[+] ‘Surprise’ Strata Law Reworking Wins Industry Applause

After a decade-long battle, the Queensland government has surprised the industry by announcing its intention to change strata title rules which were constricting property development in the state. The changes will allow the termination of a strata scheme with the support of 75 per cent of lot owners, bringing them in line with New South Wales, which changed its regulations in 2015. Under current rules, 100 per cent of owners must agree,or the District Court may rule to terminate the scheme. The Queensland development industry has criticised these rules as hampering much-needed housing development, particularly on the Gold and Sunshine coasts. ▲ Older, low and medium-density Gold Coast plots could make way for new high-rise residential sites under the changes. The body corporate must agree that it is “more financially viable for lot owners to terminate rather than maintain or remediate the scheme”. In all other situations, termination of a scheme will still require that no owners dissent to the termination in order for it to be approved. The government committed to the reform after October’s Housing Summit, with the aim of ensuring that it would be easier to sell and redevelop ageing or rundown community title schemes in the state. GV Property Group director and principal Antonio Mercuri has been an advocate of changing the strata titles. “It is certainly a move in the right direction. Three owners have called me already from sites we’ve been amalgamating where we weren’t able to proceed before, and now we might be able to,” he says. “They want to get the deal done.” ▲ Antonio Mercuri of GV Property Group says that the move is a “step in the right direction". Similarly, Spyre Group director Andrew Malouf says that when the rules are pushed through, the team would be returning to a number of projects that did not proceed due to the current strata title rules. “For as long as the past decade there has been talk that it should happen for Queensland and that we should replicate the situation in other states,” he says. “So it was a matter of time, but its surprising it’s happened as quickly as it has. “This is great for us as when it comes in, it will open up sites and allow us to re-approach them again. “There will be a lot of other developers out there like us trying to re-engage in site acquisitions that might have previously fallen over because they couldn’t get 100 per cent buy-in.” The industry reacts The news received an overwhelmingly positive response from the industry—Mosaic Property Group director Brook Monahan says they are “broadly very supportive of the change to the threshold”. “At a time of extreme need for new housing supply and particularly infill density, it allows housing to be delivered in key urban areas with existing infrastructure and access to transport and lifestyle amenity, where people really want to live.” But there are some details which remain to be fleshed out, says Mercuri. “How it will be processed with those one or two owners, it will be interesting, it will be interesting to see it works out and it’s great news,” he says. “The main thing, however, is that this doesn’t get abused. For example, if someone is approaching unit owners to put a site together, are they working for the other owners or themselves? “Our company works for the landowner to get them the best price, and if people are wanting to sell they should work with someone other than necessarily the buyer, and make sure it’s run in a beneficial way so they are not forced to do a deal.” Overall, however, it is a hugely positive step by the Queensland government in its attempts to tackle the housing crisis, says Mercuri. “Queensland, particularly in places like the Gold Coast, has a housing supply problem and this is really going to help solve that,” he says. “As long as it’s handled in a way that's fair and reasonable, it will benefit the majority. “It will create density and create more options for developers. It’s a great scenario.” ▲ Spyre Group director Andrew Malouf says there are a number of projects the team will revisit after the changes. Spyre’s Malouf agreed. “The massive undersupply we’re facing has clearly prompted some movement in government,” he says. “We’ve got so many land parcels that are zoned for high-density development that may have had a six-pack of units on it. “These sites could lend themselves to assist in this current undersupply, but when we’ve got a situation where just one owner can say no to the whole thing, there are a lot of sites and projects that suffer.” However, he also says that the sometimes slow process of policymaking meant that it was no sure thing. “It sounds like they are hoping to push this through in the next year and I hope they move quickly enough, because sometimes these legislative notices can take a few years.” Tackling undersupply At the 2022 Housing Summit , the Premier called the housing crisis “the biggest issue facing not only Queensland but the entire nation”. As a result of that summit, which brought together 200 attendees, the government doubled the Housing Investment Fund with an additional $1 billion and declared 34 Priority Development Areas aimed at accelerating developments in key growth corridors. Queensland deputy executive director of the Property Council Jess Caire says the latest measures to come out of that summit will do much to facilitate urban infill and ensure sites are utilised to their full potential. “In Queensland, in particular areas like the Gold Coast there are countless unit blocks that are in dire need of redevelopment, they are small, underutilised and some are beyond repair, posing safety issues for the residents. “These reforms will mean that the vast majority will now be able to wrap up their strata schemes and unlock the capital from their unit and access safe, fit-for- purpose housing.” Other key actions from the summit include investigating ways to progress build-to-rent as a way of diversifying Queensland’s current housing mix, says Caire. ▲ The changes could lead the way for higher quality and density housing to address the current crisis, say developers. Attorney-General Shannon Fentiman told media that stakeholders had made it clear that the scheme termination was a key area for reform. “The government recognises that some owners may not wish to sell their unit or move to a new home so termination arrangements must balance the rights and interests of all lot owners in a scheme,” she says. “The new process will include safeguards to protect owners in the minority who do not support termination. “If the body corporate approves a termination plan, a dissenting owner will be able to make an application to the District Court, which would consider a set of just and equitable factors in deciding whether the termination should proceed. “This is the first of two planned packages of reform for body corporate legislation in Queensland. I intend to introduce the second package of reforms before the end of the year.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] ‘Surprise’ Strata Law Reworking Wins Industry Applause

Want to read more?

Stockland Re-Enters Density in $5bn Apartment Play

Brisbane Developer in Cross River Rail Compensation Tussle

Touch, Taste, Theatre: What’s Driving Mondrian’s Success

Relevant or Redundant: Will Tech Kill Display Suites?

Missing Heart: Why The Gold Coast Needs a CBD

[+] ‘Surprise’ Strata Law Reworking Wins Industry Applause

Want to read more?

Stockland Re-Enters Density in $5bn Apartment Play

Brisbane Developer in Cross River Rail Compensation Tussle

Touch, Taste, Theatre: What’s Driving Mondrian’s Success

Relevant or Redundant: Will Tech Kill Display Suites?

Missing Heart: Why The Gold Coast Needs a CBD

Queensland’s $2bn Push Opens New Housing Front

South Melbourne Housing Precinct Revamp Takes Next Step

Stockland Re-Enters Density in $5bn Apartment Play

Queensland’s $2bn Push Opens New Housing Front

South Melbourne Housing Precinct Revamp Takes Next Step

Stockland Re-Enters Density in $5bn Apartment Play

JQZ Plots 10-Storey Addition to Parramatta ‘Auto Alley’ Plans