Strata Schemes (Leasehold Development) Amendment Bill

About this Item
SpeakersYeadon Mr Kim
BusinessBill, First Reading, Second Reading


Bill introduced and read a first time.
Second Reading

Mr YEADON (Granville - Minister for Information Technology, Minister for Energy, Minister for Forestry, and Minister for Western Sydney) [7.40 p.m.]: I move:
      That this bill be now read a second time.

The Strata Schemes (Leasehold Development) Act currently allows the creation of leasehold strata schemes to land owned by the Crown, or a public authority constituted by an Act, or a local council. In other words, if a public authority owns a parcel of land that is suitable for strata development, it currently has two options. It can sell land to a developer who could then build a block of units, subdivide it by a strata plan, and sell off each of the lots. Alternatively, if the public authority does not wish to sell the land it can lease the land to a developer, for example, for 99 years.

The developer could construct a block of units and then lodge with the Land Titles Office a strata plan, and subdivide the land and building into strata lots and common property. At the same time as the strata plan is lodged, the public authority would lodge individual leases to the developer of each of the strata lots and one lease to the owners corporation of the common property. The Strata Schemes (Leasehold Development) Act 1986 provides that upon registration of the strata plan and the leases of the lots and the common property, a leasehold strata scheme will arise. That is, titles will be issued in the name of the developer for each of the lots, but these titles will only be for the developers of leasehold interest in the lots.

Those leasehold titles can then be transferred to purchasers of the lots and the purchasers can mortgage, lease or further transfer the titles in much the same way as normal freehold strata titles are dealt with. The leases replace the original 99-year lease of these sites to the developer. Accordingly, the leases must all expire on the date that the 99-year lease would have expired. The public authority retains ownership of the freehold of the land, and at the end of the 99-year lease period the strata scheme is automatically extinguished. The net result is that the land is able to be developed by means of the strata scheme without the owner of the land having to part with any freehold interest in it. However, currently this facility is only available to public authorities.

Other landowners are not able to have the land developed by strata leasehold. Those other landowners may have legitimate reasons for wanting their land to be developed in strata lots without having to part with any freehold interest. For example, a church or a club may have owned a parcel of land for many years and may now wish to develop it by means of the strata scheme, while still retaining ownership of the land. In response to this inconsistency, this bill will amend the Act to allow other landowners to develop their land by means of strata leasehold.

This is achieved by simply removing the current restriction that provides that only land owned by the Crown, or a public authority constituted by an Act or a local council, can be eligible for leasehold strata subdivision. This measure places government and non-government landowners in an equal position and removes a bias that previously existed in favour of government. That is the principal reform contained in the bill. However, the bill also provides for ancillary amendments of two Acts: the Local Government Act 1993 and the Land Tax Management Act 1956. [Quorum formed.]

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Those two Acts are being amended to ensure that leasehold strata lots can be rated for local government rates and assessed for land tax in the same manner as freehold strata lots. This bill will allow privately owned land to be developed in a way not previously available. It will therefore facilitate the development of sites that previously have not been developed because the owner has been unwilling to part with any of its freehold interest in the land. It removes a bias that has operated in favour of government landowners and against private landowners. I commend the bill to the House.

Debate adjourned on motion by Mr Fraser.