Landmark ruling paves way for forced accom sales
An $81 million hotel in Sydney’s Darling Harbour has sold with the agreement of just three-quarters of the building’s owners, under laws set to change the accommodation landscape.
The Yeh family spent two years battling for the legal right to compulsorily acquire tenants’ strata units in the 119-room Seasons Hotel Plaza on Sussex Street, arguing the owners of 15 of a total 90 units were overseas and hard to contact.
The deal marks the first ever court-ordered collective sale, made possible after changes to the Strata Schemes Development Act in November 2016 which dictate strata unit owners must sell if 75 per cent of owners agree.
Under the Act, an owners corporation can apply for an order approving and requiring the sale of all lots if least 75 per cent of lot owners in the strata scheme approve the sale of the building, subject to Land and Environment Court approval.
The Court is required to approve the sale if satisfied on several criteria, including the level of compensation for each owner and that all circumstances for the sale are just and equitable.
The 19-floor Seasons Hotel Plaza features rooms ranging from compact studios to a loft penthouse and encompasses a rooftop indoor heated pool, sauna, gym, restaurant and 34 car parking bays.
Colliers International head of hotels Gus Moors said the owners corporation capitalised on the change to the Act and the strength of Sydney hotel market.
“In one of the most tightly held markets in the country, the sale of Seasons Harbour Plaza Sydney represents an incredibly rare opportunity to secure a hotel asset with immense opportunity,” he said.
Dentons, the law firm that advised the building’s owners corporation, said the group was now a part of NSW legal history.
“This is a particularly significant achievement because it’s the first time the court has had to consider this legislation in detail and it is the first successful use of the legislation to enable the collective sale of a strata building,” Dentons partner Christina Renner said.
“With this historic judgment, we expect that market perceptions around strata collective sales will shift, and more owners corporations will see the opportunities that are now open to them.”
The Yeh family own other hotels in Sydney’s CBD including Kent House on Liverpool Street and the Park Regis on Park Street. It plans to transform a heritage-listed commerical building at 143-145 York Street into another boutique offering.
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