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28/01/2020 at 3:19 pm #48191CountryBumpkinFlatchatter
Our Owners Corporation reviewed all our bylaws as required post-2015 (when the new Strata legislation came in force), which led to an almost total re-write of many old bylaws. The then-Committee used the exercise in part to dramatically expand its powers in many areas of building management, a few of which I took issue with at the time – but as there had been little prior consultation and as the owners had 30+ new or re-written bylaws to consider at the 2017 AGM (along with all the other normal AGM business) most were simply waved through at the time.
Almost three years have passed since the 2017 AGM and we now have a different Committee of which I’m one of six (although there are still three others who were part of the 2017 Committee). There is now a (very small) appetite to review the 2017 bylaws, and one in particular strikes me as an ongoing problem. This bylaw, entitled “Rules in Building”, reads as follows:
25.1 The Strata Committee may make Rules about the security, control, management, operation, use and enjoyment of the (name of building) and the Recreational Facilities.
25.2 The Rules may not be harsh or oppressive.
25.3 The Strata Committee may add to, delete or change the Rules at any time.
25.4 The Owners Corporation may add to, delete or change the Rules made by the Strata Committee at a duly convened general meeting.
25.5 An Owner or Occupier must comply with the Rules.
Now my (non-legal) mind tells me that there is in practice no difference between a bylaw and a “rule” – certainly the Act does not mention “rules” as a sub-set of bylaws. Of course, bylaws have to go to a General Meeting of all Lot owners and be approved by a 75% majority, and be registered, before they become enforceable.
This bylaw, however, attempts to give the Strata Committee extremely broad powers to make rules (bylaws?) on just about anything they please, although there is the ability for them to be changed at a subsequent General Meeting. It is also of note that the wording of our bylaw is almost a direct lift from the By-law Division of the Act (specifically 136 and 139)
Similar powers have been added to many other bylaws. For example, most recently, this delegated power to make rules has been used by the Committee (without my vote) to decide that access to the visitors parking area can be denied for breaches of the parking bylaw through de-activation of swipe access – one month “lockout” for the first breach, three months for the second breach, and so on.
Of course there’s a whole separate issue here about the legality of deactivating keycards accessing common areas, recently referred to in the front page on using this tactic for controlling STLs, but that’s for another post.
So, my basic question is: In NSW, is there such a thing as a strata/house “rule” that can be created and enforced by the SC without first being approved at a General Meeting, and if so, are there restrictions on how broadly or on what matters they can apply?
A further question is: Is it possible for the Owners Corporation, through the creation of a bylaw, to effectively delegate the making of bylaws to the Committee (even if they are re-badged as “rules”)?
I would suspect not, as 36.3(a) of the Act clearly states that a Strata Committee cannot make decisions on matters where the Act requires a special resolution of the OC, so unless rules are somehow not considered bylaws then any rule/bylaw can only be made by special resolution at a General Meeting.
I’m looking forward to seeing your responses.
28/01/2020 at 3:34 pm #48197
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Basically, the owners corp is charged with the management of common property and can pass by-laws that enable or assist them in doing that. One of those by-laws would be to allow for rules to be created and imposed.
It is common, therefore, for there to be rules limiting , say, accessto swimming pools and gyms after certain hours as this would not be considered unreasonable.
However, they are overstepping the mark if they limit access to common property as a punitive measure. As our chums at Lookupstrata point out in this factsheet, you can’t restrict owners’ reasonable access to common property so any by-law that attempted to do so would be invalid.
Also you want your rules to be flexible for the simple reason that you are dealing with people and everyone is different. Say you wanted to restrict access to your pool to say 8 am to 9 pm, and then you discover you have a kid in the building who is a potential Olympiand and needs to swim fro a couple of hours from 5 am every morning? Are you really going to restrict them.
So what’s missing from the “enabling” by-law are acceptance that no rule can be in violation of strata law or any superior law, that the rules can be reviewed and changed at any time by a simple majority of the owners corporation and that exceptions can be made provided there is written permission from the committee to do so.29/01/2020 at 12:34 am #48207CountryBumpkinFlatchatterChat-starter
Thanks for your prompt reply Jimmy, and your advice.
To be clear, are you saying that an Owners Corporation through a By-law can delegate to the Strata Committee the ability to make “rules” about anything at all to do with the Scheme, as long as it doesn’t violate any superior law and can later be reviewed by a General Meeting?
This would seem to me to be effectively giving the Strata Committee the power to create By-laws simply by re-badging them as Rules.29/01/2020 at 12:39 am #48210
No, because NSW “rules” can be changed by a simple majority at a general meeting whereas by-law changes require a 75 per cent majority.
If the condition is not created by a special resolution then it doesn’t need a special resolution to change it, and therefor is not a by-law.
The strata committee is often empowered to make decisions on behalf of the owners corproation. But the OC can undo the decisions at a subsequent general meeting.
Apologies to Victoria readers where “rules” is the term used for by-laws.29/01/2020 at 12:40 am #48206kaindubFlatchatter
In my humble opinion, the concept of rules in strata is fraught with danger.
Lets see how I can explain.
The SSMA prescribes that the “rules” of a strata are embodied in the bylaws. The by laws are voted on by the owners, and are enforceable by a court of law.
Some strata can make rules ie put your own bin out, no jumping in the pool, but unless these are embodied in a bylaw they are just advisory. The rules are not enforceable , especially in a court of law. Ie the OC has no legal standing to enforce penalties for a breach of rules , whether by a fine or other means. Remember even in the case of a breach of a by law, it’s the court that imposes the penalty.( though it’s paid to the OC)
Now I would not suggest that strata don’t have some simple rules. It provides a quick way to manage simple problems but it depends on the goodwill of owners to make them work.
If the issue is more complex (let’s say owners lending swipe cards to non owners), then a bylaw should be struck.
My opinion – bylaws are fully enforceable, rules are not.29/01/2020 at 12:55 am #48212
Kaindub said: My opinion – bylaws are fully enforceable, rules are not.
I don’t think it’s as simple as that. Strata law itself is structured with the Act (laws) and Regulations (rules).
I don’t think you can or should have a specific rigid by-law to cover every little area of strata scheme management, nor do I think that rules are unenforceable if they are covered by a valid enabling by-law.
If a by-law says the strata scheme can impose rules, for instance, on the use of visitor’s parking, and those rules are published as part of the current by-laws (and then re-published if they are changed, for whatever reason) then breaches can be pursued via Notices to Comply.
Don’t forget that a Notice To Comply is basically both a warning and a threat and the warning part must include the specific part of the bylaw that has allegedly been breached.
I can’t see how telling someone to stop breaching rule x of by-law z (which is then spelled out) is not a valid Notice to Comply.
29/01/2020 at 6:53 am #48214scotlandxStrataguru
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I agree with Kaindub, a rule made just by the Committee is not the same as a by-law, and doesn’t have the same status. So for example you couldn’t apply to NCAT for a fine for breach of a rule.
The comparison with regulations which form part of the law isn’t correct.
The Act provides for the owners corporation making by-laws, it doesn’t provide for the Committee making rules as a subset. The enforceability of any by-law or rule comes from the Act.
29/01/2020 at 8:55 am #48216Sir HumphreyStrataguru
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In the ACT the term ‘rules’ is used for what is ‘by-laws’ or ‘articles’ in other jurisdictions. I expect principles remain the same. So, for example, it is possible to have a rule/bylaw/article that has been properly adopted by the correct class of general meeting resolution that has some flexibility/judgement for the committee built in.
So, just for an example, in the set of townhouses where I live, one of our rather minor rules states: “A unit owner must only store bins for rubbish and recycling within the unit area, unit subsidiary or such other areas as may be approved from time to time by the Owners Corporation (OC). Such areas may include purpose-built bin enclosures, the carports or shared carparks on common property and other places where bins can be stored unobtrusively without affecting the use and enjoyment of another unit owner.” A similar formula is used for other rules where the OC can (dis)approve this or that.
The Act in the ACT says that when the Act does not specify that a decision requires a resolution of a general meeting, and in the absence of a direction from the OC in the form of a general meeting resolution, then the committee exercises the functions of the OC as it considers appropriate. So, in the example above, it would be possible for an ordinary resolution of a general meeting to direct the committee to allow or disallow the storage of bins in a particular place. In the absence of such a direction, the committee can exercise its judgement about whether a unit owner storing their bin in some location would comply with the rule – the committee must decide whether storing a bin in some location is ‘unobtrusive’ and not ‘affecting the use and enjoyment of another unit owner’.
We had a matter go to the ACT tribunal (not about bins) where our argument about a similarly formulated rule was accepted and the unit owner was ordered to comply. The decisions of the committee were constrained by OC resolutions but within those constraints, the committee could exercise the functions of the OC.
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