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As a personal enterprise, an owner in our block who works for a developer suggests we could double our money by seeking interest from developers to sell the entire block. What are the things to look out for? A rezoning would be required.
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I’m doing this off the top of my head, so forgive me if I miss something out or make a misstep. Unless you have 100 per cent approval from all owners, the process of selling under the strata renewal legislation is long and complicated.
First you have to hold a meeting at which you get majority approval to even explore the issue. At that meeting a committee is formed and they gather proposals and bids from potential developers (all of which could differ greatly). Some may offer discounted apartments in the new block, some may only want to add on to common property, some may just want to buy everyone out and flatten the site. They may all have different ideas of what the exisiting block or apartments are worth.
The committee then presents the options to the owners and then there is a cooling off period of about three months (I think).
If 75 per cent by unit entitlement still agree at the end of the cooling off period, you’ll then need letters of approval from 75 per cent of owners of individual lots.
You can then present the proposal to the Land and Environment Court for its approval. Even at this late stage, individual owners can object and, if their argument is compelling enough, they can scupper the whole process.
What you and your neighbours need to consider is a fairly simple question – will the money you get from the sale of your unit allow you to buy somewhere better in an area where you want to live and will that be worth all the hassle you’d face to get to that point.
One of the most successful renewal schemes in Sydney by-passed the legislation completely when four small blocks in Cronulla combined their resources to offer the developer a much bigger plot and as a result received something like three times the estimated value of their apartments.
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