New South Wales Consolidated Acts

STRATA SCHEMES (LEASEHOLD DEVELOPMENT) ACT 1986 - SECT 37

37 Expiry of leases of lots

(1) When all leases of the lots and common property (if any) that are the subject of a leasehold strata scheme expire or are otherwise determined without being wholly or partly replaced by further leases of the lots or common property registered under the Real Property Act 1900 , then except as otherwise provided by this section:

(a) the scheme is terminated,

(b) the body corporate constituted for the purposes of the scheme is dissolved,

(c) if the leases so provide or it is so provided in any other agreement, the former lessor under the scheme is liable to pay to each person who, immediately before the termination of the scheme, was the lessee of a lot (in this section referred to as "the former lessee") such amount by way of compensation, determined in accordance with the formula set out in Schedule 2 or as otherwise agreed by the former lessor and former lessee, in respect of the value of the improvements comprised within the former parcel as is attributable to the lot leased by the former lessee,

(d) all rights which were vested in the body corporate immediately before its dissolution (being rights which, but for the dissolution of the body corporate, would have survived the expiry of the term of the leases) are vested in the former lessees,

(e) the former lessees become jointly and severally liable for all of the liabilities of the body corporate subsisting immediately before its dissolution, and

(f) any legal proceedings begun by or against the body corporate may be completed by or against the former lessees.

(2) As soon as practicable after the termination of a leasehold strata scheme, the Registrar-General shall, on the application of the lessor under the scheme:

(a) cancel the folios of the Register for the leases of the lots and common property comprised in the scheme,

(b) cancel the strata plan relating to the scheme, and

(c) record on the folio of the Register relating to the parcel that was the subject of the scheme the fact that the scheme has terminated.

(3) Where, in relation to a lot comprised in a leasehold strata scheme that is about to be terminated by virtue of subsection (1) or to a former lot that was comprised in a leasehold strata scheme that has already been so terminated, a dispute arises as to the amount to be paid in respect of the value of improvements under subsection (1) (c) to the lessee or former lessee of that lot, that dispute shall be resolved:

(a) if the lease of that lot so provides or so provided or the parties to the dispute otherwise agree, by reference to arbitration under the Commercial Arbitration Act 1984 , or

(b) in any other case, by an order of the Supreme Court.

(4) An application for an order under subsection (3) (b) may be made by any party to the dispute concerned.

(5) Notice of the application shall be served, in accordance with rules of court, on such persons as the Supreme Court may direct.

(6) As far as practicable, all applications which relate to the same leasehold strata scheme shall be heard together.

(7) At any time before the expiry of the terms of leases of the lots and the common property (if any) comprised in a leasehold strata scheme, the lessee of any of those lots, the body corporate or any creditor of the body corporate may apply to the Supreme Court for an order under subsection (10).

(8) Notice of an application under subsection (7) shall be served, in accordance with rules of court, on every person referred to in that subsection other than the applicant and on such other persons (including creditors of the body corporate) as the Supreme Court directs.

(9) The person making an application under subsection (7) and any person referred to in subsection (8) (whether served with a copy of the notice of the application or not) is entitled to appear and be heard at the hearing of the application.

(10) At the hearing of an application under subsection (7), the Supreme Court may make an order to the effect that, notwithstanding the expiry of the leases of the lots and common property (if any) the subject of the leasehold strata scheme concerned, the body corporate shall continue in existence for the purposes specified in the order until such date as may be specified in the order or in a further order of the Supreme Court.

(11) An order made under subsection (10) may include directions for or with respect to any of the following matters:

(a) the sale or disposition of any property of the body corporate,

(b) the discharge of the liabilities of the body corporate,

(c) the termination of any development scheme that relates to the parcel and the cancellation of the development statement concerned,

(d) the persons liable to contribute money required for the discharge of the liabilities of the body corporate and the proportionate liability of each such person,

(e) the distribution of the assets of the body corporate and the proportionate entitlement of each person under that distribution,

(f) the administration and functions of the body corporate,

(g) any legal proceedings which have been brought by or against the body corporate and which are currently pending,

(h) the voting power at meetings of the body corporate of persons referred to in paragraphs (d) and (e),

(i) any matter in respect of which it is, in the opinion of the Supreme Court, just and equitable, in the circumstances of the case, to make provision in the order,

(j) the winding up of the body corporate (including the appointment and functions of any person to carry out the winding up).

(12) An order under subsection (10) shall have effect according to its tenor notwithstanding any other provision of this Part.

(13) The Supreme Court may, from time to time, vary any order made under subsection (10) on the application of any person who was entitled to appear and be heard on the hearing of the application for that order.