Many lot owners, particular those in older strata schemes, do not know what by-laws apply to their scheme. While the Secretary of the Owners Corporation is required to keep a record of all the by-laws in force in the scheme this record may not always be accurate.
Why? There was a change to the law on 1 July 1997 affecting strata schemes registered before this date. Also over time there is often ad hoc additions, amendments and repeals of by-laws by the Owners Corporation. If rigorous records are not kept, confusion ensues.
This is particularly so where there are several by-laws in respect of the same subject area, for instance where there are by-laws in respect of either works and/or exclusive use areas. It is relatively common for the beneficiary of an exclusive use by-law to want to add additional space or conduct additional works (requiring a second by-law). If not properly drafted these by-laws can cause uncertainty.
For strata schemes registered after 1 July 1997, the applicable by-laws are:
- the by-laws registered with the strata plan (including any amendments or repeals after their registration); and
- any additional by-laws registered after the strata scheme.
For strata schemes registered before 1 July 1997:
- the model by-laws 1 – 29 in the Strata Schemes (Freehold Development) Act 1973 (NSW) (the 1973 by-laws) no longer apply;
- the model by-laws listed in schedule 1 of the Strata Schemes Management Act 1996 (NSW) now apply (the 1997 by-laws); and
- any additions to the 1997 by-laws made after 1 July 1997; and
- any by-laws that were added to the 1973 by-laws; and
- any amendments, additions to, or repeals of the schemes by-laws made before or after 1 July 1997.
Note that any amendments, repeals or additions to the original by-laws must be registered to be valid but that registration does not make an invalid by-law valid.
Fair Trading has indicated that as part of the strata reform process that existing schemes will be required to consolidate their by-laws. The proposed reforms are expected to be released early in 2015. This provides existing schemes with an ideal opportunity to be proactive and plan ahead by starting the process of reviewing their existing by-laws now. By obtaining advice on their by-laws (including advice on validity) now existing plans will be in a better position to consolidate their by-laws in an organised and considered manner.
Kerin Benson Lawyers
Author: Allison Benson
Date: 8 August 2014