The new NSW strata legislation commenced late in 2016 with the
showstopper reform that owners in a strata scheme can now take part
in a collective sale of the whole scheme on a 75% and above
It would not surprise anyone who has read the legislation that
no group of owners have yet reached the end of the process and
achieved a sale based on a 75% vote. The process is lengthy and
culminates in the Land & Environment Court approving the sale
based on set considerations of equity and fairness.
Of course where 100% of the owners agree to participate in a
sale, it is not necessary to go through the process set out in the
There is strong evidence that the existence of the legislation
(and increased focus on the opportunity) has provided the impetus
for owners to get together and explore a collective sale based on
This is not surprising – some owners see the prospect of
receiving up to double the market value of their apartment. This
can certainly help incentivise groups of owners to put aside any
and all disagreements and reach consensus.
In this surge of excitement and opportunity we thought we would
take the time to provide our observations as to the type of schemes
where the opportunity is the greatest (if you are lucky to be an
Small to medium
sized blocks of apartments.
Blocks which can be consolidated with adjoining land or blocks to
create a larger development site and where there is favourable
Commercial strata properties where residential redevelopment is
greater the number of owners the harder it will be to get
The greatest value will be where the number of potential new
apartments significantly exceeds the number of existing
Mixed use schemes where there are multiple uses (ie retail /
commercial) within the same strata scheme.
Schemes where there are substantial differences in the value of
strata lots and the unit entitlement does not necessarily reflect
Under the legislation a collective sale requires each owner to
receive the same share of the collective sale proceeds, subject
only to unit entitlement apportionment. An operating business in a
strata scheme can be worth far more than this mechanism would value
Schemes where the unit entitlement is not perceived as fairly
reflecting relative value will no doubt attract an argument as to
how proceeds of sale are to be shared.
The real estate team at Dentons Sydney are currently assisting
several groups of owners and developers in facilitating collective
strata sales. If you would like to know more, please contact Chris
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The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
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