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This guide is produced by the Western Australian Land Information Authority (Landgate) to provide the community with a basic understanding of strata titling principles. It is a general information source only, it is not legal advice and should not be taken as legal advice on strata titles. You should refer to the legislation available on the WA government legislation website www.legislation.wa.gov.au
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1. Termination Overview
There are 3 ways in which a strata titles scheme may be terminated:
- By application by a single owner;
- By application supported by unanimous resolution passed by the strata company; or
- By majority vote of a resolution passed by the strata company.
Where all the lots are owned by a single owner, there are no requirements for an outline or full termination proposal or a vote. The owner can proceed directly to an application to the Registrar of Titles to terminate the scheme, subject to winding up the strata company and obtaining a deposited plan approved by the Western Australian Planning Commission.
The termination process, except in the single owner scenario, is more than just a vote. There is a complete, transparent process that must be followed. If the vote is unanimous, there is no requirement for a review by the State Administrative Tribunal (SAT). There is a more streamlined process where the owners vote initially to support a unanimous owner-initiated termination proposal. In this case, they forego some of the protections. Up to the point of voting on the termination proposal owners can opt out of the owner-initiated process. This will require the proponent to commence the termination process again and provide the full protections. If the vote produces the required majority, but is not unanimous, the termination proposal must undergo a fairness and procedure review by the SAT. A majority termination proposal cannot proceed without an order from SAT, who can order that a scheme be terminated under a majority vote only if it is satisfied of three key things:
- the termination process was properly followed, and
- every owner who objects to the termination will get at least fair market value for their lot (e.g. apartment or unit), and
- the proposal to terminate is just and equitable.
The Strata Titles Act 1985 (Act) provides extensive guidance to assist SAT in deciding whether the proposal is just and equitable.
Except for owners participating in an owner-initiated termination proposal, owners will have access to funding to respond to a full proposal and vulnerable owners will have access to additional funding and assistance to respond to the termination proposal.
1.1. Notice of Termination Event
A Notice of Termination Event is required to be lodged by the strata company with the Registrar of Titles in a number of specified circumstances. A lodgement fee applies each time a notice is lodged.
The certificates of title of all lots in the scheme and the scheme plan will be endorsed with the termination event the subject of the notice. At any stage the termination process is stopped (either by withdrawal, unable to proceed or SAT does not confirm a termination resolution), lodgement of this notice will remove all preceding notices relevant to the termination process from all strata titles and endorse the cancellation on the scheme plan (on the Record of Strata Titles Scheme).
1.2. Termination of a Freehold Scheme
The termination of the scheme will take effect on registration of the termination by the Registrar of Titles. A proponent can apply to the Registrar of Titles to terminate the scheme if the proponent has obtained a WAPC endorsed plan of survey (deposited plan) and taken steps to wind up the strata company. The application must be made within 12 months of SAT confirming the termination resolution or within 12 months of obtaining a unanimous resolution in favour of the termination proposal. Note: The proponent can withdraw their proposal at any time before registration of the termination. Please refer to Strata Titles Policy Guide STP-17 in relation to plan requirements.
The proponent is defined in section 173 of the Act as being either:
- the owner of a lot in the strata titles scheme; or
- a person who has a contractual right to purchase a lot in the strata titles scheme; or
- a body corporate formed by 2 or more such persons.1
1Paragraph added 11/11/2024
1.3. Termination of a Leasehold Scheme
A leasehold scheme may:
- terminate at the end of the expiry day for the scheme (when all strata leases expire at the same time); or
- be terminated before the expiry day of the scheme.
Termination of a leasehold scheme will happen automatically when the scheme and all the strata leases simultaneously expire. Termination before the expiry day of the scheme will always require the strata company to vote on the termination resolution and consent of the owner of the leasehold scheme (lessor under the strata leases). Information about how the expiry day for a leasehold scheme can be postponed is set out in the leasehold strata section.
The same termination process for a freehold scheme applies to termination of a leasehold scheme before the expiry day except that the consent of the owner of the leasehold scheme (the lessor under the strata leases) is required for an outline termination proposal or full termination proposal to proceed.
1.4. Expiry of a Leasehold Scheme
Every leasehold scheme will automatically be terminated when all the strata leases simultaneously expire at the end of the expiry day of the scheme. This doesn’t require the strata company to vote or have the termination reviewed by SAT. Certain documents will be lodged with the Registrar of Titles to show the leasehold scheme has been terminated because the strata leases and the leasehold scheme have expired. Upon expiry of the leasehold scheme, the person who was the owner of the leasehold scheme immediately before the expiry day gets the land back in the same title. Refer to section 7 of this guide.
2. Application for Termination by Single Owner or Unanimous Resolution (Section 191 or 193 of the Act)2
The proponent can lodge an Application for Termination of Scheme by Single Owner or Unanimous Agreement with the Registrar of Titles:
- if all the lots in a strata titles scheme are owned by the same person; or
- if the vote of every lot in the scheme is cast in favour of the full termination proposal (i.e. unanimous).
This application is to be accompanied by:
- any documents necessary to remove encumbrances from the strata lots, common property, and leasehold reversionary title (if any) or the written consents to bring those encumbrances forward (if Required);
- Statement to Deal with Land by the proponent (i.e the Applicant) of how each item registered or recorded for the scheme in the Register is to be dealt with;
- Certificate of Strata Company – Termination of Scheme, where the scheme is not a single owner;
- Statutory declaration by the proponent (i.e. the Applicant) that the termination proposal hasn’t been withdrawn and that there are no reasons under section 187(1) of the Act for the termination proposal to not proceed further, where the scheme is not a single owner;
- Consent of the Owner of a Leasehold Scheme, if leasehold and applicant not the owner of the leasehold scheme (OLS); and
- Deposited plan endorsed with approval of the Western Australian Planning Commission (to be lodged by the surveyor).
Consideration needs to be given to any encumbrances affecting the land the subject of the termination (i.e. on the strata lots, common property, and leasehold reversionary title (if any)). Whilst it is recommended that the land be free of encumbrances prior to termination, the following circumstances may apply:
- Easements or restrictive covenants created under section 33 (or formerly section 5D) of the Act are automatically discharged upon termination, with no further action required.
- Easements created under section 136C of the TLA should be removed by application made under section 136J of the TLA where the benefit and burden of the easement are between lots within the scheme, or where they burden lots within built strata schemes benefitting land outside the scheme.
- A mortgage over part or the whole of the parcel may be brought forward with the written consent of the mortgagee.
- However, in circumstances that the mortgage will remain registered over part only of the new lot on the termination deposited plan after termination, the mortgagee will need to clearly acknowledge in that written consent that it may result in the restriction of the ability to exercise a power of sale.
- A lease creating temporary common property, should be surrendered.
- Any encumbrance that benefits a lot within the scheme that will have no effect after termination must be removed.
- Any encumbrance that has been brought forward onto the termination deposited plan will not require written consent, unless stated otherwise above. However, if they have not been shown, the appropriate documents will need to be lodged for their removal.
- Any encumbrance (other than those above) will require written consent from the holder of the encumbrance.
In all cases, any written consent must be clear as to the new land the encumbrance will be brought forward onto (i.e. the new lot on the termination deposited plan).
If a new strata titles scheme is being registered together with a Disposition Statement (Conversion of tenancy in common to strata titles scheme) and simultaneously with (but following) the termination, the written consent endorsed on that Disposition Statement may be sufficient for this purpose where it complies with the requirements in section 8 of guide STR-02 Lodgement and Registration of New Strata Titles Schemes.
Upon registration, for terminations by a single owner, the registered proprietors who was the single owner of all lots in the scheme becomes the owner of the lot on the deposited plan. For terminations by unanimous resolution, the registered proprietors who were the owners of the lots immediately before termination become the owners of the lot on the deposited plan as tenants in common in shares proportional to the unit entitlements of their respective lots. Where the scheme being terminated is a leasehold scheme, the owner of the leasehold scheme becomes the owner of the lot on the deposited plan.
2Section updated 11/11/2024
3. Application for Termination (Majority Vote) (section 191 or 193 of the Act)
The proponent can lodge an Application for Termination of Scheme if:
- all the lots in a strata titles scheme are not owned by the same person for schemes of 5 lots or more; and
- a termination resolution is passed by majority vote (the vote attached to 80% or more of the lots in the scheme is in favour of the termination); and
- SAT confirms the termination resolution.
This application is to be accompanied by:
- any documents necessary to remove encumbrances from the strata lots, common property, and leasehold reversionary title (if any) or the written consents to bring those encumbrances forward (if required);
- Statement to Deal with Land of how each item registered or recorded for the scheme in the Register is to be dealt with;
- Certificate of strata company - termination of scheme:
- a certified copy of SAT’s Order confirming the termination resolution;
- Statutory declaration by the proponent (i.e. the Applicant) that the termination proposal hasn’t been withdrawn and that there are no reasons under section 187(1) of the Act for the termination proposal to not proceed further;
- Consent of the Owner of a Leasehold Scheme, if leasehold scheme and applicant not the OLS; and
- Deposited plan endorsed with approval of the Western Australian Planning Commission (to be lodged by the surveyor).
Consideration needs to be given to any encumbrances affecting the land the subject of the termination (i.e. on the strata lots, common property, and leasehold reversionary title (if any)). Whilst it is recommended that the land be free of encumbrances prior to termination, the following circumstances may apply:
- Easements or restrictive covenants created under section 33 (or formerly section 5D) of the Act are automatically discharged upon termination, with no further action required.
- Easements created under section 136C of the TLA should be removed by application made under section 136J of the TLA where the benefit and burden of the easement are between lots within the scheme, or where they burden lots within built strata schemes benefitting land outside the scheme.
- A mortgage over part or the whole of the parcel may be brought forward with the written consent of the mortgagee.
- However, in circumstances that the mortgage will remain registered over part only of the new lot on the termination deposited plan after termination, the mortgagee will need to clearly acknowledge in that written consent that it may result in the restriction of the ability to exercise a power of sale.
- A lease creating temporary common property, should be surrendered.
- Any encumbrance that benefits a lot within the scheme that will have no effect after termination must be removed.
- Any encumbrance that has been brought forward onto the termination deposited plan will not require written consent, unless stated otherwise above. However, if they have not been shown, the appropriate documents will need to be lodged for their removal.
- Any encumbrance (other than those above) will require written consent from the holder of the encumbrance.
In all cases, any written consent must be clear as to the new land the encumbrance will be brought forward onto (i.e. the new lot on the termination deposited plan).
If a new strata titles scheme is being registered together with a Disposition Statement (Conversion of tenancy in common to strata titles scheme) and simultaneously with (but following) the termination, the written consent endorsed on that Disposition Statement may be sufficient for this purpose where it complies with the requirements in section 8 of guide STR-02 Lodgement and Registration of New Strata Titles Schemes.
Upon registration, persons who were owners of the lots in the scheme become owners of the lot on the deposited plan, as tenants in common in shares proportional to the unit entitlement of their respective lots. Where the scheme being terminated is a leasehold scheme, the person who was the owner of the leasehold scheme becomes the owner of the lot on the deposited plan.
4. Variation upon Damage or Destruction (Section 166 of the Act)
Where a building is damaged or destroyed, the strata company, an owner or a registered mortgagee of a lot in the scheme or, for a leasehold scheme, the owner of the leasehold scheme, may apply to SAT to vary the existing scheme or substitute a new scheme. On lodgement of a General Application with the Order, the Registrar of Titles will make the appropriate amendments on the strata plan .
5. Variation on Taking (compulsory acquisition) of Part of the Parcel (Sections 167-169 of the Act)
The strata company, owner of a lot in the scheme, a registered mortgagee of a lot in the scheme or, if a leasehold scheme, the owner of the leasehold scheme may apply to SAT for an order to vary the scheme, or substitute a new scheme, where part of the parcel of the scheme is subject to a taking order.
The authority acquiring the land must lodge a redefining plan with the Registrar of Titles that complies with the Strata Titles (General) Regulations 2019.
6. Termination by the Taking (compulsory acquisition) of the Whole of the Parcel (Section 196 of the Act)
The Minister may in a Taking Order declare that the strata titles scheme is terminated on registration of that Order.
The Registrar of Titles will register the land in the parcel in the name of the State of Western Australia or other authority in which it has vested under the Taking Order.
7. Expiry of a Leasehold Scheme
Either the owner(s) of the leasehold scheme or the owner(s) of a lot in the leasehold scheme (if the owner of the leasehold scheme has not given notice) may lodge a Notice of Expiry of Leasehold Scheme for registration by the Registrar of Titles. It must be lodged at least 1 month before the expiry day of the scheme and not earlier than 3 months before the expiry day of the scheme.
It must be accompanied by the following documents:
- Statement to Deal with Land;
- Other evidence that the requirements of the Act have been complied with.
The Notice will be lodged against all leasehold strata titles, the title for the reversionary interest in the land and the strata/survey-strata plan. Upon expiry day, the leasehold strata titles will be cancelled, the title for the reversionary interest in the land will be updated and the strata titles scheme expired.