Pub: Sydney Morning Herald

Pubdate: 31-Dec-2002

Edition: Late

Section: Metropolitan

Subsection:

Page: 18

Wordcount: 1346

Dire stratas

PLANNING Arts & Entertainment Summer Metropolitan

Elizabeth Farrelly.

Ugly apartment buildings are set in brick and here to stay unless property law is reformed, writes Elizabeth Farrelly.

It’s like one of those inscrutable Asian gesture games. Paper beats rock; continuity beats capital. The marketing people have finally worked out what Mormons and opium dealers have known all along; any kind of ongoing commitment beats a one-off sum. They call it “loyalty”, like some kind of virtue, but scam is a simpler word. So the thinking that sells you a printer for next-to-nothing then slugs you a hundred bucks a cartridge, or a mobile phone for zilch (except, oh yeah, a two-year contract), also means you can’t make a simple donation any more: charity is now a sign-up job. With no sunset clause.

Anyone who feels victimised by this – and why wouldn’t you? – might be surprised to learn that a similar principle applies to buildings. Time bomb is the metaphor most likely. It’s been ticking since 1961. And while the bang may not come this week, it will come.

Stuart Mackenzie, principal urban designer at Canberra’s National Capital Authority, calls it “one of the biggest single issues confronting architecture and urban design today”. Graham Jahn, the president of the Royal Australian Institute of Architects, and John McInerney, the president of the Planning Institute of Australia, are inclined to agree. Representations have been made to governments. But no solution is even within cooee.

The ticker’s full name is the Strata Schemes (Freehold Development) Act 1973 and it sets the framework for development and subdivision of strata schemes. What it doesn’t do is provide any effective means for termination. So the last-resort comfort of eventual demolition no longer holds: these buildings – including hundreds of commercial properties (not usually towers) and virtually all of the past decade’s residential boom – are here to stay. As in, permanent.

And yes, be scared. It’s every bit as terrifying as it sounds.

Strata-titling came to NSW in 1961, under pressure from developers and others who were finding it impossible to meet the relentless postwar demand for residential and commercial accommodation within the existing legal framework. Flats were becoming an accepted dwelling type, but none of the existing schemes of flat ownership was proving satisfactory.

At the time, the three dominant schemes were company title (where you own not a flat, but shares in the owner company), leasehold title and ownership as tenants in common. But the fact that none of them generated the marketable commodity of separate freehold title spelled speculative death. And it wasn’t like the government was stepping into the breach.

So the new act, refined and amended like a Proust manuscript over subsequent years, sorted the problem. At least at the front end. It divided the strata-titled building, exhaustively and exclusively, into a number of lots, with each lot comprising one or more clearly defined air spaces and a share in the common property.

Sounds neat, but it makes a playground for dispute – not only over noise and party walls, as in your regulation terrace or semi, but also over the use and treatment of common property. So the sister act, as it were – namely the Strata Schemes Management Act 1996 – offers mechanisms for resolution; in particular the body corporate, or owners’ corporation as it is now.

For minor decisions, 50 per cent support suffices; bigger issues, such as leases or repairs of common property, require 75 per cent.

When it comes to terminating a strata scheme, however, the law is more skinflint, offering just two devices that anyway boil down to one – unanimity.

A strata scheme can be terminated either by application to the Registrar-General, signed by all owners, mortgagees and the owners’ corporation, or by unilateral application from any of the above to the Supreme Court. But because, in practice, the Supreme Court requires unanimity as a precondition of consent, any disagreement – even a single voice – puts the entire application in the bin. Peter Calov, strata specialist at Coudert Brothers legal firm, says: “We are not aware of any case where a contested order for termination of a strata scheme has been successful.”

That’s fine, and you can see the reasons for it. Mr and Mrs Fluffy Slipperz own a two-bedder that is their sole egg, nest included. The building is a charmless red-brick job from the early ’60s, ripe for redevelopment. But, you know, home is home. Suddenly, they find all the other apartments have been snapped up by a developer at not much more than land value since he proposes to knock it down and start again. Last thing they need is a forced sale of their one asset.

The law exists to protect these people, or so we like to believe. But the flip side is that a single, mean-minded owner can hold out for vast amounts of money and screw the rest. While for the community, the rub is that – especially with large residential towers where stakeholder numbers may run into the hundreds – unanimity becomes virtually unachievable and demolition virtually impossible.

It’s not just buildings, either: whole urban areas are affected, with some neighbourhoods already up to 60 per cent strata-titled. Architect and planner Michael Neustein points to the farce of continuing to “plan” in such situations, where more than half the fabric is preserved in aspic. He says councils should follow the example of the Maroubra Junction Development Control Plan, which takes strata-titled properties into account.

So, what will happen as the buildings age? Truth is, nobody knows. Do remedies exist? Well, no, not really.

The Property Council of Australia insists it has a solution but won’t say what it is. Not before an election. The architects’ institute suggests three options, possibly in combination: quarantining areas such as the CBD as leasehold only; compulsory acquisition; and an “85 per cent buy-out rule” (also rumoured as the Property Council’s favoured option) which

allows majority control.

The Planning Institute agrees. “In a conceptual sense, we’re past the idea that a man’s title is his castle,” says McInerney. “We need to get away from a situation where an individual has complete control over large pieces of land.” Unless that individual is very rich or powerful. Like a developer, say. Or a minister.

But would it work? For leasehold to be a solution it needs to presume reversion-upon-expiry to a single ownership, rather than being quasi-freehold where rollover is more or less guaranteed (as it is in Canberra, for example). This sounds unlikely at best, in a Sydney context. One imagines that the residents of the Woolloomooloo and Walsh Bay wharves – both leasehold developments – would be a trifle surprised to see their titles expire, even 100 years hence.

And then there are the equity arguments. As Calov says, “It is very difficult to find a solution that is fair.” Majority termination is the easiest, legally, but any threat to individual freehold is politically impossible. Especially with the numbers of Great and Good now affected. For all Bob Carr’s ugly-buildings anguish, strata reform isn’t on the drawing boards. It’s not even close.

Eventually, perhaps, things will get so bad, so dilapidated, so downright disgusting, that something will have to be done. Meanwhile? Don’t hold your breath. Just cover your

eyes, tick tock tack, and await the whimper.

Caption:

ILLUS: Illustration: Michael Fitzjames