Strata shake up to benefit investors and developers
Property investors and developers have reason to rejoice after the Western Australian government announced that it would proceed with a major overhaul of the state’s outdated strata title system.
The reforms aim to deliver a more flexible model for property investors, buyers, developers as well as for residents and tenants.
The overhaul will see a number of changes including:
– The introduction of two new types of strata titles (community and leasehold)
– More flexibility and simplification of staged strata developments
– Requirements for sellers to provide buyers with specific strata information prior to purchase
– Improved management through clearer roles of strata companies, councils and managers
– Faster dispute resolution
– Lowering the threshold for termination of strata schemes from 100% to 75% of majority of owners
As well as lowering the threshold for the termination of strata schemes, one of the key changes is the introduction of the community title scheme.
This will allow multiple strata schemes to be managed individually under one umbrella management structure, and is particularly beneficial for mixed-use buildings with a combination of retail, residential and office space or where common property needs to be restricted to one group of users.
For example, take an apartment complex with three buildings but only one building has access to a pool. The community title will allow one scheme for the common areas used by everyone, such as common driveways, and a separate scheme for the individual needs of each building.
Another benefit of the new legislation is the ability to terminate old strata schemes and redevelop underutilised sites. Previously it required 100% agreement from all strata owners, but under the new proposals it will only require 75% of owners to agree.
There are safeguards in place for existing owners to make sure they are compensated. This will mean more underutilised sites are able to be redeveloped.
Minister for Lands, Terry Redman, expects to introduce the changes to state parliament towards the end of 2016 after the Western Australian state government gave approval in January to draft the new bill.
The strata reforms have been more than 2 years in the making after initial concepts were developed in September 2013.
That was followed by a public consultation process in 2014 in which more than 1,100 comments were taken for consideration.