Strata reform essential for smart city growth
A major shakeup of the nation’s strata title laws is essential as Australia’s cities expand to accommodate a growing population and state governments around the country are moving to bring out-dated legislation into line with the changing strata landscape.
Legislation expected to be tabled in the NSW Parliament this week proposes reducing the ‘termination threshold’ of residents that must approve a building’s buyout from 100 per cent to 75 per cent.
Moving from a unanimous to majority decision will be a “game changer” for urban renewal in both the CBD and the suburbs, says the Property Council’s NSW executive director, Glenn Byres.
“This reform is crucial to Sydney’s evolution as a global city,” Byres says, adding that it will enable more contemporary office stock to emerge as sites are aggregated in Sydney’s CBD.
A quarter of Sydneysiders currently live in strata-titled apartments. Speaking on the ABC’s 7.30 program last week, Property Council chief executive Ken Morrison said we need “a more workable mechanism to unwind a strata scheme at the end of a building’s physical life.”
Victor Dominello, NSW Minister for Innovation and Better Regulation, agreed, telling 7.30: “We want to make sure that we have laws in strata that reflect the 21st century, rather than the 20th century.”
Other states are preparing to overhaul their laws too.
In Western Australia, a review of the state’s antiquated laws has commenced, with the Property Council supporting the proposed introduction of a sliding scale for termination of strata titles based on the age of the building: 95 per cent for buildings up to 10 years old, 85 per cent for buildings 10 to 20 years old, and 80 per cent for older buildings.
Alongside the introduction of majority voting, the Property Council’s executive director in WA Joe Lenzo says the “introduction of the Community Title Scheme will allow an easier pathway for both mixed use and staged development in strata projects.”
In South Australia, an inquiry is underway, with the Property Council preparing a submission to the Environment, Resources and Development Committee’s review in June.
According to Daniel Gannon, the Property Council’s executive director in South Australia, “achieving a unanimous decision from all owners to cancel a strata plan is very difficult, if not impossible to achieve, and is placing financial and safety risks on owners.”
Gannon argues that reducing the termination threshold is consistent with international best practice, pointing to the 75 per cent in New Zealand, 80 per cent in Japan and the United Kingdom, and 90 per cent in Hong Kong.
The Victorian Government is also considering the 75 per cent threshold in its review of strata title legislation expected to commence later this year, with the Northern Territory currently drafting a proposed review.
In the meantime, Australia’s cities continue to expand.
“Building’s don’t last forever,” Morrison told 7.30, adding that it only takes one person to hold out on a development proposal to prevent our strata-titled cities growing and evolving.
“Current laws make it too hard for ageing buildings to be redeveloped.”