On the 11 December 2023 the NSW strata and community title legislation changes came into effect.

If you live or work in strata or community title it is important that you are aware of the changes to the law as follows: 

Original Owners Votes

•  If a scheme comprises of more than two lots the amendments provide that the value of a vote cast by an original owner, usually a developer, of a strata scheme may be reduced.

Strata Committees

• Committee member removal now only requires an ordinary resolution and once removed they’re not eligible to be on the committee for 12 months.

• Where it is called for, an election for a committee can take place at any general meeting, not just the AGM.

• A call for nominations to the committee must be included in the general meeting notice.

• A member with a conflict of interest must be excused from voting and discussion on that matter.

Strata Managers

• Must provide notice to the owners corporation 6 months prior to expiration of their agency agreement.
• Fair Trading can recommend to NCAT that a compulsory agent be appointed to manage dysfunctional strata schemes.

Internal Funds Transfer 

• Under the amendment for internal funds transfers, the owners corporation must, within three months of the transfer, decide at a general meeting, if the funds should be repaid, and if yes, how it should be done – via a simple reverse transfer or by special levy.

Emergency Repair Levies 

• The amendments will reduce from 30 days to 14 days the time period for payment of a special levy for urgent repairs. This amendment is for necessary building repairs to mitigate any serious and imminent threats to the health and/or safety of building occupants.

Work Quotes

• Multiple quotations for works exceeding $30,000 will now be required for all schemes – small and large – Also, the comparative quotations will need to be for people or companies that are not connected with each other.

Pets

• A pet bond or fee can no longer be charged by the owners corporation.
• A by-law cannot impose unreasonable burdens on people with assistance animals.

By-laws

• Under the changes, owners corporations may consolidate the by-laws for the scheme only by special resolution – whether or not a by-law has been amended, repealed or added.
• Two lot strata schemes do not need to pass a resolution to issue a ‘Notice to Comply’ regarding a by-law breach.

Books and Records

• The strata roll and other mandatory records must now be kept electronically.

Rentals

• Rental agents will be required to give tenants and lessees a copy of a strata scheme’s by-laws and strata management statement on commencement of a lease and whenever documents are updated if they are not provided by the landlord or head tenant.
• Rental agents will have to provide the owners corporation notice that a lot has been leased or subleased if the notice hasn’t been provided by the landlord or head tenant.
• Tenants can give notice of the lease to the owners corporation if the landlord, head tenant or rental agent fails to do so. In giving notice of the lease or sublease the regulations may prescribe the documents or other evidence a tenant must provide.

Service of Documents

• The regulations may provide for the service of documents, including by prescribing additional methods of service.

Meetings

• General Meeting Notices – time period for notices increases from 7 days to 14 days.
• Company Nominees – number of votes to be limited in a similar way to the way proxy votes are limited.
• AGM – Delivery of development documents by the developer must be done 14 days before the first AGM.

Community Titles 

• Most of the above proposals will also apply to Community Title regulations.

Strata Renewals

• Allowing a strata renewal committee to operate for 2 years instead of 1 year to reflect the length of time it can take for that committee to develop a strata renewal proposal.
• Permitting the Land and Environment Court to allow a collective sale of a strata building to proceed even though some of the preliminary steps associated with the sale have not been followed correctly (eg; inadequate meeting notice periods) if that has not resulted in a substantial injustice.
• Allowing dissenting owners who do not object in good faith to have costs awarded against them (eg; where an objecting owner is a developer who is trying to obstruct a collective sale to another developer)

More information

NSW Government – https://www.nsw.gov.au/media-releases/critical-reforms-to-strata-laws

Amendment Bill – https://www.parliament.nsw.gov.au/bills/Pages/bill-details.aspx?pk=18511

Timeline – https://www.parliament.nsw.gov.au/bill/files/18511/SPI%20-%20Strata%20Legislation%20Amendment%20Bill%202023.pdf

CLICK HERE NOW FOR STRATA REFORM ADVICE

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist. 

Restricting or Banning Smoking in Strata

Smoking in strata buildings is a hot topic as Queensland grapples with a proposal to change their strata laws to allow smoking to be prohibited in strata buildings.  There are many buildings that have introduced by-laws banning smoking.  But most strata buildings still do not have a by-law concerning smoking.  So, is it possible to stop people smoking in a strata building without a by-law that bans smoking?  And if it is possible to stop smoking without a by-law, is it still necessary or desirable to have a by-law that bans or restricts smoking and, if so, why?

Banning Smoking without a By-Law

Somewhat surprisingly, it is possible to stop residents of a strata building smoking in their lots or on common property without a specific by-law that prohibits smoking.  Section 153 of the Strata Schemes Management Act 2015 prohibits residents from using or enjoying their lots in a manner or for a purpose that causes a nuisance or hazard to another resident. There are now three cases in which NCAT has made orders prohibiting residents in strata buildings from smoking on the basis that smoke caused by smoking constituted a nuisance to other residents in contravention of section 153.

NCAT Cases

In May 2019, a lot owner, Martin Gisks, succeeded in obtaining an order from NCAT prohibiting the resident of another lot in his building smoking on her balcony or in her bedrooms and requiring that resident to close all exterior doors and bedroom and bathroom windows when smoking inside her lot (Gisks v The Owners – Strata Plan No. 6743 [2019] NSWCATCD 44).

In October 2022, lot owners in a different building, Mr Pittman and Ms Cartwright, obtained orders from NCAT prohibiting the owners of another lot smoking or permitting any other person to smoke tobacco products on the balcony of their lot, and prohibiting them from permitting smoke from any tobacco product to be emitted from the interior of their lot into the lot of Mr Pittman and Ms Cartwright (Pittman v Newport [2022] NSWCATCD 173).

More recently, in June 2023, an owner in a strata building, Haydn Shaw, obtained an NCAT order prohibiting the owner and resident of another lot permitting the smoking of tobacco products in the courtyard of their lot (Shaw v Euen [2023] NSWCATCD 68).

In each case, NCAT concluded that the smoke caused by the smoking of cigarettes or tobacco products by residents constituted a nuisance which interfered with the amenity of other residents in contravention of section 153 of the Act.  It was on that basis that NCAT made orders prohibiting or restricting smoking in each of these cases.

Is a By-Law Banning Smoking Desirable?

These NCAT cases beg the obvious question:  does an owners corporation need to bother introducing a by-law prohibiting or restricting smoking?  The answer is “Yes” if the owners corporation wants to make it easier to ban or restrict smoking in its building.

This is because without a by-law that bans or restricts smoking:

• the owners corporation may not have standing to apply to NCAT for orders to prohibit residents smoking in a way that causes a nuisance to other residents because the owners corporation itself has not suffered from that nuisance (The Owners – Strata Plan No. 2245 v Veney [2020] NSWSC 134); and
• there is a need to prove that not only particular residents are smoking but also that the smoke from cigarettes or tobacco products has caused a nuisance to other residents by unreasonably and substantially interfering with the use and enjoyment of their lots (something which may be difficult to do).

In other words, if a by-law exists that bans smoking the owners corporation is able to enforce that by-law and to succeed it does not need to show that smoke from cigarettes constitutes a nuisance to other residents.  The owners corporation just needs to prove that particular residents are smoking in breach of the by-law.  That is much easier to do.

Conclusion

It is possible to stop residents smoking without a by-law that bans smoking.  However, it is much more difficult to do so because it requires proof that the smoking causes a nuisance to other residents.  And there is real doubt that an owners corporation can apply to NCAT for an order to stop residents smoking in those circumstances.  Introducing a by-law prohibiting or restricting smoking overcomes those problems, gives the owners corporation the right to take steps through NCAT to prevent residents smoking and makes it easier for the owners corporation to win the case and put an end to smoking in its building.

DO YOU NEED A BY-LAW THAT PROHIBITS OR RESTRICTS SMOKING? CLICK HERE NOW!

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

Does an owners corporation have to enforce its by-laws?  If an owners corporation decides to ignore breaches of its by-laws, can NCAT force the owners corporation to take action and enforce its by-laws?  A recent NCAT case provides the answer to these questions.

Introduction

Almost every strata building is governed by a set of by-laws. Those by-laws set out rules that regulate behaviour, noise, the keeping of pets and, among other things, the performance of renovations.  The by-laws are binding on the owners corporation and the owners and occupiers of the lots.  An owners corporation has the power to enforce the by-laws if they are breached.  For example, an owners corporation can issue an owner or occupier of a lot with a notice to comply with a by-law or apply to NCAT for an order to require the owner or occupier to obey a by-law.  But what happens when an owners corporation decides to turn a blind eye to a breach of a by-law committed by an owner?  Can the owners corporation be forced to enforce the by-law against the culprit?  If so, by whom?  A recent NCAT case reveals the answers to these questions.

The Case

Suzanne Lyon owns a lot in a residential strata scheme in Wollstonecraft, Sydney.  In August 2020, the owners corporation created a common property rights by-law to give the owner of the lot beneath Ms Lyon’s lot, Mr Swanson, the right to build a pergola over his rear courtyard.  Subsequently, Mr Swanson built the pergola, but Ms Lyon claimed that the pergola did not comply with the by-law because it was too high.  The by-law had permitted the pergola to be 2.7m above the concrete floor of the courtyard but it was built about 3.21m above that concrete floor.  Ms Lyon wanted the pergola to be removed or modified but the owners corporation was not prepared to force Mr Swanson to change the pergola.  For that reason, Ms Lyon sued the owners corporation in NCAT and sought orders to require the owners corporation to remove Mr Swanson’s pergola or enforce the common property rights by-law by requiring the pergola to comply with it.

The Outcome

Ms Lyon’s claim was partially successful.  NCAT agreed with Ms Lyon that the pergola was too high and was not built in accordance with the by-law.  NCAT then considered whether it had power to make an order to force the owners corporation to enforce the by-law and require Mr Swanson to comply with it by changing the height of the pergola.  NCAT concluded that it did have that power because it could make an order, on the request of an owner, to settle a complaint or dispute about the failure of an owners corporation to exercise its functions including its power to enforce a by-law.  NCAT held that there would be a sufficient basis to make an order where an owners corporation has a discretion to exercise a function (such as its discretionary power to enforce a by-law) but decides not to do so.  NCAT considered that there was little point in the strata legislation creating a mechanism for an owners corporation to pass a common property rights by-law merely to have that by-law flouted and for the owners corporation to fail to act in the face of complaints from other owners and legal advice it had received.  Ultimately, NCAT concluded that the owners corporation’s failure to manage Mr Swanson’s non compliance with the by-law, or to make any attempt to require him to comply with the by-law, meant that an order should be made requiring the owners corporation to exercise its functions to administer the strata scheme for the benefit of the owners and in accordance with the by-laws.

The Orders

For those reasons, NCAT ordered the owners corporation to take all necessary steps to require Mr Swanson to comply with the by-law by requiring him to reduce the height of the pergola to 2.7m above the concrete surface of his courtyard.  However, NCAT gave the owners corporation 6 months to comply with that order to allow Mr Swanson sufficient time to apply to the owners corporation for approval to amend the by-law to permit the pergola to remain at a height of 3.21m above the courtyard floor and for that amendment to the by-law to be approved by the owners corporation.

Analysis

This case is one of the first times that NCAT has made an order to compel an owners corporation to enforce its by-laws.  The decision does break new ground because it was previously thought that because the Strata Schemes Management Act 2015 does not explicitly require an owners corporation to enforce its by-laws but rather gives an owners corporation a discretion to do so, it was not possible for NCAT to force an owners corporation to require owners and occupiers to comply with its by-laws.  The order made in the case begs the question: What does the owners corporation need to do to take “all necessary steps” to require an owner to comply with a by-law?  Does that require the owners corporation to issue a notice to comply with the by-law against the owner?  Or does it require the owners corporation to do more and, if necessary, take legal action against the owner to force him or her to comply with the by-law?  And what if the owners corporation is successful in that legal action, but the owner ignores orders that are made to require him or her to comply with the by-law?  What is the owners corporation required to do then?  It remains to be seen whether those questions will need to be answered by NCAT in the future.

Conclusion

The case sends a message that owners and occupiers of lots who are affected by breaches of the by-laws committed by other owners and occupiers are not helpless.  They can apply to NCAT for orders to force their owners corporation to enforce the by-laws against those in breach of them.  It remains to be seen whether the decision in Lyon v The Owners – Strata Plan No. 11045 [2023] NSWCATCD 31 will be followed in future cases.

/*! elementor - v3.14.0 - 26-06-2023 */
.elementor-widget-image{text-align:center}.elementor-widget-image a{display:inline-block}.elementor-widget-image a img[src$=".svg"]{width:48px}.elementor-widget-image img{vertical-align:middle;display:inline-block}

Adrian Mueller I BCOM LLB FACCAL I Partner

Since 2002 Adrian has specialised almost exclusively in the area of strata law. His knowledge of, and experience in strata law is second to none. He is the youngest person to have been admitted as a Fellow of the ACSL, the peak body for strata lawyers in Australia. Profile I Linked

Contact Us

For all strata law advice including by-laws, building defects and levy collections contact our specialist NSW and Sydney strata lawyers here or call 02 9562 1266, we’re happy to assist.

New building defects laws which commenced in June 2020 received considerable media attention.

Those laws are contained in the Design and Building Practitioners Act 2020 and impose on builders and others involved in the construction of apartment buildings a statutory duty of care to avoid loss caused by defects.

The new laws give owners corporations greater powers to make defects claims against builders and others.

However, a recent case which dealt with another statutory duty of care highlights some of the issues that will confront an owners corporation which makes a defects claim under the new laws.

In this article we take a look at that case and explain what relevance it has to defects claims that will be brought by owners corporations under the Design and Building Practitioners Act 2020.

The full case can be read here Building Defects Claim Duty of Care

For all NSW strata legal including by-law, building defect and levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.

NCAT’s Appeal Panel has decided that strata records are not protected by privacy laws and that an owner is entitled to inspect strata records that relate to other owners.

Here we share the following case confirming that a strata manager or owners corporation cannot refuse to make available for the inspection of an owner records which the owner is entitled to inspect under the Strata Schemes Management Act 2015 on the grounds of privacy and that those records are not protected by privacy laws.

Read the full case here: Strata Records not Protected by Privacy By-laws

For all NSW strata legal, by-law, building defect and levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.

In a recent decision, the Appeal Panel of NCAT has approved of a by-law which introduced a “user pays” system for the cost of electricity used to keep hot water supplied to some but not all lots in a mixed-use strata scheme.

This decision confirms that an owners corporation is able to make a by-law that introduces a “user pays” system for utilities costs such as water, electricity and gas expenses.

Based in Byron Bay this case is an important step in confirming that an owners corporation is able to introduce a “user pays” by-law for the cost of utilities that are supplied to some but not all lots.

JS Mueller & Co Lawyers has drafted many of these types of by-laws which are not uncommon.

To read the full article click here: NCAT Gives the Green Light for User Pays By-laws

For all NSW strata legal, by-law, building defect and levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.

In a surprising decision, the Supreme Court has recently held that lot owners are able to start legal action in NCAT to force an owners corporation to grant them a licence to use common property before the owners corporation has rejected their proposal for a licence.

This decision will alter the strategy of some owners who want to obtain special rights over areas of common property and may result in the commencement of litigation to gain leverage over an owners corporation.

Ultimately this case gives NCAT a mandate to attempt to resolve strata disputes in a more flexible way.

Read the full case here Supreme Court, NCAT and A Load of Rubbish

For NSW strata legal, by-law, building defect and levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.

Get Your By-Laws Checked: New Rules for Abandoned Goods and Vehicles on Strata Properties

On 1 July 2020, the NSW legislation for abandoned goods on strata properties moved to the Uncollected Goods Act 1995 and will therefore no longer be regulated under the Strata Schemes Management Act 2015 and strata regulations.

This means what can be done to dispose of or sell abandoned goods on common property in NSW strata buildings has changed.

A Quick Summary of the New Rules for Abandoned Goods

1.The Uncollected Goods Act 1995 (Act) is the law that now governs goods and vehicles abandoned on common property within strata properties in NSW.

2. The Act divides abandoned goods into six categories with different rules and procedure applying to each category. The six categories are:

• • Perishable
  • Low Value
  • Medium Value
  • High Value
  • Personal Documents and Memorabilia
  • Motor Vehicles (an owners corporation can move vehicles that it reasonably believes have been abandoned on common property)

3. A person disposing of the abandoned goods will not be liable for doing so if they follow the procedures set out in the Act. This includes disposing of abandoned goods in accordance with an order made by the NSW Civil and Administrative Tribunal (NCAT) as NCAT has the power to order the disposal and management of the goods.

4. Under the Act, uncollected goods including any goods that owners reasonably believe to be abandoned or left behind on common property.

5. Appropriate records of the sale or disposal of the abandoned goods must be kept by the party disposing the goods and who it went to as follows:

• • Low value items documentation must be kept for at least 12 months
  • Higher value items plus their records must be kept for at least 12 years

6. If you don’t know the person who owns the abandon goods, you should make a reasonable effort to identify the owner of the goods and communicate with them.

7. The strata committee can request that additional expenses for removing, storing, maintaining or insuring the goods are covered.

8. A person cannot confiscate and refuse to return the goods because the owner owes money for other debts, such as rent or levies.

9. For more information visit Fair Trading NSW ‘uncollected goods and vehicles in strata schemes’.

10. You will need to update your abandoned goods and vehicle by-laws to ensure they are in line with these new laws.

For NSW strata legal, by-law, building defect and levy collection advice contact us here or call 02 9562 1266, we’re happy to assist.

Here we share the top five most useful strata by-Laws with factsheets.

Muellers has drafted 1000’s of by-laws over the course of 40 plus years.

During that time we’ve learnt what does and doesn’t work.

So what are the five most useful by-laws and why?

Here’s our shortlist for you to download and share:

1. Cost Recovery By-Law
2. Master Renovations By-Law
3. Parking By-Law
4. Proxy By-Law
5. Repairs By-Law

For NSW strata legal, building defects or levy collection advice please contact us here or call 02 9562 1266, we’re happy to assist.