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Subdivide apartment block

Discussion in 'Development' started by Teal, 1st Jul, 2016.

  1. Teal

    Teal New Member

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    I am looking at purchasing an apartment block with 10 units (4x2br & 6x1br) in Melbourne's South East.
    The block is currently on 1 title.

    My intention is to re-furbish all the apartments, subdivide and sell off a few and keep a few.

    Has anybody undertaken a similar project that can share some of your experiences and what to look out for?
    Some queries I have are:
    Are there any consultants you can recommend that specialise in this process that can assist with this project.
    What sort of costs should I be accounting for in the subdivision process.
    What sort of time frame does it take to undertake the subdivision.

    Any assistance would be appreciated.
    Thanks.
     
  2. Brady

    Brady Well-Known Member

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    Can they actually be subdivided? Firewalls between is usually biggest hurdle.
     
  3. Teal

    Teal New Member

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    It is a solid brick building and I have the original plans from 1967 that show the party walls are double skin brickwork going to the underside of the roof but this cannot be guaranteed without further inspection and investigation.
     
  4. Handyandy

    Handyandy Well-Known Member

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    Possibly the ceiling were never fire rated correctly. They need to have 2 layers of 16mm (1") gyprock installed.

    I have one block of the same vintage that had correct party walls but ceilings not fire rated and also no fire rated doors nor fire rated door frames.

    It's all able to be fixed - but at a cost.
     
  5. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Strata yes. Subdivide = No. The land would remain on a single title. Subdivision is the process of splitting one large lot of land into smaller lots allowing each to be a freehold capable of sale by that owner. A strata plan allows a single lot of land to comprise separate titles and common areas.

    The question raises a red flag. An existing block would already have a strata plan and buying them all is unusual.So a new strat is needed. Rare to find a single title but they do exist - Boarding and longer term accom ? Normally what you propose is a single title that is used in a different capacity. Often a dump and massive costs to change it. Think The Block...A office tower, stables or factory etc and that is broken down into new units. The motel they converted an example too.

    Loads of issues including GST, ownership / title and much more. Finance etc. This is no cosmetic reno I suspect. Maybe start with a Vic strata expert and see what they think ?
     
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  6. Heinz57

    Heinz57 Well-Known Member

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    Just wondering what GST issues would arise? Is it the refurbishment in the short time frame?
     
  7. sanj

    sanj Well-Known Member

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    @Teal I'd recommend starting with a strata expert/consultant who cab advise yoi on strps and ballpark figures from legislative/process pov and a building surveyor to let you know structural/physical requirements and the ease with which they can be done for this project.

    those 2 will be able to fill in the gaps a fair bit when it comes to doing a feasibility.
     
  8. Teal

    Teal New Member

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    @Handyandy I hadn't thought of fire rated door frames and doors. It is a 2 storey block with a concrete slab so I wouldn't have thought fire rating ceilings on lower level would be required but possibly the first floor apartments may need. Did you go through with yours or was it too costly? Where were the other major costs?

    @Paul@PFI and @sanj Do you know a Vic strata expert consultant?
    Thanks for the responses.
     
  9. melbournian

    melbournian Well-Known Member

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    From a construction perspective - i presume you are going to take down some internal walls, load bearing walls etc (which is going to be pretty expensive exercise from the builders to certifications). This is from my previous experience refurbishing and selling individual apartments. i know ppl who have joined apartments as in next door to each other but not re-dividing them in the strata.

    i know frank valentic and his company Advantage property group do refurbishment.of total blocks as for whether he does what you intend to do, not particularly sure.
     
  10. Handyandy

    Handyandy Well-Known Member

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    Yes it was only the top floor ceiling that wasn't correctly fire rated.

    There may also be a requirement to fire rate the plumbing and electrical penetrations. This would be through the concrete slabs.

    http://www.pyropanel.com.au/Other/Pyropanel/PDF Section/Passive_Products-All_tech_sheets.pdf Page 4-9

    I didn't treat the penetrations. The theory of the collars is that they seal the penetrations by crushing the pipes.

    We did fire rate the ceilings and upgrade the front door frames and install fire rated doors.

    Most probably cost us about $20k.

    We didn't strata title as kept them for rentals.
     
  11. Scott No Mates

    Scott No Mates Well-Known Member

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    Get a BCA certifier on board to work with your architect.

    As pointed out above, fire separation is the big issue but isn't impossible to overcome. Everything will need to be brought up to current BCA requirements including exit/emergency lighting, provision of fire hose reels/hydrants, upgrading exhaust if required, bound to be some degree of asbestos removal. Depending upon the design, fire doors may not be required only seld-closing solid core doors. Glazing may require replacement to safety glass, possible electrical upgrades too for air conditioning or to meet current expectations.