One of the most controversial changes to the strata laws in 2016 was the introduction of the 75 percent rule. This changed the voting dynamics within the owners corporation so that for building owners wanting to terminate their strata scheme in favour of redeveloping it, they no longer had to get 100 percent agreement from all owners.
Before the changes, it only took one person to object to the termination of a strata scheme which was hugely unfair and inequitable. The main reason most people want to knock down and rebuild is that the cost of maintaining their old, crumbling building is beyond the value of the building and so replacing it is a sensible option.
To accommodate the population growth that is predicted over the next 20 to 50 years within the Sydney metropolitan area the NSW Government has to find ways to make high-density living work. One of the solutions is to build on brownfield sites, better use of utilities and renewal of aging building stock.
Renewing old buildings has a number of benefits for the community including better environmental efficiency, improved safety and savings in building maintenance.
Many of the buildings from the 1970s and 1980s are not energy efficient and not up-to-date with the current building code and safety standards. Owners simply do not have the money required to make them more efficient and safer. Building renewal achieves this.
A recent story in the Sydney Morning Herald Transformation champions: Meet a new breed of apartment owners remodelling their old blocks provides some excellent examples of how this has worked well on older buildings. The changes are well considered and the way they have been funded is innovative. In one case they unlocked potential to create a few additional units and used the sale of those to fund some of the project.
Consider whether this is something your building might benefit from and how it could work for all owners. To assist you, NSW Fair Trading has set out the steps for collective sale and renewal for owners interested in this process.