’t be afraid of the Strata Renewal Process

By Ivana Hayman and Alyce Kliese

The Strata Renewal regime had legislative reforms introduced in November 2016, by way of the introduction of Part 10 of the Strata Schemes Development Act 2015 (the Act) and Part 6 of the Strata Schemes Development Regulation 2016 (the Regulation). The motivation behind the change was to provide owners of freehold strata lots an alternative way of ending their scheme.

This process automatically applies to all strata schemes registered on or after the 30 November 2016. If a strata scheme is registered before this time, then there is the ability to “opt in” to the regime.

To begin, a collective sale or redevelopment of the strata scheme must be formally proposed in writing to the Owners Corporation (the Strata Renewal Proposal). Any person can make this proposal, so long as it is in accordance with the requirements of the Act and Regulation.

Each step in the process is detailed in the legislative framework and takes some administrative and procedural heavy lifting.

It is important to pay attention to timeframes in this process. The purpose of the timeframes is to enable owners to participate in the decision-making process. Each step is detailed within the Act and Regulation which enables an individual to anticipate each step and prepare accordingly.

The steps generally include the following:

  1. Once the proposal is provided to the Owners Corporation, they have 30 days to consider the proposal (section 157 of the Act).
  2. If a motion is passed by the Owners Corporation that the Strata Renewal Proposal warrants investigation a strata renewal committee must be formed (the Committee) (section 160 of the Act). This decision must be accompanied with a notification of all lot owners in the scheme by the secretary within 14 days of establishment (section 162 of the Act and clause 31 of the Regulation).
  3. The Committee then prepares a Strata Renewal Plan (the Plan), which is a more comprehensive and detailed version of the Proposal, including a valuation.
  4. Upon finalisation of the Plan, notice must be given to each owner of an Owners Corporation meeting, 14 days prior to the meeting (section 172 of the Act).
  5. Each owner must be provided with a copy of the plan and a support notice (section 173 of the Act and clause 34 of the Regulation).
  6. Within 60 days of receiving the materials above, the owners are to complete and return a copy of their support notices (section 174 of the Act). A 75% support requirement for the Plan to be passed.
  7. Once the requisite level of support is met, the owners must be written to within 14 days that the Plan has been approved (section 176 of the Act)
  8. The plan can then be given effect by corresponding with the Land and Registry Services Office to have the Plan registered on title and the Office of the Registrar-General.

In the event of any dissenting owners in the strata scheme, a decision may be made by the Owners Corporation at a general meeting to apply to the Land and Environment Court to give effect to the plan (section 178 of the Act). The Court deals with this under their Class 3 proceedings.

Need help with your dissolving your Strata Scheme or advice in relation to your Strata Lot? Get in touch with Shaw Reynolds Lawyers to discuss the considerations today.

Useful Links:

  1. Strata Scheme Development Act 2015: https://legislation.nsw.gov.au/view/whole/html/inforce/current/act-2015-051#statusinformation
  2. Strata Schemes Development Regulation 2016: https://legislation.nsw.gov.au/view/html/inforce/current/sl-2016-0659#statusinformation
  3. Office of the Registrar General: https://www.registrargeneral.nsw.gov.au/property-and-conveyancing/strata-schemes/renewal-process