If you’re a strata committee member or strata manager, no doubt at some point a lot owner or occupier will breach a by-law and the suggestion will be made that a notice to comply with the by-law (sometimes called a “breach notice”) be issued to the person who has breached. Of course, in some cases, a friendly reminder is all that will be needed. But if events escalate or the breach is on-going or severe, then a notice to comply is the first step. Furthermore, if you as a committee, owners corporation or strata manger intend for the notice to comply to be the first step to proceedings in NCAT for penalty orders (that is, orders that the lot owner breaching the by-law pays a penalty amount to the owners corporation), then you must get the steps right.
The Strata Schemes Management Act 2015 sets out the steps in section 146. It requires that a notice to comply must be in a form approved by the Secretary (which is, for this purpose, Fair Trading. You can download a notice to comply form from their website). The notice must refer to one by-law only and it must state that the owners corporation is satisfied that the owner or occupier has breached a by-law. The notice must extract the by-law breached. For this purpose, the entire by-law should be extracted, not just the part that was breached. The notice must not be issued unless unless the strata committee has resolved to issue the notice at a strata committee meeting, or the owners corporation has resolved to issue the notice at a general meeting, or the strata manager has been delegated the power to issue notices to comply by their strata management agreement. Once all of those steps have been taken, the notice should be served on the owner or occupier (to their address for service on the strata roll is the best way or personal service is the second best). If the person breaches the same by-law again within twelve months of the notice, so long as the owners corporation has proof of the breach, then the owners corporation can make an application to NCAT for penalty orders due to the breach. Penalty orders can be up to $1,100.00. If the person further breaches the by-law in the next twelve months after NCAT orders, then the owners corporation can apply for further penalty orders of up to $2,200.00 without notice or warning to the lot owner.
If you have any issues with breaches of by-laws in your scheme, contact Kerin Benson Lawyers.
Authors: Gemma Lumley and Allison Benson