By-Law enforcement in Strata Schemes
All strata schemes have a set of By-Laws (rules) that owners, occupiers and, in some cases, even visitors must follow. By-laws cover issues such as whether or not pets are permitted on the scheme, how smoking is regulated, parking, noise, and the conduct of residents and visitors. Compliance with these By-laws helps ensure that residents are able to live harmoniously in their shared community living.
Enforcement of these By-laws is not overly complex however there is a clear process defined in the Strata Schemes Management Act 2015 that must be followed.
Below is an overview of the process and Strata Life can guide you step by step as well as prepare the letters, agendas, etc as required. An Owner’s Corporation must be careful that all steps are followed as failing to do this can result in the matter been dismissed by the member at NSW Civil and Administrative Tribunal (NCAT). This could mean that the whole process must start again which not only delay enforcement but also a waste of time and money.
Step 1: Discuss the issue
When the breach is reported to the Managing Agent or the Strata Committee, we usually suggest that the first attempt to resolve the matter is done in person by a member of the Strata Committee or the person who is raising the complaint. They can explain the By-law to the resident/owner and how they are currently breaching it. Once the offender is aware of how their action is impacting other residents, often this is sufficient for them to cease and if done in a friendly manner it will not impact community living and may even enhance it by opening up communication.
Step 2: Issue breach letters
Should face to face communication not be possible, inappropriate or if it is unsuccessful then the Strata Committee should request that the Managing Agent issue a letter to the resident. In case the matter does eventually progress to a mediation or a hearing it is required that the letter is addressed to the correct person (owner or tenant) by name and that it includes the action that is causing the breach, the By-law/s that this action breaches and also what action they must take to avoid further breaches.
We suggest that 2 to 3 letters are issued before the matter proceeds further as that shows that the Owner’s Corporation have taken reasonable steps in notifying the offender of their actions and providing time for them to correct the behaviour or action. However, more than one letter is not necessarily required for the matter to progress to mediation or to NCAT. In the case of a tenanted unit, the property manager and/or the owner should be provided copies of the letters. They are often able to also place further pressure on the tenants to comply with the By-law particularity if the behaviour or action also breaches their tenancy agreement.
Disclaimer: The content of this Factsheet is intended as a guide only and cannot be relied upon for legal advice. Readers should make and rely on their own inquiries regarding all aspects of the material. Strata Life disclaims any liability for negligence or otherwise in any way connected with this Factsheet.
Step 3 Strata Committee Meeting:
If the resident/owner continues to breach the By-law, the Owner’s Corporation can serve them with a Notice to Comply. For a Notice to Comply to be issued there must be a formal motion passed. Most Owners’ Corporations can delegate this responsibility to the Strata Committee.
A formal Strata Committee meeting, however, must be held which requires an agenda and minutes issued under the requirements of the Strata Schemes Management Act 2015. The motion passed must also be correctly worded.
Step 4: Notice to Comply
Once the Strata Committee has passed the motion a Notice to Comply can be issued. This must be in the format issued by NSW Fair Trading and witnessed by a Justice of the Peace or a Solicitor. The Notice is usually served by Post. The Notice to Comply is valid for 12 months. A separate Notice is required for each By-law that it is in breach.
Step 5: Mediation
If the resident breaches the By-law listed on a Notice to Comply within the 12 month period the Owner’s Corporation can make an application to NSW Fair Trading for mediation.
Mediators are impartial and help parties reach a mutually beneficial agreement by taking part in an informal dispute resolution process. Mediation is free and resolves over 65% of all Strata disputes.
Mediation is not compulsory when it is an Owner’s Corporation taking action on an owner or resident; however, it is required when it is an owner/resident taking action against an Owner’s Corporation.
Mediation is held at the Parramatta office of NSW Fair Trading and requires attendance by at least 1 Strata Committee member (who we suggest be formally appointed at a Committee Meeting).
Step 6: Application to the Tribunal
If mediation is unsuccessful, is declined or not the preferred process of an Owner’s Corporation, the Owner’s Corporation can apply to NSW Civil and Administrative Tribunal (NCAT) for an order. Before the application can be completed, another Strata Committee meeting must be held to formally agree to such action. The resolution should also assign at least one Strata Committee member with the authority to act on behalf of the Owner’s Corporation at the hearing. While the application fee is minimal to apply for an order, the attendance by one or more Strata Committee is required at the Sydney CBD office of NCAT.
The tribunal has the authority to place an order on the resident in relation to the breach and can issue a fine of up to $1,100 per breach for the first offence. If the order is breached again the fine can double to $2,200. Owner’s Corporation should be aware however that it is not uncommon for the Tribunal to issue no fine or a reduced amount. While the fine is payable to the Owner’s Corporation it is also up to Owner’s Corporation to chase the debt if payment is not forthcoming.