Unfair Body Corporate By-Laws – What to do?

Sometimes it’s just plain not fair… you have bought a lot within a community titles scheme or as a current owner your circumstances change and suddenly you are told you cannot do something – it’s against the body corporate by-laws!


Monetary liability – what a by-law cannot do

A by-law must not impose a monetary liability on a lot owner or occupier.[1] While there may be other means by which a body corporate may recover costs which it has reasonably incurred,[2] it may not do so by means of a by-law and any such by-law is invalid to the extent that it purports to do so.

Renovation bonds – how much is too much

A recent matter[3] considered by the Commissioner’s office concerned the compulsory payment of a bond by a lot owner in circumstances where they intended to undertake renovation works to their own lot. The bond was to reimburse the Body Corporate for any costs incurred as a result of any damage caused to common property.

The existing by-laws provided for a bond of $2000.00, however the Committee considered that this was inadequate and a resolution was passed at general meeting for an uncapped bond of “$2000 or 10% of the total cost, whichever was greater“. In this situation a lot owner carrying out quality renovations to a penthouse was looking at a bond of $30,000.00. In our view – an unreasonable monetary liability.

The lot owner was successful in having both the proposed by-law and the original by-law declared invalid and of no effect. No bond at all was needed. As a result he could commence his works without tying up further funds for months unnecessarily.

Change the by-laws – it’s not too late

The scheme by-laws are established at the commencement of the scheme and may be added to or amended by the passing of a special resolution at a general meeting of the body corporate.

Although required to do so within three months, sometimes the body corporate having passed the resolution, hasn’t actually yet lodged the request to register the new Community Management Statement (CMS) containing the new by-law, but nonetheless invalidly relies upon it. A by-law doesn’t come into force until the day the registrar records the CMS or a later date stated in the by-law.

An application to the Commissioner’s Office seeking to declare void a resolution of the body corporate must be made within three months of the meeting at which the resolution was passed.[4]  However, it’s not too late…an Adjudicator may, for good reason, waive the non-compliance. All it requires is a dispute resolution application to the Commissioner’s office testing the validity of the resolution or the by-law.

For a by-law to continue to operate may be un-just as it is inconsistent with the BCCM Act no matter how much time has lapsed since the resolution. It must not be presumed that a CMS is valid or enforceable merely because the registrar records it.[5]

Another way to seek change is to circulate a proposed motion and obtain the supporting signatures of just 25% of lot owners in a requested extraordinary general meeting.[6]

What you need to do

As lawyers experienced in body corporate law, Redchip are able to provide comprehensive advice in relation to strata and body corporate by-laws. By-laws relating to pets, vehicle towing, and cost recovery for levy collections are just some examples of body corporate matters that we advise upon.

For more information contact Helena Mrmos at helenam@redchip.com.au or phone +617 3223 6100.

 


[1] Body Corporate and Community Management Act 1997 (the “BCCM Act”), s180(6).

[2] See Pacific Breeze Apartments [2009] QBCCMCmr 317 (26 August 2009) (0152-2009).

[3] River Place Apartments [2009] QBCCMCmr 411 (21 October 2009).

[4] BCCM Act, s242.

[5] Land Title Act 1994, s115L(2)(b).

[6] Body Corporate and Community Management (Standard Module) Regulation, s67.