Strata laws could force unwilling owners to sell

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Proposed changes to strata laws could see unit owners in New South Wales forced to sell their homes to developers if a majority of owners in the building vote to sell.

As it stands under today’s laws all unit owners must agree before a block can be sold.

But a New South Wales government discussion paper asks if it should be easier for a majority of owners in buildings that are past their use-by date to decide to sell out to a developer. A decision could be reached if as few as 75 percent of owners agree, under the proposed changes.

In short, it means if a developer wants your property, the majority of unit owners are happy to take the money and the state can see a benefit in it owners and mortgagees could be moved on whether they want to or not.

Glen Bynes, NSW executive director of the Property Council, told 2GB radio that there had been a push for reform to strata laws.

“We’ve been saying for some time that the existing schemes are well out of date. So it’s time for a fresh look at the laws,” he said.

The proposal has implications for millions of homeowners and established residents across the state, with around a quarter of all NSW residents living, owning or working in a strata building.

“One concern that people have is that developers will march on in and run through a place.”

But Bynes insists that mechanisms are in place to protect home owners, and ensure they get a fair return on the value of their asset.

“A developer is going to have to offer a premium, they are going to have to make an offer that is over and above market value,” he said.

The “collective sale” process, also known as “en bloc sale”, facilitates the sale of the whole strata building to a common purchaser, for example a property developer.

It may come as little surprise that property developers have welcomed the move.

Chris Johnson, chief executive of property development industry group Urban Taskforce, said many buildings constructed in the 1960s and ’70s had reached their use-by date.

“We cannot let one or two apartment owners in an old decaying building hold the rest of the owners to ransom by requiring an inflated sale price,” he said in a statement.

The NSW government is seeking feedback and comments on the options discussed in the paper with submissions closing November 15, 2012. For more information visit


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