Collective Sales of Strata Schemes in NSW: How the 75% Strata Renewal Process Actually Works

What Is a Collective Sale

A collective sale or strata renewal is when the owners in a strata scheme agree to sell their lots and the common property together, usually to a developer who plans to redevelop the site.

The process is governed by Part 10 of the Strata Schemes Development Act 2015 (NSW). It allows owners to end a strata scheme and sell the entire site even if some owners do not agree, provided certain procedural requirements are met.

The 75% Rule – It Is Based on Unit Entitlements, Not a Headcount

To move ahead with a collective sale at least 75% of the total unit entitlements in the scheme must support the proposal.

That means it is not one vote per owner. It is weighted according to each lot’s unit entitlement as shown on the strata plan. If a lot has co-owners, all co-owners must agree for that lot to count as supporting.

So, while most owners might be on board the numbers need to stack up legally. Getting an experienced property lawyer in NSW involved early helps ensure the count and the documentation are valid.

Step by Step: How the Strata Renewal Process Works

1. The Strata Renewal Proposal

Any owner or a potential developer can put forward a strata renewal proposal to the owners corporation.

At this stage engaging an experienced property law firm is critical. A lawyer can help prepare the proposal correctly, explain the implications to owners and ensure the requirements of the Strata Schemes Development Act are followed from the outset. Mistakes here often derail the process later.

If the owners corporation sees merit in the proposal it can vote to form a Strata Renewal Committee (SRC) to explore the idea further.

2. The Strata Renewal Committee

The SRC is essentially a working group that investigates, negotiates and prepares a draft strata renewal plan.

3. The Strata Renewal Plan

Despite the name this is not a survey or map. It is a detailed legal and financial document that includes valuation reports, a draft contract of sale and supporting material.

Because of the technical requirements and potential for challenge the plan should always be prepared in consultation with lawyers experienced in collective sales. The plan must comply with Part 10 of the Act and be fair to all owners including dissenting ones.

4. Reaching the 75% Threshold

If owners representing at least 75% of the total unit entitlements sign support notices the plan can proceed.

The owners corporation lodges the plan with NSW Land Registry Services which issues a certificate of eligibility allowing the matter to move towards Court approval.

5. The Land and Environment Court Process

If all owners agree the Court does not need to be involved.

But where there are dissenting or non-responsive owners the owners corporation must apply to the NSW Land and Environment Court for approval of the strata renewal plan.

The Court will review the process to ensure it was conducted lawfully, that all owners are treated fairly and that no one is being forced to sell for less than fair market value.

The litigation process can be complex if dissenting owners continue to oppose the sale. However, in practice, many disputes are often resolved through negotiation before reaching a full hearing. Having a property lawyer with collective sale experience is invaluable here!

Common Pitfalls (and How to Avoid Them)

1. Using the wrong professionals

The most common mistake is failing to engage professionals with actual experience in collective sales. The process is highly technical and even well-meaning strata managers or generalist lawyers can miss key procedural steps.

2. Misunderstanding the 75% rule

It is based on unit entitlements not the number of owners and co-owners must act unanimously.

3. Skipping procedural steps

Strict notice and timing requirements apply at every stage. If you miss one you may have to start again.

4. Underestimating valuation issues

Every owner must receive at least market value for their lot. Independent valuations are essential and must be handled properly to satisfy the Court.

Why Owners Choose Collective Sale

For many strata owners particularly in ageing or high maintenance buildings a collective sale offers a clean coordinated exit often at a premium compared to individual sales.

Developers are willing to pay more for an entire site especially if it is well located and zoned for redevelopment. For owners it is often the most financially efficient way to realise the land’s true value while avoiding ongoing repair and compliance costs.

Thinking of a Collective Sale Let’s Talk

At Jaide Law, we help strata owners across NSW navigate the collective sale process with confidence. From preparing compliant proposals and renewal plans to guiding owners through negotiations and if needed the Court approval stage our team ensures each step is handled correctly and efficiently.

If you are exploring a collective sale or need guidance on how to start the process, we would love to help.

Contact Jaide Law today to speak with an experienced property lawyer NSW who can help your owners corporation take the next step safely and strategically.

Disclaimer – We know most of you get this, but just to be clear, the information above is general and does not consider your unique situation. Please do not rely on it as a substitute for professional advice. We strongly encourage you to seek appropriate guidance for your specific needs.