Collective Sale: When 75% of Owners Can Sell Your Apartment

A retired couple in a 1970s walk-up had no intention of moving. They had paid the mortgage off years earlier, they liked their neighbours, and the plan was to stay put. Then a developer approached the owners corporation about the site. Within eighteen months, three quarters of the owners had signed on to a renewal plan, the matter was before the court, and the couple were working out whether the compensation would buy them anything comparable in the same suburb. They had voted no at every step. It made no difference to the outcome.

For most of the history of strata title in Australia, that could not have happened. Ending a scheme required unanimity, which meant a single owner could stop a redevelopment cold. That rule protected individuals, but it also left ageing, defect-ridden and sometimes barely insurable buildings stuck in place with no way out. Over the last decade most states have replaced unanimity with a supermajority plus independent oversight. If you own an apartment in an older building on a valuable site, this is worth understanding before a proposal lands, not after.

What a Collective Sale Actually Is

A collective sale, sometimes called strata renewal or scheme termination, is the process of winding up the strata scheme and dealing with the whole site as one parcel. Usually it means selling the building and land to a developer, who demolishes and rebuilds. Sometimes it means the owners redevelop the site themselves.

It is distinct from two things it is often confused with. It is not a developer buying individual apartments one at a time on the open market, which requires each owner to agree and gives everyone a veto. And it is not the same as the Queensland termination rules for economically unviable schemes, which are aimed specifically at buildings that can no longer be sensibly repaired. A collective sale is usually driven by land value rather than building failure, though the two increasingly overlap.

The Threshold in Each State

This is where the detail matters, because the numbers and the safeguards are genuinely different. The position also keeps moving, so confirm the current rules for your state before relying on any of this.

New South Wales. Owners of at least 75 per cent of lots can support a strata renewal plan, which then goes to the Land and Environment Court for approval. This is the most developed regime in the country and the one most often used.

Queensland. A scheme can be terminated with the support of 75 per cent of owners, but only where the building is uneconomic to repair, with an adjudicator required to approve the plan. The economic test makes this a narrower pathway than the New South Wales one.

Western Australia. Since 2020, 80 per cent of owners can apply to terminate a scheme, with the State Administrative Tribunal required to be satisfied the termination is just and equitable and that proper process was followed. Small schemes of four lots or fewer still require unanimity.

Victoria. Termination has continued to require unanimous consent, which leaves a single owner able to block a sale. An independent review of the Owners Corporations Act has examined whether that remains realistic given the state of the ageing building stock, and reform has been widely anticipated. Victorian owners should treat this as the area most likely to change.

South Australia, Tasmania, the ACT and the Northern Territory. Each has its own framework, with thresholds and oversight bodies that differ again. Get local advice rather than assuming the New South Wales model applies.

The common architecture, wherever a supermajority rule exists, is the same: a high but achievable owner threshold, plus an independent body that has to be satisfied the outcome is fair before it takes effect.

How the Process Runs

The New South Wales process is the most detailed and gives a good sense of the shape of these regimes generally.

1. A proposal is submitted. Anyone can put a strata renewal proposal to the strata committee, which must consider it within 30 days. The proposal has to disclose who is behind it and what their financial interest is, and it must carry a prescribed warning notice so owners understand the stakes.
2. Owners decide whether to investigate. If more than half the owners support looking into it, a strata renewal committee is elected to develop the proposal. It can engage valuers and lawyers, within spending limits the owners corporation approves.
3. The plan goes to owners. Owners get at least 60 days to consider the plan before they are asked to commit.
4. Support is formally recorded. Backing a plan is not a show of hands. Each supporting owner signs a prescribed support notice, witnessed, and their mortgagee has to be involved. The plan proceeds when owners of at least 75 per cent of lots have given support, within a three-month window.
5. The court decides. The plan goes to the Land and Environment Court, which checks compliance, scrutinises the compensation, and must be satisfied the terms are just and equitable in all the circumstances. It can refuse a plan that was not developed in good faith.

That final step is the real protection. The owner vote gets a plan to the door of the court. It does not decide the outcome.

What a Dissenting Owner Gets Paid

The most common fear is being paid a fraction of what the apartment is worth. The legislation anticipates that.

In New South Wales, compensation to a dissenting owner must be at least the compensation value of the lot, which is built on market value plus disturbance costs, drawing on the principles used when land is compulsorily acquired. Disturbance costs are meant to capture the practical expenses of being moved on: legal fees, stamp duty on a replacement property, relocation costs. Other states with supermajority regimes apply their own fairness tests, with the tribunal or court checking that owners are not being short-changed.

Two things are worth being realistic about. First, market value is assessed on the apartment as it is, in a building that may be old and carrying defects, not on what an equivalent new apartment would cost you. Where prices have run hard, compensation that is objectively fair may still not replace what you had in the same suburb. Second, being paid fairly is not the same as wanting to move. The regimes are designed to stop owners being financially harmed. They are not designed to let an individual owner stop a redevelopment the overwhelming majority supports.

Is Your Building a Candidate?

Collective sale proposals cluster around a recognisable profile. Your building is more likely to attract one if several of these are true.

• The land is worth more than the building. Low-rise blocks on generous sites in areas that have been rezoned for greater density are the classic target.
• The building is old and the maintenance bill is climbing. Ageing services, a facade that needs work, or a lift approaching replacement all shift the arithmetic.
• There are significant defects or cladding issues. A building facing a large remediation bill can find that redevelopment looks cheaper than repair. Our guides on combustible cladding and waterproofing defects cover how quickly those costs escalate.
• Insurance is becoming difficult. Buildings that are hard to insure, or insurable only at extreme cost, become financially fragile.
• The capital works fund is well short of what is needed. A scheme facing major works with no reserves is a scheme where a sale starts to look attractive to a lot of owners. Our guide to how much a capital works fund should hold sets out the benchmarks.

If you are buying rather than selling, this belongs on your due diligence list. A strata search will not tell you a collective sale is coming, but meeting minutes recording developer approaches, feasibility spending or renewal discussion will. Our buyer's checklist for reading a strata search certificate explains where to look.

What to Do If a Proposal Lands

• Read the proposal properly, including the warning notice. It has to disclose who is promoting it and what they stand to gain.
• Get your own valuation. Do not rely on the number in the proposal, and do not rely on the promoter's valuer. This is the single most valuable thing you can spend money on.
• Talk to a strata lawyer early, particularly if you intend to dissent. Your leverage is highest during the plan's development and at the court stage, not after orders are made.
• Involve your lender. Mortgagees have a formal role in the support process, and yours will need to be part of the conversation.
• Coordinate with other owners in your position. Dissenting owners who share the cost of a valuer and a lawyer are in a much stronger position than owners going it alone.
• Do not ignore the deadlines. These processes run to defined windows, and rights lapse if you sit on them.

Key Takeaways

• Unanimity is no longer the rule in most of Australia. A supermajority of owners can end a scheme and sell the site over your objection.
• The threshold varies: 75 per cent in New South Wales, 75 per cent in Queensland but only where the building is uneconomic to repair, 80 per cent in Western Australia, with Victoria still requiring unanimity and under review.
• A court or tribunal is the real safeguard. The owner vote gets a plan to a hearing; an independent body decides whether it is just and equitable.
• Dissenting owners are entitled to compensation built on market value plus disturbance costs, though that may still not buy an equivalent apartment in the same area.
• Older buildings on valuable land, with defects, insurance difficulty or an underfunded capital works fund, are the likely candidates. Check the minutes before you buy.

Compare body corporate fees across Australia at BodyCorporateFees.com.

This article is for informational purposes only and should not be considered legal advice. Collective sale and scheme termination laws differ significantly between states and territories and are subject to ongoing reform. If a renewal or termination proposal affects your property, obtain advice from a qualified strata lawyer and an independent valuer without delay.