Strata Renewals Process – Does Majority Rule?

 

Strata Schemes Development Act 2015

The introduction of the Strata Schemes Development Act (2015) has been met with a fanfare of support by many Strata lot owners.  The changes make it possible for older obsolete buildings to make way to more modern and higher density development.

The Act generally requires development proposal to be tendered and 75% of the Strata Lot owners (calculated by Unit Entitlement) to agree.  This would then activate a process by which the Strata Plan could then be terminated and lot owners rewarded with payment.

It seems relatively fair as a majority of seventy-five percent would elect most governments throughout the known world.  However, any lot owner who objects has the right to have his concerns addressed by the court. The Act then provides provisions (which are currently uncertain) that pertain to the Courts decision making process.  The Court has the right to rule on its interpretation of ‘Just and Equitable in all circumstances”.  The term equitable is defined by terms such as just, right, fair and reasonable.

This provision creates a myriad of possibilities and outcomes that may only be resolved by the Land and Environment Court in a Class 3 matter.  The arguments are likely to be varied and most certainly involve the valuation principles set out within the Land Acquisition (Just Terms) Act 1991.  Issues such as displacement, special value and solatium have long been arguments that now will perpetrate new actions under new legislation.

What might appear on the surface as “Just and Fair” legislation in accordance with democratic principles is likely to provide the Courts, Valuers and the legal profession with a new series of precedents and decisions.

In most cases the legislation will provide a mechanism for gentrification and development with a majority in favour.  It will not as many may suggest be a case where the majority will be able to rule un-opposed.  There is still protection for the rights and fair treatment of any individual where reason and equity can prevail.