Opportunities from the Strata Act Changes
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As mentioned previously, the looming changes to our current strata titles act here in Western Australia will present several opportunities for prudent investors to secure and participate in unique developments within the Perth property market. By simply being able to amalgamate current Strata Titles and re developing them, underlying land and property to a higher and better use.
Currently under the 1985 Strata Titles Act, it requires a unanimous decision without dissent to undergo specific changes to common property. For example, this means if a current complex has 100 owners and 99 vote yes and one says no, then the matter cannot proceed, under the current legislation.
However, if for example only 50 people say yes, and all other owners remain silent (don’t vote or abstained), then there is no dissent and the matter proceeds on the yes vote.
As you can imagine, one owner holding up all other owners can be detrimental in some situations and the new strata title act (which is currently before parliament) will ensure that provided that 75% of people say yes, the matter can proceed forward even if up to 24% of owners vote no.
This strata act change will therefore ensure greater power to the owners of strata titled properties to capitalise on potential redevelopment or even major upgrades of tired, outdated and underutilised properties. In general, as the city expands the density of dwellings for most building lots has increased, so in keeping with these changed rulings you can unleash the higher plot ratio of these older blocks sitting on the larger under developed blocks of land.
A good majority of these older properties are currently underutilised for plot ratio and offer great potential to redevelop. As highlighted before, certain older strata units in locations such as: Terrace Road Perth, Inner City Perth, West Perth, South Perth and Scarborough, are all areas where the new found law could well pave the way for redevelopment to occur and not be hamstrung with the current unanimous decision without dissent which can see one vote over turn any such action, potentially stifling development potential across all areas.
The same strata laws have been passed in in NSW, there has been several complexes cash in on the new found values of being able to redevelop their complexes to higher density and greater values.
No doubt, everyone will be looking with new vision at some of these older blocks of units especially if they’re located in high profile locations where the blue sky potential may be harnessed, by implementing the new strata laws.
May 11, 2018
Posted in: Blog