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I had a phone call this morning from one of my absent proprietors about a rather innovative proposal that he’s received from a developer, and as he’s one of those (few) that keeps a tight rein on his tenants and always pays his levies on time, I offered to do a bit of research for him via FlatChat.
The background is that my proprietor owns two (2) units in an older block of seven (7) on the South Coast (NSW) where he’s the resident on-site manager, and has all units casually rented on a regular basis generating a good return to his fellow proprietors, who are all part of the letting pool.
My proprietor was introduced to an overseas developer who wants to purchase all seven (7) units, and to then keep the Strata Plan going under the same on-site management arrangements, except that my proprietor would rent-back his unit under some form of new agreement that he hasn’t seen as yet.
The developer’s proposal is conditional on all proprietors agreeing to sell.
The Strata Manager has initially advised that there needs to be a General Meeting of the Owners Corporation, where all proprietors would need to unanimously resolve to accept the developer’s offer.
My interim response to my proprietor was that in the circumstances described, where the developer’s not going to terminate the Strata Scheme (yet), I don’t believe that a General Meeting is necessary other than possibly as a venue for the developer’s proposal to be discussed.
The developer can doubtless purchase the building more cheaply by this mechanism than by a means more conventional, and then at some future time have a General Meeting with himself to resolve to terminate the Scheme.
It all sounds rather innovative to me; the proverbial win-win, but what do you all think? Any downside?