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.

Owners corporations are increasingly encountering aggressive behaviour by some telecommunications providers who say they are acting under powers granted to them pursuant to the Telecommunications Act.

Preserving the owners corporation’s rights and negotiating position can come down to whether the owners corporation responds in a timely fashion, and in accordance with the relevant legislation.

Failure to do these things may mean the owners corporation is stuck with a proposal to install infrastructure and technology which the owners do not want.

It is important that you understand the steps which your owners corporation needs to take in dealing with such telecommunications providers.

The Rise of “Low Impact” Telecommunications Infrastructure

Once upon a time, the only occasion on which an owners corporation would hear from a telecommunications provider was if that telecommunications provider wished to install a mobile telephone tower on top of the building comprising the strata scheme.

In most instances this would lead to negotiations between the owners corporation and the relevant telecommunications provider as to the nature of the leasing arrangement which would be put in place to enable that mobile telephone tower to be erected and maintained and almost always the owners corporation would receive rental income as a result of allowing such installation to take place.

Under the Telecommunications Code of Practice 2021, telecommunications providers can give notices to an owners corporation in relation to their intention to use owners corporation’s property for various purposes.  Typically, these notices include:

• The Inspection Notice – this notice provides the owners corporation with notice of the telecommunications provider’s intention to enter the strata scheme carry out an inspection of the building or buildings comprising the strata scheme to enable the telecommunications provider to consider whether it wishes to proceed with any further proposals; and/or
• The Installation Notice – typically, a notice of this kind provides the owners corporation with written notice of the telecommunication provider’s intention to install certain “low impact” telecommunications infrastructure and systems – the notion of what is “low impact” is defined by the relevant legislation.

The Importance of Responding

The relevant legislation requires that an owners corporation receiving a notice from a telecommunications provider under the relevant legislation must respond:

• in writing;
• within a certain limited timeframe; and
• in a specified manner,

otherwise the telecommunications provider may automatically have rights to do certain things pursuant to the relevant legislation.  For example, if the owners corporation fails to properly respond and/or fails to respond within the timeframes governed by the legislation, then the owners corporation may find itself without any basis to argue against a telecommunications provider installing certain equipment and infrastructure on the building, including certain forms of antennas, cabling etc.

“Pushing Back” Against Telecommunications Providers

Over the last 12 months we have seen a rise in the instances of such proposals, and specifically, of inspection notices or installation notices being given to owners corporations.

Normally the manner in which an owners corporation can respond is extremely limited, as is the time in which an owners corporation can respond.

Interestingly, when we have been engaged to object to those notices (in accordance with the relevant parts of the telecommunications legislation) then the telecommunications providers have, almost in every instance, withdrawn their notices and decided not to further engage with that particular owners corporation.

Therefore , even if the situation appears to have been “lost”, where  the owners corporation has failed to take any steps to deal with an inspection notice or installation notice, it is still worth engaging legal advisors to formally object to those notices, as it appears that telecommunications providers may not be willing to take on a “hostile” owners corporation, properly engaged.

Timing is Everything!

Should your owners corporation receive a notice from a telecommunications provider, then it is critical that you seek advice promptly, as some of the timeframes in which the owners corporation is entitled to respond are only 10 days in length.

Under the relevant legislation, any objection must deal with certain specified matters.

Need assistance with a proposal from a telecommunications service provider, we are experienced in the processes under the telecommunications legislation including drafting ‘Notices of Objection’ in compliance with that legislation. CLICK HERE!

Warwick van Ede I BEc LLM I Lawyer

Since 1990, Warwick has specialised in strata law, property law and litigation. Recognised for his expertise, he is also a NSW Law Society Accredited Specialist in Property Law. In 2021 he was selected to serve on the Property Law Committee of the Law Society of NSW. Profile I LinkedIn

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.

Adding Further Building Defects to an Existing Claim

On 17 April 2023, the New South Wales Court of Appeal in the case of Parkview Constructions Pty Ltd v The Owners – Strata Plan No. 90018 (Parkview), confirmed that an owners corporation can add new defects to an existing claim if the statutory warranty period in the Home Building Act 1989 (HBA) has not expired.

Supreme Court Amends Building Defects Statement of Claim

In the Parkview case, in the Supreme Court, the owners corporation sought to amend its Statement of Claim to add new defects. The Supreme Court granted permission to the owners corporation to add new defects to its existing claim.  The new defects that were added were not manifest when the owners corporation-initiated proceedings in the Supreme Court. Parkview appealed against the decision of the Supreme Court to the Court of Appeal.

Court of Appeal Win for Owners Corporation

The Court of Appeal upheld the decision of the Supreme Court by confirming that the owners corporation was entitled to add new defects to its existing claim and the addition was not a new cause of action but part of a single cause of action being a breach by the builder of the statutory warranties under the HBA.

Parkview argued that the addition of new defects introduced a “new” cause of action, and those new causes of action were not the same as the existing cause of action that was on foot. The Court of Appeal rejected that argument. It held that in a conventional case for breach of contract, there is a single cause of action.  That cause of action is complete when a defective structure is provided irrespective of the number of ways in which those defects have manifested themselves.  The Court of Appeal said that even though the HBA has created inroads into common law principles, however, those changes brought by the HBA do not alter the nature of the owners corporation’s claim.

Furthermore, the Court of Appeal said that a successor in title like an owners corporation sues a builder or a developer for statutory warranties under the HBA. The proceeding is based upon a breach of a single contract.  An amendment does nothing more than introduce further departures from the building contract that the builder and the developer had promised and that does not give rise to a new cause of action because the cause of action remains one, that is for a breach of the same contract.  Accordingly, the Court of Appeal held that the owners corporation’s amendments seeking to add new defects did not introduce a new cause of action and so the owners corporation was entitled to add them to its existing claim.

A Victory for Owners Corporations in NSW

This confirmation from the Court of Appeal is a great victory for owners corporations in NSW and it reconfirms the willingness of the judiciary to protect owners in strata schemes wherever it may be necessary.

Faiyaaz Shafiq I LLB GDLP I Lawyer

A highly experienced and respected, results driven Litigation Lawyer specialising in the areas of strata litigation, building & construction, commercial litigation, debt recovery, personal and company insolvency. 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.

Under a plan by the City of Sydney  all new apartment blocks will need to provide EV chargers and existing apartment blocks will need to retrofit EV chargers as the Council pushes to drive the uptake of EV’s and drive net zero emissions by 2035.

Retro Fitting EV Chargers

Many older apartment blocks are struggling with the concept of installing EV chargers, a major hurdle for the following reasons:

• The significant costs
• Navigating the current building infrastructure
• Questions about who pays for the new infrastructure?
• Uncertainty over who pays for the electricity used?
• Questions about how the EV owner is charged for electricity used and whether a by-law can introduce a user pays system for electricity costs
• Lack of information about EV charger installation
• Convincing lot owners who don’t own an EV (and may never) to contribute to the cost of installing EV charging infrastructure

The NSW Government’s promise in the upcoming elections to install 30,000 public charging stations across NSW is a positive move in the right direction.

However, in Europe more than 80% and in North America 70% of EV vehicles are charged in homes overnight.

So, perhaps the Government needs to further develop ways to assist with the uptake of retrofitting EV chargers in existing apartment blocks to ensure the City of Sydney (and other areas) reach their target of zero emissions by 2035.

In that regard, the NSW Treasurer recently announced that if the NSW Government is re-elected at the upcoming election, changes will be made to strata laws in NSW to make it easier to install EV Chargers in apartment buildings. The jury is still out on that announcement but it would be a step in the right direction.

For more information refer to these media articles:

• This is evolving quickly City of Sydney accelerates switch to electric vehicles.pdf
• Sydney council pledges to plug in to electric car trend
• 30,000 EV chargers across NSW by 2026

Do You Need an Electric Vehicle (EV) By-law?

Our specialist team of strata lawyers has drafted many by-laws permitting owners to install electric vehicle chargers in strata buildings. Our EV by-law considers and covers all essentials including these key issues:

• Who’s responsible for paying the cost of electricity used to charge electric vehicles
• Any necessary upgrades to the electricity infrastructure in the building
• Overloading the existing electrical infrastructure

DO YOU NEED ASSISTANCE WITH AN ELECTRIC VEHICLE BY-LAW?