Building Amalgamations, terminations and winding up
As buildings age and require increased expenditure to maintain the common property there is a natural inflection point where the choice has to be made – is that money raised and then spent, or is there another sale option?
Prior to the GFC (basically from 2001 to 2008) there were a raft of attempted building amalgamations – some of which were more successful than others.
Putting together a proposal involves careful consideration of the rights of owners and the statutory obligations of bodies corporate. We have acted in many building amalgamations for bodies corporate, developers , individual owners and receivers and have a complete understanding of both the legal and commercial issues that drive a matter like this.
The legal issues are yet to be fully ventilated, but a frequent theme when a developer has control is the oppression of the minority. A real action claiming this is yet to be successful, but we are very well versed in what is required to prove one.
Usually, such matters are all resolved commercially – whether through everyone being bought up, or the intervention of a third party (i.e. a receiver via the GFC).
Our experience includes acting in the amalgamations of:
Iluka – which was for the body corporate in the context of minority owners trying to fight off developer imposed special levies. This site was amalgamated.
Aarons (now Surfers Boulevard) – acting for the developer in body corporate issues relating to management of the scheme with 40 out of 44 lots owned by it. This site was amalgamated.
King Tide – acting for the receiver to the entity that purchased half of the units then had to decide to try to continue or walk away. This site was not amalgamated.
Pacific Beach – acting for several owners in the sale to the developer, including one of the very last of the 122 properties. This site was amalgamated. This included the owner of the management rights to one of the community titles schemes that was part of the site.
Nobby’s Outlook – advising the committee on the legal basis and commercial strategy to achieve an order from the District Court that a scheme be wound up on just and equitable grounds. One owner out of 44 was resisting the proposal. This order was subsequently achieved by consent.
Gold Coast – currently advising a body corporate and owners in relation to a confidential the proposal from a developer to amalgamate a site. The site includes both residential and commercial lots which are tenanted to substantial businesses.
These can all be very complicated matters with dozens of competing interests.
Experienced advice is a must.
Examples of articles where we talk about these issues: