Wednesday, May 25, 2022

Strata Collective Sale Process

Strata Collective Sale Process

The Registrar General can end a strata scheme where 100% of owners want to sell or redevelop it.

However if some owners disagree or are unsure, they can follow a strata collective sale and renewal procedure.

A set process applies to protect and consider owners’ rights and interests. Ultimately, for a strata scheme to be sold or redeveloped:

  • owners of at least 75% of the lots in the scheme must agree
  • the Land and Environment Court must be satisfied that this is just and equitable.

For instance, a strata scheme might consider this process if their building is old and needs repairs. The vast majority of residents may prefer to sell instead of paying for extensive repairs.

STEP 1: Vote to opt into the process

The owners corporation must first opt in. This applies to strata schemes registered before 30 November 2016. If most owners (more than 50%) do not support opting in, the process stops.

STEP TWO: Initiate the collective sale/renewal process

The strata committee must consider a proposal to sell or redevelop a scheme. The secretary then calls a meeting of the owners corporation to consider it.

STEP THREE: Form a strata renewal committee

Most owners (more than 50%) must agree to go ahead with a proposal. Next, a strata renewal committee is elected to investigate and develop it. The committee can appoint valuers, lawyers, tax experts and other professionals to help.

STEP FOUR: Develop a strata renewal plan

The strata renewal committee develops a strata renewal plan. This will inform the lot owners’ decisions about the sale or redevelopment. The strata renewal committee and the owners corporation can meet to discuss and further develop the plan.

The plan must include:

  • a general overview of the proposal
  • a full and frank statement by the proposed purchaser or developer. This will state how they intend to use the strata parcel (the building/s and land)
  • when owners must vacate their units
  • the amount each owner will receive. This must be no less than the compensation value for their unit.

An independent valuer’s report should accompany the plan. It will show the market value of the whole strata complex and compensation value of each unit.

Find out how to prepare a strata renewal plan on the Office of Registrar General website.

STEP FIVE: Consider the plan

The owners corporation elects an independent returning officer. Their role is to oversee voting on the plan.

Owners must have at least 60 days to consider the plan and seek independent advice. Owners in favour must give the independent returning officer a signed support notice. The plan lapses within 3 months if the owners of at least 75% of the lots do not support it.

If the required level of support is obtained, the owners corporation may decide to apply to the Land and Environment Court. This involves applying for an order to give effect to the plan. The plan lapses if the owners corporation decides not to apply.

STEP SIX: Approve the plan

The Land and Environment Court must approve the strata renewal plan before it can be carried out. Before approving it, the Court would:

  • consider if the process has been properly followed
  • initially seek to resolve any disputes through conciliation or mediation.

The Court can reject a strata renewal plan if:

  • it was not developed in ‘good faith’, or
  • the process has not been properly followed.

The Court would check on the compensation value for each unit. The terms of settlement provided by the plan must be just and equitable in all the circumstances.

If a strata renewal plan lapses (for any reason), there is delay before the owners corporation can reconsider the plan or a similar one. This is 12 months from the day after the plan originally lapsed.

Advice and advocacy service 

Affected owners from vulnerable groups, for instance on an aged or disability pension, may be able to use a free advocacy service. This service offers support with the strata renewal plan and advice on alternative housing. Read the Strata Collective Sale Advocacy Service page on the Fair Trading website. You can also call us on 1800 214 023.

For information on a proposed collective sale or renewal:

  • owners and interested parties can call us on 1800 214 023
  • contact the Law Society of NSW to find lawyers specialised in property law advice
  • visit the Registrar General’s website for detailed information, including translated information in Chinese, Korean, Vietnamese and Arabic.

© State of New South Wales (NSW Fair Trading). For current information go to

Strataville Editorial
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