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New strata by-laws – what you need to know

16 March 2017

By Colin Grace – Partner – Business Development and Client Management Director at Grace Lawyers

We all know by-laws can be overwhelming when they are not nurtured and grow into an ever-expanding mess of documents. However, the new strata legislation aims to prune this. 

The problem with any fledgling statute is that understanding it can be problematic. Worse yet is that information is so readily available that everyone has an opinion on what to do with your by-laws, making it difficult to interpret.

This is why we recommend strata agents focus on the three questions that cover the main concerns.

  1. Are our by-laws still relevant?
  2. Why do we need to review our by-laws and how do we do that?
  3. How and why should we consolidate our by-laws?

1. Are our by-laws still relevant?

The provisions of the Strata Schemes Management Act 2015 do not invalidate your current by-laws which are still binding and relevant. So put down your hammers and take the pooch back to the pound!

There is some confusion on model by-laws and whether they have changed. If your scheme is from pre-1996 your model by-laws are now contained in Schedule 2 of the Strata Scheme Management (Regulations) 2016 (the Regulations).

If your scheme is registered between 1996 and 2015 your by-laws will be the same as those registered at the time the scheme was registered.  So you need to check your certificate of title for the common property and all will be revealed.

If the owners corporation registered any new by-laws or amended any old by-laws then these are also still valid. The ‘modernised’ model by-laws are contained within Schedule 3 of the Regulations and are only applicable if your scheme decides to adopt and register them.

2. Why do we need to review our by-laws and how do we do that?

The Act requires you to review the by-laws relevant to your scheme by 30 November 2017 (see clause 4 (a), Schedule 3 of the Act).

This means that the owners corporation must consider the by-law review at a meeting at some point this year. In order to do this, you must also go through your existing by-laws to see if the owners corporation is satisfied with them. 

If they are, then a motion should be passed saying that the owners have reviewed their by-laws for the purpose of clause 4, schedule 3 and are satisfied that the current applicable by-laws meet their requirements. 

However, this is the perfect opportunity for the owners corporation to consider whether the by-laws are relevant, applicable, necessary, inconsistent, easy to navigate and understand.

If not, the owners corporation may wish to fix them and register a neat, tidy, consolidated set of by-laws that will assist them going forward. 

This will not guarantee the by-laws are legally sound and correct, or will be legally binding if queried before a court or tribunal.

But it is a start and only requires a moderate dose of common sense to realise whether you may need further legal assistance or not.

3. How and why should we consolidate our by-laws?

Those living in schemes that have existed for a long time will be familiar with the frustration of navigating a library of by-laws.

There are documents everywhere, annexures lost and found, and repealed by-laws that are still in the mix. The new Act aims to streamline this and section 141 now requires that the by-laws are kept in a consolidated set. 

So what does this mean for your scheme? The short of it is that you MUST consolidate your by-laws into a consolidated set which the secretary must keep with the schemes books and records. 

The long of it is that when you next amend, repeal or register a by-law you will be required to lodge the consolidated set with the new changes with the LPI. 

So next time you march down to the Land and Property Information (LPI) to lodge a new by-law for your sleek new bathroom, you will find you are unable to submit anything unless you provide a complete and consolidated set of all the by-laws relevant to your scheme.

The good news is that LPI have issued some guidelines to assist you with your consolidation. The bad news is that LPI are still working out the bugs and are yet to decide how they would like your consolidated by-laws to finally look.

The best way around this is to print out the guidelines which are available on the LPI website, follow them, and take them with you to the LPI. This way you can refer back to them if the LPI are unsure your consolidated by-laws have been completed correctly.

There are various articles about reviewing and consolidating your by-laws which sometimes end up being confusing and not assisting.  

All you need to do is review all your by-laws, consider which have not been made invalid by the Act and resolve to continue with them before 30 November 2017.

Then the strata manager or another volunteer needs to consolidate them into one set so they are ready to go when the owner of a lot decides to register that by-law for their new bathroom.

If they need updating or you are concerned about their validity and the impact of the new Act then you can consider seeking assistance from professionals.