By-laws – what is all this new stuff about
We all know what they are and (hopefully) have a grasp on how they are supposed to affect us, but they can certainly be overwhelming when they are not nurtured and grow into an ever-expanding mess of documents. The new strata legislation aims to prune this. The problem is, as with any fledgling statute, interpreting it can be difficult. Worse yet is that information is so readily available to us today and every man and his dog have an opinion on what you should or should not be doing with your by-laws now.
Our advice: scrap everything you have read previously. It will only lead to more questions and confusion. Here is what you really need to know (and how you can do it yourself if you want).
There are three main concerns we are asked to address frequently:
- Are our by-laws still relevant?
- Why do we need to review our by-laws and how do we do that?
- How and why should we consolidate our by-laws?
Question 1 – are our by-laws still relevant?
The provisions of the Strata Schemes Management Act 2015 (the Act) do not invalidate your current by-laws. Your current by-laws are still binding and are still relevant (so put down your hammers and take the pooch back to the pound).
There is some confusion as to model by-laws and whether these have changed and the answer to that is also an easy one. If your scheme is from pre-1996 your model by-laws are now contained in Schedule 2 of the Strata Scheme Management (Regulations) 2016 (the Regulations).
If your scheme is registered between 1996 and 2015 your by-laws will be whatever was registered at the time the scheme was lodged. So you need to check on your certificate of title for the common property and all will be revealed.
If the owners corporation registered any new by-laws or amended any old by-laws then these are also still valid.
The ‘modernised’ model by-laws are contained within Schedule 3 of the Regulations and are only applicable if your scheme decides to adopt and register them now.
Question 2 – why do we need to review our by-laws and how do we do that?
The Act requires you to review the by-laws relevant to your scheme within 12 months of 30 November 2015 (see clause 4 (a), Schedule 3 of the Act).
This means that the owners corporation must table a by-law review at a meeting at some point this year. You must go through your by-laws and if the owners corporation is satisfied with the existing set then a motion should be passed saying that the owners have reviewed their by-laws for the purpose of clause 4, schedule 3 and are satisfied that the current applicable by-laws meet their requirements. It really is as simple as that.
If you can take anything out of this, however, it is that the owners corporation should use this opportunity to seriously consider whether the by-laws are relevant, applicable, necessary, inconsistent, easy to navigate and understand (etc). If not, then the owners corporation may wish to fix them as necessary and register a neat, tidy, consolidated set of by-laws that will assist them up going forward.
We do caution you that this will not guarantee the by-laws are legally sound, legally correct or will be legally binding if queried before a court or tribunal, but it is an easy start and it only requires a moderate dose of common sense to realise whether you may need further legal assistance or not.
Question 3 – how and why should we consolidate our by-laws?
Those living in schemes that have existed since dinosaurs walked the earth will be all too familiar with the frustration of navigating a library of by-laws. There are documents everywhere, annexures lost and found and repealed by-laws that are still in the mix. The Act aims to streamline this and section 141 now requires that the by-laws are kept in a consolidated set.
So what does this mean for your scheme? The short of it is that you MUST consolidate your by-laws at some stage. The long of it is that this will only really be relevant when you next amend, repeal or register a by-law. So next time you march down to Land and Property Information to lodge that new by-law for your sleek new bathroom, you will find you are unable to submit anything unless you provide LPI with a complete and consolidated set of all the by-laws relevant to your scheme.
The good news is that LPI have issued some guidelines to assist you with your consolidation. The bad news is that LPI are still working out the bugs and are yet to decide how they would like your consolidated by-laws to finally look. The best way around this is to print out the guidelines (available on the LPI website), follow them, and take them with you to LPI so you can refer back to them if LPI are unsure your consolidated by-laws have been completed correctly.
Again, it is as easy as that.
There are various articles about reviewing and consolidating your by-laws which sometimes end up confusing and not assisting. All you need to do is review all your by-laws consider (which have not been made invalid by the Act), resolve to continue your love/hate relationship with them before 30 November 2017 and arrange for your strata manager or another volunteer to consolidate them into one set so they are ready to go when the owner of lot 4 decides to register that by-law for their new bathroom.
If they need updating or you are concerned about their validity and the impact of the new Act then you can consider seeking assistance from others.