Strata Bylaws / Rules And The New Fourth Level Of Government

© Copyright 2012 Teys Lawyers www.teyslawyers.com.au

About the presenter - Michael Teys is the Founder and Principal Lawyer of TEYS Lawyers. He has a Bachelor of Laws and practices exclusively in the area of strata title law. He is a Fellow of the Australian College of Community Association Lawyers. He was formerly an Adjunct Lecturer with Charles Sturt University. He appears weekly on SKY News Business Channel's Property Success with Margaret Lomas and is a regular panellist for the property edition of Your Money, Your Call for the same channel. You can read Michael’s blog at www.michaelteys.com and follow him on Twitter at @MichaelTeys.com

Teys Lawyers practice nationally in strata title law representing owners corporations, bodies corporate and apartment owners. The firm’s practice groups include building defects, strata community disputes, strata titles property law, by-laws and levy collection.

Subscribe for their free e-newsletter StrataSpace and find out more about them at www.teyslawyers.com.au

About the Presenter


Strata Bylaws And The New Fourth Level Of Government

“A law is something that must have a moral basis, so there is an inner compelling force for every citizen to obey.”

A TEYS Lawyers Webinar, 24 April 2012

Chaim Weizmann


The Owners Corporation Is The New Fourth Level Of Government

Federal government Housing policy and affordability

State government

Local government Building approvals and standards

Housing land release and zoning

Owners Corporation Bylaws about common property


Five Things We Will Cover In The Presentation

1. Making bylaws

2. Invalid bylaws

3. Controversial bylaws

4. Enforcing bylaws

5. Improving bylaws


The Model By-Laws May Be All You Need!

Note - the type of matters covered noise, nuisance, damage, behaviour, garbage, animals – all reasonable except the one about children playing on common property (which is discriminatory).

Part 1 -‐ Making bylaws

Short and simple

About things that matter

Tried and tested so easier to interpret

They are



Developer Imposed Bylaws Are Often Over The Top

§  Full of useless possibilities (e.g. piano falling through floors)

§  Written before built and often without consultation with designers

§  Developers try to hold on to power too long via bylaws

© Copyright 2012 Teys Lawyers www.teyslawyers.com.au Part 1 -‐ Making bylaws

Exclusive Use Bylaws Are Valuable And Require Great Care

Car parks, storage spaces, and courtyards created by exclusive use bylaws have capital value for owners:

§  Require written consent of those directly affected

§  Should provide for owner repair and maintenance

§  Can be self executing so if conditions not observed they can be cancelled without owners written consent (Cairns Aquarius case)



Additional Bylaws Should Be Kept To A Minimum

Bylaws should be kept short and simple so they are easy for owners to refer to without lawyers.

§  Avoid repeating things in the legislation

§  Stop trying to save people from themselves

§  Don’t interfere with life and liberty when it doesn’t matter

Founding Fathers of America Life, Liberty and Happiness



Revoking, Reviving And Repealing By-Laws

Orders will be made, ‘having regard to the interests of all owners of lots in a strata scheme in the use and enjoyment of their lots or the common property.’

§  Calls for reasonableness

§  Not about ‘majority rule’

§  Requires consideration of the individual


Bylaws Outside Owners Corporation Scope Are Invalid

Owners corporations are limited in scope to matters concerning common property and by laws must not step outside this power, for example: §  To levy for promotion of a strata title shopping centre §  To expend funds on letting services for lot owners §  To sponsor a local netball team

Part 2 – Invalid bylaws


Bylaws Inconsistent With LegislaFon Are Invalid

Part 2 – Invalid by-‐laws

Bylaws are the lowest forms of law so to the extent of inconsistencies with other laws they are invalid

Watch for inconsistencies with strata management laws (e.g. bylaws prohibiting letting)

Other laws trump bylaws too (e.g. age discrimination laws)

Local authority approvals and consents for use are laws (e.g. short term letting)


Assess


Case study

§  70s harbour side building

§  Original by law specify method of enclosing balconies

§  23 of 30 owners do it this way over 30 years

§  Penthouse owner renovates and wants by law for his works with frameless glass

§  Reasonable or unreasonable?

Unreasonable By-Laws Are Invalid


Imperfectly Made Bylaws Are Invalid


Watch the technical rules for making bylaws

Passed but not registered

Not registered within two years

Individual consents not given (valid after

2 years)


House Rules Are Invalid


If it’s not a registered by-law, it can’t be enforced no matter how sensible

§  No glass in the pool

§  Don’t slam the door


Children Have Rights Too!

Part 3 – Controversial bylaws

Bylaws prohibiting or restricting children playing on common property are probably discriminatory and invalid:

§  Applies even to NSW model bylaw 7 Discriminates on basis of age and family status

§  Tackle safety not special classes

“You don’t have more liability because kids are playing outside. That’s like saying kids can’t live on the second or third floor of a high-‐rise because they might fall off a balcony. It’s just a pretext to regulate the conduct of kids.”

Joe Kollin, USA Human Rights Lawyer.


Absolute ProhibiFons Of Pets Is Unreasonable


Remember, bylaws are not about majority rule; prohibition is not in the interests of all owners in the scheme:

§  Pets make people nicer

§  Half the worlds population own pets

§  Sensible rules can be made about behaviour (of humans as well as their animals)

“AXer consulFng with Geoffrey, I have been advised that there are many cats loose in Piney Lakes and we are not at all certain that the cat ‘clawing at screen doors, doing damage and creaFng a nuisance’ is my client.” – 1977 lePer from a cat’s aPorney to a community associaRon.


Parking Is Always A Problem


Additional bylaws can usefully add to OC powers to:

§  Define what a visitor parking means Regulate oversized vehicles

§  Authorise removal and impounding of owners cars but not visitors

Owners with titled car spaces or exclusive use can remove cars for trespass


Second Hand Smoke By-Laws


Smoking on lots and common property causing smoke drift can be prohibited via bylaws

§  Health evidence supports the ban

§  Inline with social norms and community standards

§  Case law authority supports total ban


Appearance By-Laws Are Touchy


Bylaws are permissible about appearances but these can be inflammatory

§  Holiday decorations

§  Flags and flagpoles

§  Reflective colours

§  Political signs

§  Politically incorrect signs


Taking The Yin And Yang Approach To Enforcement

Part 4 – Enforcing bylaws

Proactively enforce by laws requiring committee approval or consent

Reactively enforce by laws about behaviour


Written Enforcement Policies Help


Avoid bylaw disputes arising from ignorance with a simple written policy

What is our enforcement approach?

How do we handle anonymous complaints?

What steps do we take to verify complaints?

How do we try to settle disputes

internally? When we will take external action?


Being Consistent Helps


A written enforcement policy will help maintain consistency from one committee to the next

The right to legal remedies will be lost if enforcement is inconsistent

§  Do not treat owners differently from tenants

§  Committee members can’t have special treatment


Always Attempt Mediation


Mediation both informally (internal) and formally (through government offices) is always worthwhile

§  Be respectful of different opinions

§  State arguments with clarity and without emotion

§  Look for common ground

§  Narrow the issues

§  Document outcomes


Legal Remedies Are Cumbersome And Should Be Your Last Resort


There are five ways to legally enforce a bylaw

1. Take matters into your own hands (works for trespass)

2. Use remedies embedded in conditional bylaws

3. Sue for damages for breach of contract

4. Seek injunctive relief from superior courts

5. Issue statutory compliance notice and seek tribunal orders


A Legal Audit Is Useful

This will eliminate

Part 5 – Improving bylaws

Inconsistent bylaws

Unnecessary bylaws

Outside powers bylaws

Unreasonable bylaws

Out of date bylaws


Community Consultation Is Necessary

Consultation is necessary but structure this so the process does not become unwieldy:

§  Have advice at hand on invalid bylaws

§  Reassure people exclusive use bylaws and approvals will remain intact

§  Seek views on the real issues for the community



The Art And Science Of Writing Reasonable By-Laws

Follow these five questions


1. •  Is this bylaw really necessary?

2. •  Does it conform to modern social and broader community

standards?

3. •  Does the proposal provide options and alternatives for

individual behaviour?

4. •  Is it practical and enforceable?

5. •  Is it lawful?


The Biggest Battle Is Communication

Bylaw disputes are less likely if there is effective communication:

§  Websites help

§  Occasional newsletters can profile bylaws and process

§  Speak about them at annual general meetings



It’s Time To Be Reasonable

It’s time for associations to write responsible rules and review existing restrictions, to eliminate restrictions that are outdated and illogical, and to address specific problems with clear, specific solutions, to realize overzealous, unreasonable (committees) can be more damaging to property values than the violations they so rigorously try to prevent. It’s time to be reasonable. Author, Kenneth Budd, ‘Be Reasonable! How Community Associations can Enforce Rules Without Antagonizing Residents, Going to Court, or Starting World War III’



Recap

§  Make only reasonable bylaws

§  Avoid invalid bylaws

§  Temper controversial bylaws

§  Transparently enforce bylaws

§  Review bylaws responsibly


TEYS Lawyers By-Laws

Off the shelf bylaws §  Bylaw / Explanatory memo Fixed fee $330 incl GST Tailored bylaws* §  Bylaw / Explanatory memo With all necessary consents Fixed fee $550 incl GST Legal audit of existing bylaws Fixed fee $1,100 - $2,750 incl GST ** Excludes registration fees with a 48 hour turn around or it’s free

* owners works and exclusive use ** dependant on size of scheme

Strata Bylaws / Rules And The New Fourth Level Of Government

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Transcript of Strata Bylaws / Rules And The New Fourth Level Of Government