By Aaron Gadiel, Partner and Kalinda Doyle, Special Counsel.
The Land and Environment Court has handed down a new decision that clarifies the operation of the strata renewal development process. The decision is good news for the developers of strata-titled properties.
The decision is known as The Owners – Strata Plan No 38065 v Zhang [2026] NSWLEC 83. It was handed down on 9 July 2026.
Mills Oakley acts for the developers in this matter.
Traditionally, a strata scheme could only be terminated with the unanimous agreement of all lot owners. This meant that anyone who sought to acquire lots in a scheme could readily be prevented from redeveloping the land by one or two hold-out owners.
As a result, the redevelopment of strata-titled land was widely regarded as challenging, time-consuming and, in most cases, commercially unviable.
In 2015, the NSW Government moved to address this problem by introducing the ‘strata renewal process’ — as set out in Part 10 of the Strata Schemes Development Act 2015 (the SSD Act).
The strata renewal process provides a mechanism through which ageing strata schemes can be collectively sold or redeveloped without 100 per cent agreement of the owners.
The strata renewal process allows the owners corporation of a strata scheme to pursue either:
of the strata scheme through a strata renewal plan.
Where the statutory requirements are satisfied, and the requisite level of owner support (75 per cent of the lots, other than utility lots) is obtained, the owners corporation may apply to the Land and Environment Court for orders giving effect to the strata renewal plan.
Despite the potential of the strata renewal process, uncertainty has persisted regarding its practical operation, particularly where dissenting owners seek to challenge the validity of a strata renewal plan on procedural grounds. This uncertainty has, in some cases, tempered enthusiasm for the process amongst developers.
The most recent decision of the Land and Environment Court (in Zhang) provides welcome guidance on the Court’s approach to the strata renewal provisions and confirms that the legislation should be interpreted in a practical and facilitative manner.
The proceedings concern a proposed redevelopment of a 14-lot residential strata scheme in Chatswood. The owners corporation sought orders giving effect to a strata renewal plan.
Before the substantive application could be heard, the dissenting owners made an application seeking the summary dismissal of the proceedings.
Amongst other matters, the dissenting owners made two key arguments.
Firstly, the dissenting owners claimed that the strata renewal plan had already lapsed because the support notices had not been received by the returning officer as per the timeframe prescribed by the SSD Act. The dissenting owners argued that strict compliance with this timing requirement was essential and that any departure from it meant that the strata renewal plan was incapable of proceeding.
Secondly, the dissenting owners claimed that the strata renewal proposal was properly characterised as a ‘collective sale’ rather than a ‘redevelopment’. They claimed that this mischaracterisation was fatal to the application before the Court.
The Court rejected the dissenting owners’ interpretation of the timing provision.
In doing so, the Court emphasised that the task of statutory construction requires consideration of the text, context and purpose of the legislation. The Court found that the interpretation advanced by the dissenting owners would significantly impede the operation of the statutory scheme and introduce a technical constraint that could readily frustrate otherwise valid strata renewal proposals.
Instead, the Court adopted a construction consistent with the stated purpose of Part 10 of the SSD Act. That is to ‘facilitate’ the collective sale or redevelopment of strata schemes through the statutory process established by the legislation.
The Court also provided important guidance on the operation of section 182(4A), a relatively new provision inserted into the SSD Act on 11 December 2023.
This provision allows the Court to approve a strata renewal plan — despite a defect or irregularity in the process — so long as that defect or irregularity is not likely to result in substantial injustice.
The dissenting owners argued that the legislation should be interpreted narrowly, with strict consequences flowing from alleged non-compliance. The Court rejected those submissions.
Instead, the Court adopted a practical and facilitative approach to the operation of the strata renewal process. In our view, the judgment recognises that the statutory scheme is intended to provide a workable pathway for strata renewal, rather than a mechanism by which technical objections which are not likely to cause substantial injustice can readily defeat otherwise compliant strata renewal proposals.
This represents one of the first substantive judicial considerations of the provision and provides valuable guidance for future applications.
The Court rejected the dissenting owners’ submissions on the characterisation of the strata renewal plan.
In dismissing the submissions, the Court expressed doubt as to whether the Court should be concerned with the applicant’s choice to seek orders based on a ‘collective sale’ or a ‘redevelopment’ pathway.
Instead, the Court suggested that the focus of the Court’s determination (under section 182 of the SSD Act) should be the actual strata renewal plan that is before the Court.
The Court determined that the proceeding should not be summarily dismissed and that the matter should proceed to a full hearing in the regular way.
The decision is important and welcome for developers, owners corporations and other stakeholders seeking to utilise the strata renewal process.
The decision is significant because it reduces the scope for dissenting owners to deploy technical statutory construction arguments as a means of frustrating strata renewal proposals.
While the Court’s supervisory role remains an important protection for lot owners, the judgment confirms that the legislative scheme is intended to operate as a workable pathway to redevelopment — rather than a procedural minefield in which minor irregularities can defeat an otherwise meritorious proposal.
For developers, the decision provides greater confidence that:
As redevelopment opportunities within established urban areas become increasingly constrained, this decision is likely to be welcomed by developers seeking to unlock opportunities through the strata renewal process.
It sends a clear signal that the legislation is to be interpreted in a manner that advances, rather than hinders, the objective of facilitating strata renewal.
If you would like further information or have any queries regarding other matters, please do not hesitate to contact:
