3 things you may not have known about strata property by-laws

Three things you may not have known about strata property by-laws and building rules

Property by-laws and building rules are the most basic element of community living, so it’s essential to gain a deep understanding of them.

Community living across Australia is changing. Each state is either in the throes of large-scale public consultation or passing legislation to enhance the industry.

According to our NSW Kemps Petersons Legal (KPL) principal solicitor, Kavita Prasad, while the regulatory changes are good, one key step is being overlooked — all owners and residents need to understand their by-laws and building rules and get them right.

“Often, owners buy into a strata property but never read their by-laws nor have them explained. This means you have a large number of owners who don’t understand their rights and obligations and what they can and can’t do regarding common property and sharing a vicinity. This is when you get disputes, legal battles, and you see a breakdown in harmonious community living” said Kavita.

For Kavita and the KPL team, there is a growing need for strata managers to stress the importance of property by-laws. “It’s not just about making sure that owners understand their by-laws. Managers must also make owners and committees aware of the significance and impact of having well-worded, legislatively accurate, enforceable by-laws and rules.

Disputes come in when owners feel that a by-law is too restrictive and impacts their rights or the enjoyment of their space. This is when we see a situation go to the respective state tribunals, often because the by-law is poorly worded or isn’t enforceable. A way to prevent this is by having affordable specialists draft, consolidate, and register by-laws and building rules.

“For example, we had a case where a committee in NSW wanted to ban all dryers within the shared laundry facilities. We were able to provide them with advice that said this kind of by-law borders on being restrictive and could go to the tribunal and be contested as a legal matter. We suggested instead putting by-laws in place that allow dryers but mitigate risk. We drafted by-laws around managing fire risks, such as adequate ventilation, fire hazard signs, extinguishers, and so on.

Having a legal professional draft, consolidate, and register a by-law isn’t about one party power-trumping the other. It’s about giving property-specific advice that accounts for the needs of the property and those living within it,” said Kavita.

1. Having strata property by-laws put in place successfully involves a three-step process

Kavita pointed out that owners and committees should know about the critical three-step process to having accurate property by-laws and building rules.

1. Professional drafting
   Having by-laws and building rules drafted by a professional means owners and the committee can be assured that they are accurate, enforceable and may reduce the risk of being susceptible to disputes. “At KPL, we also focus on making sure the by-laws we draft aren’t laden with legal jargon. This means everyday people can understand them, and it doesn’t leave people trying to interpret complex language,” said Kavita.

2. Accurately consolidating property by-laws and building rules
   Any changes, repeals, or amendments to the property’s by-laws or rules must be consolidated following an appropriate layout and style. This task is typically best handled by the legal professional who originally drafted the by-laws. This includes:
   • Deleting all previously repealed by-laws and building rules.
   • Including any newly or previously added by-laws and building rules.
   • Including any previously amended by-laws and building rules.
   • Retaining the numbering assigned to each by-law and building rules when it was created.
   • Setting out the by-laws and building rules in a clear and logical manner.

3. Registering to meet legislative requirements
   To comply with legislative requirements, it is essential to register by-laws and building rules with the relevant state body within a specific timeframe. By engaging professionals to handle this process helps with timely compliance with deadlines, reduces administrative burdens, and prevents disruptions to property operations.

2. Short-term letting can be managed through by-laws and building rules

Kavita highlighted that certain legislative changes across Australia are putting property by-laws and building rules front and centre. “The movement, from a regulatory perspective, to deal with Airbnb and Stayz is starting, and this heavily involves by-laws and building rules.

“For example, as of April 2020, strata properties in NSW may now be able to stop short-term letting where it is not the owner’s principal place of residence by adopting a by-law via a special resolution.

“While NSW is the first state to make such a big change, we’re starting to see rumblings in other states too. Victoria, in February 2019, introduced new regulations to prevent short-term letting where unruly parties were involved. While Queensland saw a landmark legal decision in November 2019 where courts ruled to uphold a body corporate’s ban on Airbnb. The Queensland case, at this stage, doesn’t mean much for most bodies corporates, but it highlights the significance of by-laws,” said Kavita.

3. Strata property owners should be wary of by-laws templates and quasi-legal advice

With property by-laws and building rules playing such an essential role in achieving successful community living, Kavita and KPL warn about half-baked help.

“Be wary of templates. It is now common to see managers collate resources made available to them over their careers and provide property by-law templates for a fee. We are trying to get strata managers and owners to understand the risks of using generic templates when it comes to by-laws and building rules.”

By-laws and building rules are not one size fits all. Each community, committee, and group of owners are different and have their own needs and specifications. That’s why, even if by-law templates sound similar, the differences in wording can have significant impacts.

If you encounter a dispute regarding a by-law or building rule that escalates, it is essential to seek advice from a fully qualified legal practitioner. “While sharing legal information is acceptable, giving quasi-legal advice if you are not a fully qualified to do so may be seen as unqualified legal practice can lead to serious consequences, including potential jail time and fines of up to $27,500.” Kavita explained.

If you’d like to find out more on drafting by-laws or building rules for your strata property,  click here to download our FREE Community Living guide on by-laws and rules.  For a consultation to review your current by-laws with the Kemp Peterson team, click here (NSW only). Alternatively, click here for a free assessment to find out more about the services we offer.