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By-Laws: Playing Devil’s Advocate – NSW

Strata communities should play devil’s advocate with their by-laws to ensure they comply with the law and are enforced in such a way to reduce the risk of them being overturned in adjudication.
The governing principle for all Body Corporate and Owners Corporation by-laws can be summed up like this:

  • are they reasonable and fair?
  • are they legal?
  • can they be enforced?

The primary purpose of by-laws is to create an agreed-to set of rules that control and manage the common property and BC/OC assets, including services and facilities and the use of lots.
New South Wales and Victoria have model by-laws provided by their respective state governments. In Queensland, bodies corporate can adopt the standard by-laws that are set out in Schedule 4 of the Body Corporate and Community Management Act 1997 (QLD) or make their own.

By-laws can cover a lot of ground and be specifically tailored to suit particular community, but they cannot:

  • be inconsistent with the Act or any other legislation
  • stop or restrict a sale, lease, transfer, mortgage or other dealing with a lot
  • discriminate between types of occupiers
  • be unreasonable, when the interests of all owners and occupiers in the scheme and the use of the common property are considered
  • restrict the type of residential use of a residential lot
  • impose a monetary liability on an owner or occupier (except in an exclusive use by-law)
  • stop a person with a disability from having a guide, hearing or assistance dog on the scheme.

All communities must register their by-laws with the relevant state legislative body, but that doesn’t mean a recorded by-law is deemed valid or even enforceable. By-laws may be challenged and if an adjudicator deems them to be invalid, the Body Corporate/Owners Corporation will be required to change them and register a new community management statement.

If your community chooses to create specific bylaws to suit your specific circumstance, it is important to:

  • be clear about the outcome you want to achieve, not only for the present but also for the future benefit of all residents, and
  • determine how the by-law is to be legally enforced and whether it risks being ruled invalid.

This is an essential step because it is the responsibility of the Body Corporate/Owners Corporation to enforce their bylaws.

New South Wales Office of Fair Trading has some great commonsense tips for dealing with disputes.

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