Last year, NSW Parliament enacted significant changes to the
State's strata laws. Amongst these changes, the NSW Government
broke new ground, introducing a whole new part to the Strata
Schemes Amendment Act which relates to the renewal of a freehold
Coleman Greig eagerly awaits more guidance around when these
changes will come into effect and what their impact will be. What
we do know is that some key changes that property investors and
tenants alike will need to be aware of include the following:
A building's Body Corporate can sell the premises with only
75% of lot holders agreeing to the sale. There will be some
entitlement to compensation if you're not part of that
The process will involve the following four steps:
Establishing a Committee and developing a strata renewal
Obtaining relevant approvals for any works
Receiving approval of the Court
Lodging registration with the Registrar General.
Our lawyers have some concerns around what will happen to
tenants who have leases in place if the decision of whether to sell
is being made. Whilst the amendments are clear in so far as how the
interests of registered owners are dealt with, there is no clarity
as to what conversations, if any, the tenant can have.
The amendments merely state that the lease of a lot in the
strata scheme is terminated on the day stated in the strata renewal
plan for giving possession of the lot to the developer or on such
later date as may be specified by the court order. The new laws
also state that lease termination of the lease doesn't affect
what rights or remedies a person may have under a lease.
It's not clear yet what this will mean in practice, and, at
this stage, it's not clear if a tenant has any standing to
object to any such strata renewal plan.
This is why we hope that communications around the relevant
regulations will be key to providing greater insight about the
impact on property leases.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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