Login
iscover
The floodgates may well be opened for strata collective sales in NSW, with a landmark court decision ordering the sale of 252 Sussex Street Sydney after the option to sell fielded support from three-quarters of the strata building’s owners.
It’s the first ever court-ordered collective sale, made possible after changes to the Strata Schemes Development Act occurred back in November 2016 and achieved by Colliers International with legal support.
Dentons, the law firm that advised 252 Sussex Street’s Owners Corporation, said that the legislation enabled the sale or redevelopment of strata properties on a threshold level of support of 75 per cent of owners, subject to approval from the state’s Land and Environment Court.
Dentons explained that under the act, if an Owners Corporation has at least 75 per cent of lot owners in a strata scheme approve the sale of the building, it can apply to the court for an order approving and requiring the sale of all lots.
The court is required to approve the sale if certain criteria are satisfied, including the compensation payable to each owner, and that the sale is just and equitable in all the circumstances, it was reported.
Commenting on the landmark ruling, Colliers International’s head of hotels, Gus Moors, said the Owners Corporation capitalised on the change to the act and the strength of Sydney’s hotel market, choosing to divest an extremely well-located property in Sydney’s burgeoning western corridor.
Karen Wales, a director for transaction services at the commercial real estate firm, said strong bidding on the property showed parties were “clearly not dissuaded by this untested legislation”, and named Yeh’s Group as ultimately becoming the successful purchaser.
Dentons real estate partner Chris Fabiansson called the decision “a great result for a fantastic group of owners who have worked hard over a two-year period to achieve a collective sale”.
Adding to the commentary, the firm’s planning and environment partner, Christina Renner, said the judgment was “a particularly significant achievement because it’s the first time the court has had to consider this legislation in detail and it is the first successful use of the legislation to enable the collective sale of a strata building”.
“The existence of the legislation has helped other groups reach 100 per cent agreement without going through the whole court process, but with 159 lots that was not possible in this matter,” she continued.
Moving on from the court’s decision, Ms Renner said there is an expectation that market perceptions around strata collective sales will shift, “and more Owners Corporations will see the opportunities that are now open to them”.
Newsletter
