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.

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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.

Fire Orders and Cost Recovery By-laws

An owners corporation is only responsible for the common property in its strata scheme.  So how does an owners corporation deal with a fire order that requires it to do work to lot property?  Can a Council issue a fire order against an owners corporation to do work to lot property? If so, can the owners corporation make a by-law to recover from owners the costs it incurs doing fire safety work in their lots? The answers might surprise you.

Strata Law

An owners corporation is the owner of the common property it is strata scheme.  The owners corporation is responsible for managing and controlling the use of the common property and maintaining and repairing the common property.  Those obligations arise under the Strata Schemes Management Act 2015 (Strata Act).

An owners corporation does not own the lots in its strata scheme, and under that Act, the owners corporation has virtually no responsibility in relation to any of the lots.  This is because the lots are privately owned and the owners and occupiers of the lots are generally responsible for managing and maintaining them.  So, under the Strata Act, the owners corporation is generally not responsible for maintaining and repairing lot property.  Further, in general, the owners corporation is only able to adopt budgets and raise levies to cover expenses associated with the common property, not lot property

Fire Orders

But what happens when a Local Council issues a fire order that requires an owners corporation to carry out work to both common property and lot property.  Does the Council have power to issue that order? And does the owners corporation have power to comply with the order and do work that affects lot property?

Planning Laws

The Environmental Planning and Assessment Act 1979 (EPA Act) gives a Local Council power to order the owner of premises to do things that are specified in the order in order the promote adequate fire safety in a building when provisions for fire safety in the building are inadequate to prevent, suppress or prevent the spread of fire.  The EPA Act says that premises include a building and that an owner includes, in the case of land that is the subject of a strata scheme, an owners corporation.  Therefore, the EPA Act gives a Local Council power to order an owners corporation to carry out work to improve fire safety to both common property and lot property.

Case Law

This was confirmed by the NSW Court of Appeal as long ago as 1985.  In 1985, the Court decided the case of Proprietors of Strata Plan 159 v Parramatta City Council.  In that case, the Council had issued a fire safety order to the owners corporation of a strata building which required the owners corporation to carry out fire safety upgrades principally in two lots which were to be used as a restaurant.  The owners corporation challenged the order and argued that the order unfairly burdened other owners with the costs of carrying out fire safety upgrades predominately to those two lots.  However, the Court concluded that the statutory language was clear in permitting a Council to issue a fire order against an owners corporation that required work to be done to lot property.  The Court acknowledged that this meant that sometimes the costs of complying with a fire order would be shared by all of the owners even when the need for fire safety upgrades was confined exclusively to the lots of some of the owners which may seem inequitable.

But the Court considered that there were two answers to this problem.  First, if the legislation clearly allowed a fire order to require an owners corporation to do work to lot property the mere fact that might produce a sense of injustice between owners was not a reason for the Court frustrating the clearly expressed intention of the legislature and it was a matter for the Parliament to change the legislation to overcome any unfairness if it saw fit to do so.  Second, fire is a phenomenon which endangers all owners and occupiers of lots meaning all owners have a common interest in fire prevention and fire safety.  This meant that it made sense for the legislation to allow the Council to issue one fire order against the owners corporation rather than have to issue and monitor compliance with multiple fire orders against numerous parties.  Ultimately, the Court considered that it was in the common interest of all owners for the Council to have the power to issue the fire order against the owners corporation.  The Court’s decision has recently been referred to with approval by NCAT.

Recovery of Costs

If a Council can require an owners corporation to carry out fire safety upgrades to lot property, can the owners corporation recover the cost of performing those upgrades from the relevant owners?  There is no clear answer to that question.  Many owners corporations have introduced cost recovery type by-laws that purport to allow them to recover costs from owners in a variety of circumstances.  There have been several recent cases in which NCAT has invalidated cost recovery type by-laws.  But there are also cases where NCAT has upheld cost recovery type by-laws. Ultimately, if an owners corporation wants to seek to recover from certain owners the costs it incurs carrying out fire safety upgrades in their lots, a cost recovery type by-law will need to be put in place but there may be difficulty enforcing the by-law.

Conclusion

A Council is entitled to issue a fire order against an owners corporation that requires fire safety upgrades to be carried out to lot property.  Where that occurs, the Strata Act gives the owners corporation the right to enter the lots in order the do the work required by the fire order.  If an owners corporation wants to recover the costs it incurs carrying out fire safety upgrades in a particular lot, a cost recovery type by-law will need to be put in place for that purpose.  However, NCAT has recently raised question marks over the validity of cost recovery type by-laws so the recovery of those costs cannot be guaranteed.

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.

Strata apartments come with many perks for owners and tenants but of course, there’s also a downside with one of the biggest complaints being noise. As more and more people enjoy apartment living noise complaints have increased in recent times by 33%* and they continue to rise.

What are top noise complaints in strata?

• Barking dogs
• Power tools
• Loud music
• Alarms
• Construction/renovations
• Vehicles
• Wooden/tiled floors
• Children

And… some of the more unusual complaints in more recent times include:

• Tap dancing
• Assembling IKEA furniture
• Loud urinating at night is becoming one of the most common reasons for sleep-­deprived apartment dwellers
• Late night showers

What if your strata by-law neglects to mention specific issues around noise?

A well written noise by-law can go much further than the model by-law and provide residents with guidelines and time restrictions for when they can and can’t make noise. It also lets neighbours know their rights if they feel the need to make a noise complaint.

Did you know if your noise by-laws are insufficient or lacking clarity on noise related matters our specialist team of strata lawyers can assist you in updating or developing your noise by-law.

*NSW Department of Fair Trading

DOES YOUR NOISE BY-LAW NEED TO BE REVIEWED?

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.

The NSW Department of Fair Trading have published information on the ‘fire safety regulations 2022′ with a fact sheet and FAQs explaining reforms in more detail. 

A timely reminder as the nights and days start to get cooler, winter will soon be here and as owners and tenants use heaters and other electrical items to warm apartments it increases the risk of fires in strata buildings as they choose to stay indoors and out of the cold.

What are the most common causes of fire?

According to Fire and Rescue NSW the most common causes of fires, especially in winter, are:

• Faulty electric and gas heaters
• Items placed too close to heaters
• Children knocking over heaters
• Portable outdoor heaters
• Overloaded powerboards
• Kitchen cooktops and appliances
• Wheat bags kept in bed
• Electric blankets
• Smoking and candles
• Electric bikes and scooters
• Buildings at risk with flammable cladding

Is your building fire safe?

Now is the ideal time to ensure you are familiar and up to date with the fire safety requirements for your strata building and to ensure:

• Your building has had its annual fire safety inspection by an accredited Fire Protection Association Australia (FPAA) inspector, and everything is in working order and in line with the NSW fire safety laws
• Your annual fire safety statement, which is mandatory for most buildings, is lodged with the local council and Fire and Rescue NSW

How do you help ensure your building is fire safe?

A ‘Fire Safety By-law’ can help ensure all tenants and lot owners are fully aware of the fire safety requirements they must obey and to not do anything that create’s a fire safety risk. 

This type of by-Law can also make tenants and owners liable for false fire alarm call out fees or for any damage they cause to the building. 

A ‘Fire Safety By-Law’ can greatly enhance the fire safety of your building, reducing your fire risk.

DO YOU NEED A FIRE SAFETY BY-LAW? CLICK HERE NOW!


DOWNLOAD YOUR FIRE SAFETY FACT SHEET HERE.

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.

As the financial pressure heightens with rising interest rates and cost of living increases we’re seeing more and more people default on their levy payments.

We all know that raising and collecting strata levies for building maintenance and scheme administration is fundamental to an efficiently run strata complex.

When owners corporations allow owners to fall behind in their levy payments it leads to cash flow problems for an owners corporation which could lead to critical building works not being addressed and many other issues.

Recovering Overdue Levies

The recovery of strata levies is unique and requires a detailed understanding of the various strata laws as they apply in NSW.

So, when it does become a legal issue, recovering overdue levies is highly technical with a number of steps that must be taken before commencing legal action to recover the overdue levies from an owner.

Muellers WINS Huge Levy Debt Case and Rewrites the Law!

Sale of Apartment Owned by Monk who Disappeared Overseas Sets Legal Precedent!

Owners Corporations and strata managers in NSW sometimes wonder how they can recover outstanding strata levies from owners of strata units who’ve disappeared and are nowhere to be found. Well, do not be disillusioned JS Mueller & Co Lawyers has now given hope to owners corporations and strata managers.

Read on…Sydney Morning Herald (SMH) Domain

Overwhelmed and Need Assistance with Levy Debt Recovery?

We are expert collectors and negotiators highly skilled in all essential aspects of levy debt collection.

• We have been collecting overdue levies for 30+ years.
• Our dedicated team of paralegals do nothing but levy debt collection.
• We do levy debt collection across regional and metropolitan NSW.
• We will get results.

Now you can, sit back, relax and let us collect those overdue levies for you!

Contact Us

Speak to the specialist NSW levy collections experts here, we’d be happy to assist.

Good renovation by-laws will protect all parties such as the owners corporation, the lot owner (and future owners) plus ensure any renovations to a lot, in particular structural, are safe for the building.

A good renovation by-law will outline items such as:

• A clear statement of the authorised work
• The time frame for completion
• Setting out any conditions that must be met
• All contractors details and their insurances
• Development consents
• Recording all works, including structural works
• Conditions that the lot owner and their contractor/s must adhere to
• How waste is to be dealt with
• Hours of work to minimise noise and disturbance to neighbours and the building
• Access and parking requirements to ensure minimal disturbance to other lot owners and common property areas
• Who is responsible for any ongoing maintenance
• Ensuring that all work complies with relevant standards and legislation such as the Building Code of Australia and the Design & Building Practitioners Act 2020
• Any nuances and more!

Why is it important to ensure that renovation by-laws are thorough?

Apart from wanting the renovation to run smoothly, the type of by-law to be used will depend on the renovation that is being undertaken. For example:

• Is the renovation a bathroom or kitchen renovation involving waterproofing or changes to floor coverings; and
• do you need a cosmetic, minor or major renovations by-law?

The tighter the renovation by-law the less likely there will be issues however in the event of an issue a well written by-law will more than likely get things back on track, minimising any disputes. A badly written renovation by-law may only exacerbate the situation and cause unwanted delays and disputes and may even end up in NCAT.

Are you in need of a renovation by-law?

Our legal team has significant expertise developing renovation by-laws for strata, company, and community living.

• We have been developing renovation by-laws for 40+ years.

• We know whether you will require a by-law for renovations for owners corporation approval.

• We guarantee within 7 days you will receive the right renovation by-law.

• We also understand that you ‘may’ need your renovation by-law urgently for an upcoming strata meeting – just let us know, we will make it happen.

DO YOU NEED A RENOVATION BY-LAW? CLICK HERE NOW!

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.

Common Property and Water Leaks

NSW has received a significant amount of rainfall over the last 18 months which has led to an increase in the number of claims made by lot owners against owners corporations in regards to common property and water leaks.

These claims can be challenging and difficult for an owners corporation to defend but a recent decision by the NSW Court of Appeal provides a glimmer of hope.

Here we share the case… A Glimmer of Hope for Owners Corporations

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.

Can a lot owner now make claims against building and strata managers for negligence?

A recent decision of the Appeal Panel of NCAT has not ruled out the possibility that NCAT may be able to award damages to a lot owner for negligence by a strata manager and/or building manager of a strata scheme.

What did the Appeal Panel find, based upon previous decisions considering the Tribunal’s powers?

Here we share the case: Damages Claims Against Strata Managers and Building Managers – NCAT Opens the Door

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.

Recent heavy rainfall in Sydney has led to an increase in compensation claims by lot owners against owners corporations due to water leakage and consequential damage.

Often, those claims are for loss of rent.

These types of claims are usually difficult for an owners corporation to defend because it has a strict duty to properly maintain and keep in good repair the common property.

However, in a recent case, the Supreme Court rejected a compensation claim by an owner for loss of rent, providing a glimmer of hope for owners corporations.

Here we share the case and outcome Supreme Court Rejects Owners Claims for Damages

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.

The NSW government deadline for annual reporting for strata schemes must be completed by 31 December 2022. This also includes 2-lot schemes.

Here we share the following:

• What do your strata schemes need to do?
• Who can access the information and privacy?
• Why is it mandatory for your strata schemes to complete reporting?

For specific information visit NSW Government strata schemes online Annual Reporting

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.