Law may force flat owners to sell up

[AYK]

Can someone please advise me about the proposed revamp of strata laws announced in September 2012 by NSW Fair Trading Minister? How does it affect us in investing in apartments in Sydney if the law can allow ''extinguishment'' of strata plans that require a unanimous vote of all lot owners?
Thanks

 

[Ideo]

I think there has been a lot of scare tactics in this one.

It is a rare situation for an investor to refuse a very healthy offer to sell in favour of pushing more and more money into a never ending pot that goes towards the continual upkeep of a building that was never built very well and has serious issues that essentially requires a knock down and rebuild. And that is what it is targetting.

 

[bits1010]

in some places in Asia (i.e. HK), some smart investors will buy multiple units in an very old building, be a slumlord, with the full intention of hoping large developers will buy their share later on to knock down the whole builiding and rebuild (4 floors WWII building become 44 floors high rise).

meanwhile they will make sure that they will have enough influence for the body corporate, so the strata bills will be minimum, and the building will continue to deterioate, geneuine owners who want to sell up cheap and leave and they will buy their units cheap etc etc....

it will take a few years, however the trade off is great. especially when your lending rate is very low.

over there once any party acquired over 80% of all the titles, they can force the others to sell. and the acquisition is complete.

 

[The Y-man]

http://www.news.com.au/realestate/t...-chinese-highway/story-fncq3era-1226522450873

The Y-man

 

[bits1010]

the owner should be very happy, he can operate a road house there, selling fuel, food, roadside services...

developers guarantee business !

 

[AYK]

Thank you all for your comments. We are still worried about the issue of adequate compensation as a result of ‘compulsory acquisition’ if you disagree (i.e. being outvoted). Who is the one who determines the compensation amount? How do ordinary ‘mums and dads’ investors safeguard against developers, especially when they, being small investors, do not have the time and resources to argue their case?

We are planning to buy an investment property (can afford only old apartments) in Sydney. The objective is to hold it for 15-20 years until retirement. The issue of ‘compulsory acquisition’ can disrupt our plan - hence grateful for some further advice.