Ten years ago, on the initiative of the then Premier of NSW, the Hon. Bob Carr, my firm was commissioned by The Property Council of Australia and the City of Sydney to advise on the vexed question of terminating strata title schemes for buildings beyond their useful life.
Pursuant to the commission I invented the concept of a “Renewal Plan,” by which a developer, group of owners, or government departments could initiate a formal process of proposing the redevelopment of a scheme with compensation payable to those who don’t want to participate. It is an original concept not found anywhere else in the world by which someone with a plan can instigate a formal process with a view to getting a diverse group to a common goal. Otherwise, people just don’t know what to do and so nothing happens. The concept relied on the government reducing the threshold for termination resolutions from 100% (plus all mortgagees) to something more sensible. I proposed 75%.
Three Premiers on, the Property Council of Australia still endorses my concept as its policy, but politically nothing has happened. Carr was passionate about the urban environment. It seems Morris Iemma, Nathan Rees, and Kristina Keneally had other priorities.
A recent decision of the Land and Environment Court of NSW highlights how important it is that the next Premier of NSW does something about this ticking bomb.
In Marana Developments v Botany Bay City Council (2010) NSWLEC 1237, the owner of a 1960’s building containing 34 flats was refused permission to strata title the block because the court decided that, should the building for which demolition was soon imminent, be owned by 34 separate owners it would make it harder for that block to be redeveloped when its time came. The Court came to this decision despite accepting evidence that the strata title sell down was economically feasible whereas demolishing the building and erecting a new one was not.
The court based its decision on one of the objectives of the Environmental Planning and Assessment Act 1979 being the promotion and co-ordination of the orderly and economic use and development of land. It seems that the State Government can set this as a goal for developers but can’t get its act together to facilitate the same when a proposal has been on the table for 10 years that doesn’t seem to have any real opposition.
Now is the time for us to call on the Premier in waiting, Barry O’Farrell, to see if we can get any commitment from him to take up this important issue.