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In our strata we have 25 lots. Lot 27 ( there’s no lot 13 ) is a vacant block of land that can be built on. Some of the owners which to sell it to fund decades of neglect on other parts of the property. My question is_ do we need 100 per cent or 75 per cent of owners to agree to sell the block of land that is part of the common property. Thank you.
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I’m going to quote the relevant section of the Act (S.116) below because it is a little confusing. On the one hand, it appears to allow the Owners Corp to sell its property. On the other it says OCs are not subject to Section 50 (1) (d) of the Interpretation Act 1987 which … allows OCs to sell common property.
You are going to have to consult a strata lawyers at some point on this, so hopefully they will clarify this for you. On the face of it, it looks like you can sell common property and it would only require a special resolution.
However, there is a catch. The capital gain from selling the property may be taxable for individual owners. For example, your strata manager may have to distribute the value (but not the cash) to every owner according to their unit entitlements, with the expectation that they will include this in their tax return.
However, the money gained can only be distributed to owners via a unanimous resolution (no votes against). Otherwise it stays in funds where it can be used for repairs and maintenance or to finance a reduction in levies.
All that said, disposing of unused common property is a good way of funding repairs and upgrades – just be aware of the tax implications.116 Powers to deal with property(1) An owners corporation may dispose of or otherwise deal with any lot vested in the owners corporation as a result of a subdivision effected under section 13 of the Strata Schemes Development Act 2015.
(2) The owners corporation may acquire or dispose of personal property or otherwise deal with personal property of the owners corporation.
(3) Section 50 (1) (d) of the Interpretation Act 1987 does not apply to an owners corporation.
Note—Section 50 (1) (d) of the Interpretation Act 1987 provides that a statutory corporation may, for the purpose of enabling it to exercise its functions, purchase, exchange, take on lease, hold, dispose of and otherwise deal with property.If you want to be alerted when anyone replies to your posts or responds to this topic, please register and login, then you will be able to subscribe to the topic. The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers. NB: Longer threads may spill over to additional pages - look for the numbers on the bottom right, under the last post.