Introduction

Living within a strata scheme in New South Wales involves adhering to a specific set of rules known as by-laws. These by-laws govern the conduct of residents, the management of the scheme, and the use of common property, aiming to ensure harmonious community living for all owners and occupiers.

However, breaches of these by-laws can occur, leading to disputes and potentially requiring formal intervention. Understanding the nature of strata by-laws, the legal framework governing them under the Strata Schemes Management Act 2015 (NSW), and the processes for addressing breaches is essential for maintaining order and resolving conflicts within a strata community.

What are strata by-laws? 

By-laws are rules governing the general administration and management of an organisation, community, or institution. They define the methods, norms, and principles that members or participants must adhere to function in proper order.

Strata by-laws regulate the administration, operation, and usage of common property in a multi-unit housing complex. These by-laws in your strata scheme are created by the homeowners association or strata company of the property and apply to all residents and property owners within the community. Strata by-laws address a range of issues related to harmonious living in strata properties, including – 

1. Quiet hours, noise levels, and restrictions on activities that could disturb other residents.
2. Pet ownership, including the types and sizes of pets allowed, leash regulations, designated pet areas, and waste disposal requirements.
3. Ability to rent out units, this can include limitations on the number of rental units, minimum lease terms, and tenant screening processes.
4. Usage of shared facilities such as gyms, pools, parking lots, and recreational areas.
5. The type and scale of home businesses.
6. Use of common property like parking allocation, guest parking, and rules for visitor parking. 

What are the legislations governing strata by-laws? 

Property owners possess the authority to establish and enact by-laws that align with the envisioned strata plan lifestyle. These by-laws, in conjunction with the Strata Schemes Management Act 2015 (NSW) and the Strata Schemes Management Regulation 2016 (NSW), outline the regulations governing a strata scheme.

 The Strata Schemes Management Act 2015 (NSW)

The Strata Schemes Management Act 2015 (NSW) focuses on providing strata management of strata schemes, handling disputes over strata schemes and by-law enforcement. Additionally, it offers 18 model by-laws that the owners can modify while ensuring that the fundamental aspects are already included. It further provides detailed financial reporting requirements and functions that the strata committee is required to do. 

The Strata Schemes Development Act 2015 (NSW)

The Strata Schemes Development Act 2015 (NSW) governs:

1. how common property and lots in strata schemes are dealt with,
2. the sub-division of lands into spaces to create leasehold and freehold strata schemes, and
3. lastly, the variation, renewal, and termination of strata schemes.

Contrary to the Strata Schemes Management Act 2015 (NSW), this act focuses on the building and planning of strata properties, while the management of the owners corporation or strata manager, strata residents and lot owners is handled in Strata Schemes Management Act 2015 (NSW).

What restrictions apply to strata scheme by-laws? 

Section 139(1) of the Strata Schemes Management Act 2015 (NSW) limits by-laws to ensure they are not unfair, overly severe, morally unacceptable or oppressive. These criteria serve as the benchmark for assessing the lawfulness of any by-law within a strata scheme.

They are defined as:

• Unfair
• Overly severe
• Morally unacceptable
• Oppressive

The New South Wales Civil and Administrative Tribunal (NCAT) determines whether a by-law breaches these limitations. If a by-law fails to meet the prescribed criteria, NCAT has the authority to nullify it.

We have sought to highlight examples of by-laws deemed to be unfair, overly severe, morally unacceptable or oppressive with reference to two recent cases:

Cooper v The Owners – Strata Plan No 580068 [2020] NSWCA 250

The famous “Cooper Case” involves a breach of the by-law under the scheme “The Horizon” in Darlinghurst, Sydney. Although the by-law prohibited animals on the premises, several residents kept pets, which triggered legal proceedings.

In October 2020, the New South Wales Court of Appeal declared the by-law invalid. The Court emphasised that a valid by-law must be:

• Rational
• Non-oppressive
• Directed towards preventing disturbances to other owners’ enjoyment

This decision set a binding precedent for similar disputes across NSW.

Franklin v The Owners – Strata Plan No. 87497 [2022] NSWCATCD 210

In Franklin v The Owners, the applicant contested the validity of a by-law on two main grounds:

• Cooking prohibition: The by-law barred all cooking methods except using an electric kettle within individual lots.
• Financial liability: It held lot owners responsible for fire-brigade attendance costs whenever alarms were triggered.

Ultimately, NCAT found that the blanket ban on cooking was overly unfair and oppressive, and declared the by-law invalid.

What happens if by-laws are breached?

Notice to Comply with a strata by-law

When a by-law is breached under the Strata Schemes Management Act 2015 (NSW), the strata committee may convene to vote on issuing a Notice to Comply. This notice—delivered by post or email—alerts the party suspected of breaching the by-law to rectify their conduct.

Specifically, the notice can be served as follows:

• Owner-occupiers: delivered directly to the owner
• Tenants: sent to both the landlord and the property manager

By ensuring the appropriate party receives the notice, the committee facilitates timely compliance and clear communication.

Financial penalties for breaching a by-law

If non-compliance continues, the owners corporation can apply to NCAT for a civil monetary penalty, which depends on the breach’s type and frequency. Key requirements include:

• Lodging the application within 12 months of issuing the Notice to Comply.
• Seeking a penalty between 10 and 100 penalty units.

NCAT may impose:

• Repeat-offender fine: up to 20 penalty units (maximum $2,200) if the same by-law is breached again within 12 months of the initial penalty
• Initial fine: up to 10 penalty units (maximum $1,100)

What steps can you take if by-laws are breached?

Communication

When someone breaches a by-law within your strata property, begin with a cordial and transparent conversation. Effective communication often proves beneficial in resolving issues.

Consider discussing specific concerns, such as:

• Disregarding parking regulations
• Causing disturbances
• Neglecting pets
• Accommodating disruptive guests

In each case, clearly explain how their behaviour impacts you and your fellow owners.

Ask for assistance from the strata manager or committee

If direct communication fails, ask the strata committee or strata manager for help.

An impartial strata committee member can:

• Educate the violator on communal living principles and the repercussions of ignoring by-laws or regulations
• Act as a mediator
• Offer effective solutions and conflict-resolution strategies

Collect evidence for breaches of by-laws

Maintain a detailed record of each violation. Your log should include:

• Individuals involved: names or descriptions of the parties.
• Nature of the breach: which by-law was violated.
• Circumstances: how and where the breach occurred.
• Timing: date and exact time of the incident.
• Duration: how long the breach continued.

To strengthen your case, gather supporting evidence such as documents, photographs, or videos. This documented evidence can be pivotal in guiding any subsequent steps.

Issue a notice to comply 

Despite all your efforts, if the individual continues to breach the same by-law, the owner corporation can furnish a formal notice to comply within a reasonable time, along with a copy of by-laws in question. If various by-laws have been breached, then another notice to comply should be given for each by-law. 

Dispute resolution

If the formal Notice to Comply fails to elicit a response, the owners corporation may seek mediation through NSW Fair Trading.

This process entails:

• Convening both the occupier and the property manager before an impartial mediator.
• Appointing a mediator through NSW Fair Trading to facilitate the session.
• Identifying the specific by-law breach as the focus of mediation.
• Guiding each party to express their concerns constructively.
• Exploring potential resolutions to address the breach.

Before applying for mediation, the strata committee must hold a meeting to:

• Pass a resolution confirming the by-law breach.
• Authorise the application for mediation with NSW Fair Trading.

This structured approach ensures disputes are resolved fairly and with professional support.

File an application to NCAT

If mediation fails to yield a resolution, the owners corporation can make an application to NCAT.

A proactive and structured approach to address ongoing by-law breaches involves:

• Communication
• Involvement of strata professionals
• Documentation
• Formal notices
• Emergency protocols
• Legal recourse

By navigating this process diligently, strata communities can uphold their by-laws and foster a harmonious living environment.

Update your by-laws (if required)

In the case where the by-law that was allegedly breached is found by NCAT to be:

1. Harsh, oppressive, or unconscionable
2. Not addressing the issues arising properly
3. An old by-law that is not relevant for today’s time
4. Not in the best interest of owners and residents

then the strata committee must update the by-law. This is achieved through a special resolution followed by a registration of change within 6 months of the passing of the resolution as per section 141 of the Strata Schemes Management Act 2015 (NSW).

Conclusion: How can our strata legal services help?

Strata by-laws are essential for governing conduct and common property use within NSW strata communities. Understanding these rules, the consequences of breaches, and the enforcement process through Notices to Comply, mediation, or NCAT is vital for harmonious living and ensuring by-laws are legally valid and fair.

Navigating by-law disputes, drafting effective rules, or challenging unfair ones can be complex. If you require assistance with interpreting, enforcing, or amending strata by-laws, or if you are facing issues related to breaches, consulting with experienced NSW strata title lawyers is highly recommended. Contact PBL Law Group today for expert legal guidance and tailored solutions for your strata scheme.