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Strata arrangements now confirmed

THE Australian Securities and Investments Commission has issued its final policy on the application of the Corporations Law to promoting and operating serviced strata arrangements.

For the property industry the good news is:

• Classic real estate deals and small property syndicates have been given a blanket exemption from complying with the Managed Investments Act

• The compliance process has been clarified.

The bad news is:

• A group of unitholders can sack an operator and force transfer of management rights to another operator. The opportunity for collusion by unitholders to gain financial leverage over operations is clear

• Real estate agents have received a raw deal. Not only must they now be licenced dealers but there is also a lack of clear transitional arrangements.

Policy Statement 140 generally reaffirms the revised Interim Policy Statement 140, despite extensive lobbying and numerous submissions by the property industry.

The result is still a widely cast net because of the general and somewhat vague definition of ‘serviced strata scheme’.

You can download the statement from www.asic.gov.au – the ASIC’s website.

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