Ability to terminate strata schemes key for growth

| February 22, 2012

The key to managing Sydney’s growth could be found through changing the laws surrounding terminations of strata schemes, according to Urban Taskforce CEO Chris Johnson.

I am coming into this discussion from a big picture look at how Sydney will grow. We will need another 800,000 housing units in the next 25 years but we need a balance between houses in Greenfield; on the fringe and more urban models as infill’s within the existing city. More and more people are trading off location against house size. That is, they prefer a smaller house or apartment closer to the action to a big house on the fringe.

I reckon Sydney could need up to 500,000 of the 800,000 housing units as apartments around existing centres, at transport nodes and along corridors. But this won’t be easy to achieve. Many people in Sydney don’t want more density so we may need to look at areas that have old 1960’s and 1970’s flats that are not well designed and are getting to the end of their life, to become urban renewal areas.

Collective Sale

The current Strata Laws, however, make it impossible to redevelop these areas because 100% of owners must agree to redevelopment. If just one owner doesn’t want to sell up the whole apartment block will not change, it will probably begin to run down due to its age. In Singapore, they have a Collective Sale model where, if a building is more than 10 years old and 80% of owners agree to sell for redevelopment then this can occur. Maybe it should be 75% and of course, all owners should get equal recompense based on the size of their unit.

The Strata Laws need to be changed to allow many inner and middle ring areas to go through a regeneration, just as in many suburban streets, houses are knocked down and replaced with better quality houses. Clearly, there are many other issues that can be improved in the Strata Act but the really difficult change is the one I have outlined for the termination of a scheme to allow urban renewal.

Cities have to change and grow to remain vital but if current residents work against change then they are making it more and more difficult for their kids and their grandkids to find somewhere to live. I know this seems a long way away from the Strata Laws but I think a change to 75% majority to terminate a strata scheme could be the key to managing Sydney’s growth. Of course, there needs to be proper notification periods and proper appeal processes but we do need to think of future generations and allow the city to evolve.


Strata Consultation Questions:

Q1. What are the main areas of the existing strata and community scheme laws you would like to see changed?
Q2. Can you see any future issues that need to be addressed in the legislation?
Q3. How could the management of strata and community schemes be improved?
Q4. Are there any changes needed to the way disputes in strata and community schemes are resolved?