New laws require strata schemes to review their by-laws by 30 November 2017.
This means that each of the 75,000 strata schemes in NSW that existed before the new laws came into effect on 30 November 2016 must undertake this review.
The laws do not specify what the ‘review’ of a strata’s by-laws must entail, however, in our view, executive committees (now called ‘strata committees’ under the new laws) should do more than a cursory review to satisfy their duty to act in the best interests of the strata owners corporation.
The new laws also require the secretary of the strata committee to keep a consolidated and up to date copy of the by-laws. We recommend that an owners corporation firstly prepare the consolidated set of by-laws followed by the ‘review’.
While the new laws do not require any particular manner or form for the review, we suggest that strata committees engage in a consultative process with all lot owners. This could involve the strata committee inviting comments from lot owners on what new by-laws they would like and which should be removed or modified. The strata committee could then consider the suggestions and propose an amended set of by-laws for adoption at a general meeting of the owners corporation. Another method may be to consider the existing (consolidated) by-laws on a one-by-one basis. A special resolution at general meeting is still required to pass, remove or amend by-laws. Additional requirements apply if it involves removing or amending exclusive use by-laws.
A strata committee may also like to start reviewing their current by-laws by considering the changes on the laws. We have recently issued a six part series on these which can be found here: Part 1, Part 2, Part 3, Part 4, Part 5 and Part 6.
The new laws also introduced new model by-laws. They cover some new topics such as occupancy limits, pets and smoking. These may prompt discussions among owners about what they want their by-laws to contain.
Naturally, we also recommend that an owners corporation use both a lawyer and their strata manager to help guide the review process. This would include:
- Helping prepare a consolidated set of by-laws;
- Providing advice and assistance in understanding the nature and effect of the existing by-laws as well as advising on existing and proposed by-laws for their legal validity and enforceability;
- Preparing appropriate motions for an owners corporation to consider adopting changes to the by-laws; and
- Registration of any changes to the by-laws approved by a general meeting with Land and Property Information (the current name of the Land Titles Office) in a consolidated form.
This article is for general information only and not legal advice. Legal advice should be obtained before taking any action or otherwise rely upon the content of this article in any way. This article was prepared on 8 February 2017 and has not been revised to account for any changes in the law since that time.