5.2.4 Restrictions on By-laws | Owners Corporation Network

5.2.4 Restrictions on By-laws

In NSW the Act specifies some restrictions on the procedural aspects of passing a By-law.

The chicken by-law: For example a by-law could be proposed and approved at a general meeting for all occupiers to flap their wings and cluck like a chicken when they are on common property. The by-law would be sent to for registration and then appear on your by-law list. The only way to remove it would be to get it voted off at another general meeting or appeal to the relevant state Tribunal if that was not successful. There are other by-laws that govern the behaviour on common property and even within the lots themselves – so why not this ‘chicken by-law’?

However, just because a scheme has a registered by-law does not mean it is enforceable. It is surprisingly common to find strata by-laws that are not enforceable (i.e. the legal term is ‘ultra virus’ which means literally, beyond the legal power or authority of a person or official or body, see 3.6.1). Registration does not vet or check by-laws for compliance with legislation. There are two ways a by-law can be beyond powers. Firstly it can conflict with another Act or right granted by state or federal legislation. Secondly, it can be beyond the powers conferred by the relevant state strata act.

Many strata schemes have one or two by-laws that are ‘ultra virus’ but often nobody realises. You would be surprised about the number of by-laws that are currently on your scheme that are probably beyond powers of an owners corporation to enforce. You can make, approve and register any by-law you want – even the chicken by-law (see box), but if you try to enforce anything beyond your powers then you are acting inappropriately and leave yourself open to litigation and damages. What are some By-laws you may have that could be beyond your powers?

A by-law in a large NSW residential and commercial scheme specified that owners were not entitled to lodge objections to development applications that were deemed to be ‘approved business’. This conflicted with the explicit right granted to object to development applications in the NSW Community Land and Development Act (1989) as was so unenforceable. Despite getting legal warnings from the proposers lawyers, owners submitted 100s of objections and the development application for a controversial business activity was refused.

 

Relevant NSW Legislation: Strata Schemes Management Act (1996)

Section 48: What steps must an owners corporation take to make an amendment effective?

  1. To be effective the change of By-Law must be registered and a notification entered on the Certificate of Title for the Common Property
  2. A change of By-Law cannot be lodged for registration more than 2 years after the passing of the resolution.

Section 49: Restrictions on by-laws:

  1.        By-law cannot prevent dealing relating to lot
  2.        By-law resulting from order cannot be changed
  3.        By-law cannot restrict children
  4.        By-law cannot prevent keeping of guide dog

Section 50: Restrictions on by-laws during initial period. An owners corporation cannot change or create a by-law, which confers a benefit or imposes obligations on some, but not all, of the owners during the initial period for the scheme.

Section 52: How does an owners corporation make, amend or repeal by-laws conferring certain rights or privileges? Where a by-law confers exclusive use of common property or allows special privileges in respect of common property the written consent of the owners benefited must be obtained in addition to the special resolution of the Owners Corporation.