What happens when old units reach end of life?

P

Phiber

Hi guys,

I was wondering about something I hope you guys can help with:
What happens when you own a unit in an old unit block when it reaches end of life? Say a unit block built in the 60s in 30 from now has developed a structural problem of some sort. What happens then? With a freehold, you can knock down and rebuild, how does it work in a strata plan?
I guess same issue with duplexes, townhouses and such.

Keen to hear your thoughts!
Cheers
 
Under discussion in NSW http://www.propertyobserver.com.au/residential/the-war-on-strata-law-are-apartment-owners-the-housing-market-s-second-class-citizens/2013111666367. Contrary to the previous opinions, currently I don't see that the OC has any option other than to maintain the building regardless of cost unless all the owners agree otherwise.

My flat is one in a tower of 450, and the complex includes 20+ shops, offices, a medium-rise office building and 100 unit Quest building. At some point down the line (not in my lifetime) it will reach a stage where maintenance is uneconomic but how it will get unscrambled I can't imagine.
 
On a complex of our size there should never be a requirement for special levies since the OC is required to have a long term maintenance plan and finance it accordingly. But it's not too far fetched to imagine in 50+ years that replacement of lifts, major services, spalled concrete, time-expired facades and the rest could lead to a situation where a flat brings in (in 2014 $), $20K, and the outgoings are this or more - i.e. flat is as good as worthless. And at that point overseas owners just stop paying and invite the OC to foreclose ...
 
OP, at present a developer requires close to 100% owner approval to demolish & redevelop. Fair Trading is currently looking at strata reform in NSW and especially this requirement (lowering it to 75%). Many older blocks date back to 1930's (company title) and early strata schemes in the late 60's & 70's are due to be redeveloped.

In some areas, LEPs have changed allowing greater densities as well putting more pressure on redevelopment of 2/3 storey walkups into 6-10 storeys.
 
Thanks guys, interesting feedback.
For long term holders, this could potentially be a worry.
Something to keep in mind I guess!
 
One of my IPs was 80 years old in Sydney with no problems and I have seen 700 year old IPs so I guess it depends on the quality of the original build.
Unfortunately it seems modern constructions are not as resilient as those built generations ago.
 
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