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Buying a unit in a complex that may be sold en-block?

Discussion in 'General Property Chat' started by JohnPropChat, 9th Mar, 2016.

  1. JohnPropChat

    JohnPropChat Well-Known Member

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    What happens if one owns an apartment in a big but old complex that a developer is trying to buy en-block so that they can knock it down and rebuild.

    Will you be forced to sell for unfair prices? Unfair being below market value.
     
  2. thatbum

    thatbum Well-Known Member

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    Depends on the state, but generally you can't be forced to sell at all (in WA).
     
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  3. sanj

    sanj Well-Known Member

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    you are significantly more likely to get above the market value for your individual unit if a developer buys it en bloc, not lower.

    in WA you need 100% of owners to agree to sell although there has been talk of changing the rules to make en bloc a bit easier in particular circumstances
     
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  4. Chilliblue

    Chilliblue Well-Known Member

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    Different in NSW with the changes in the Strata Laws where 75% of owners can agree to end their strata scheme. See below.

    @sanj it is a myth that people can always get about market value for the their property when selling in a block. I have purchased many properties (residential and commercial) where the owners may have thought that but my clients purchased below valued market. Its often more about perception.

     
  5. sanj

    sanj Well-Known Member

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    yup perth is considering the 75% rule too, subject to a few things. still early stages though.

    re the 2nd point, im referring specifically to an en-bloc situation. in the case of a decent sized strata (i think in perth the minimum units for the proposed changes to en bloc rules is 12 or so), in order for the minimum 75% to be reached you'd have to convince a fair few people to sell at once.

    in most situations you are going to at the absolute least offer market value on a per unit basis to convince them and id argue probably higher as not every owner is going to be interested in selling without a good reason to.

    the clients you're referring to, are you saying they bought a whole block of units with many different owners to redevelop and paid less than the sum of the valuation of each unit? surely that is pretty rare, what was the motivation for so many different people to decide to sell their units for less than they were worth, all at the same time?

    single owner is different and not really what the whole en-bloc process is about.

    of course in some cases paying above market value for each individual unit might still lead to a developer buying a site under market based on current best use, that still means the individual owner will get above or at very least market for their unit surely?

    am i missing somethig? i personally have no experience in en bloc purchases or sales so speaking purely theoretically here
     
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