When a Developer Wants to Buy the Whole Building: Collective Sales Explained
First, slow down
- A committee cannot casually sell the whole building.
- The voting threshold depends on the state and the type of scheme.
- The process is as much about fairness and valuation as it is about price.
Collective sale conversations usually start quietly. A developer writes to the committee. A neighbour says the block next door sold for a large number. Someone at the AGM asks whether the land is worth more than the apartments. Owners who planned to stay for decades suddenly wonder whether they are sitting on a redevelopment site.
Then the building splits into camps. Some owners want the sale. Some do not. Some want to know the price. Some think the committee is hiding something. Some are tenants who have no vote but will be displaced if the sale proceeds.
Collective sales can be legitimate and financially attractive. They can also become messy, emotional and legally complex. The main thing to understand is that this is not an ordinary sale of one lot. It is a process for ending or redeveloping a shared ownership structure.
Why Collective Sales Are Becoming More Common
Many Australian apartment buildings from the 1960s, 1970s and 1980s are reaching the point where major repairs are expensive and redevelopment pressure is high. Low-rise blocks near train stations, beaches, hospitals and town centres often sit on land that developers want.
At the same time, owners face rising insurance, ageing pipes, waterproofing failures, lift upgrades, fire safety work, facade repairs and underfunded capital works plans. For some buildings, a collective sale looks like a way out of future special levies.
That does not mean every old building should sell. Some are solid, well located and cheaper to maintain than a new high-rise. The sale question should be tested against real numbers, not fear.
NSW: The 75% Strata Renewal Process
NSW has a formal strata renewal process under the Strata Schemes Development Act. In broad terms, a collective sale or redevelopment can proceed if at least 75% of lot owners support the strata renewal plan and the Land and Environment Court approves it.
The 75% figure is not a casual vote at a committee meeting. The process includes proposal stages, formation of a strata renewal committee, preparation of a plan, special disclosure steps, support notices and court oversight.
The court's role matters. It is designed to protect dissenting owners and make sure the process has been properly followed.
Owners should be wary of anyone who says "we only need 75%, so the rest have no say." Dissenting owners may not have a veto once the threshold and court approval requirements are met, but they still have rights in the process.
Queensland: Economic Reasons and 75%
Queensland's 2024 body corporate reforms introduced a pathway for terminating some basic community titles schemes for economic reasons with 75% or more lot owner support, backed by a pre-termination report. The reform was aimed partly at ageing schemes where maintaining the property no longer makes economic sense.
The details matter. The scheme type matters. Layered arrangements are different. The evidence in the pre-termination report matters.
Queensland owners should not assume the NSW process applies to them. The number may sound similar, but the legislative pathway is different.
Western Australia: 80% and Tribunal Approval
WA reformed strata termination laws in 2020, introducing a process that can allow termination with an 80% majority and State Administrative Tribunal approval. Landgate's five-year review of WA strata law has been examining whether the reforms are working as intended.
The WA discussion is important because it shows a broader national issue: governments want older strata schemes to have a realistic termination pathway, but the safeguards for objecting and vulnerable owners are politically and legally sensitive.
No state wants a process that lets one owner hold an entire building hostage forever. No state should want a process that lets vulnerable owners be pushed out without proper protection.
The Questions Owners Should Ask
The first question is who approached the building. Was it a developer, buyer's agent, neighbour, committee member or owner? Has anyone signed a confidentiality agreement, option agreement or heads of agreement?
The second is whether the committee has legal advice. A collective sale is not a normal committee matter. The owners corporation needs independent legal advice before owners are asked to support anything.
The third is how value will be assessed. One developer's number is not a valuation. Owners should understand land value, existing lot value, redevelopment potential, planning controls and comparable sales.
The fourth is how sale proceeds will be divided. Is it by unit entitlement, lot area, market value, negotiated allocation or another method allowed by the relevant law? This question can become explosive.
The fifth is what happens to objecting owners. What rights do they have? What compensation is available? What are the court or tribunal safeguards?
The sixth is timing. A redevelopment sale can take much longer than owners expect. Settlement may depend on approvals, finance, court orders or developer conditions.
The seventh is tax and finance. Capital gains tax, pension impacts, mortgage discharge, bridging finance and replacement housing costs are personal issues. Owners need their own advice.
What Committees Should Not Do
Committees should not negotiate privately and present owners with a finished deal.
They should not let one enthusiastic owner or one developer control the information flow.
They should not sign documents without legal advice.
They should not tell owners the sale is inevitable before the statutory process has run.
They should not dismiss dissenting owners as difficult. For some people, the apartment is not just an investment. It is their home, community, school catchment, medical access and retirement plan.
The Building's Own Numbers
Before owners get excited about a developer offer, they should understand the building's current financial position. What major works are coming? How much is in the capital works fund? Are special levies likely? Is insurance becoming difficult? Are there unresolved defects or cladding issues?
A building with $3 million in unavoidable repairs and a weak capital works fund will view a sale differently from a building with modest maintenance and strong reserves.
Collective sale is not only a property development issue. It is also an asset management decision.
What UnitBuddy Tracks
UnitBuddy can keep the sale proposal, owner communications, meeting decisions, valuation documents, renewal committee records, legal advice milestones and key dates in one place. It also gives owners a clear view of the building's existing financial and maintenance position before the sale debate starts.
The worst collective sale processes are run on rumours. A shared record does not make everyone agree, but it gives owners the same facts.