Challenging Unlawful or Irregular Acts by an Owners Corporation

09/06/2016

In Strata Schemes, the Owners Corporation has the power to make changes to the rules of the Strata Scheme so as to do various things such as altering or adding to common property and adjusting the entitlements of Lot Owners. These changes are often made by making new rules or “by laws”.  

In addition, however, Owners Corporations can be managed by a small number of people who are inexperienced and this can lead to mistakes and errors in the making of fresh rules, such that a relevant by-law or rule is illegal or unfair. 

A recent case conducted by Watson & Watson Solicitors indicates this point. 

This firm acted in relation to a small Strata Scheme involving several lots.  Due to a lack of record-keeping and other factors, one of the Lot Owners applied for the appointment of a Compulsory Strata Managing Agent.  This meant that the Strata Managing Agent had the power for a period of 12 months to carry out various tasks in relation to the Strata Scheme. One of the things that the Strata Managing Agent could do was to make a by-law which allowed one of the Lot Owners to extend part of his apartment.  The extension was fairly large and involved the lodging of a Development Application with the Local Council.

When other Lot Owners learned of this extension, an examination of the various plans for the Strata Scheme revealed the extension would protrude into the Lot owned by a neighbouring Owner.  The Strata Manager had accordingly made a by-law which was illegal in that it allowed one Lot Owner to build into the land owned by another Lot Owner. The neighbouring Lot Owner approached Watson & Watson, Lawyers for assistance in challenging the by-law.

We made representations to the Local Council and also filed an Application to the NSW Civil and Administrative Tribunal (NCAT) challenging the making of the by-law on the basis that it was illegal in that it allowed one Lot Owner to extend into the property of another Lot Owner. 

Following the filing of the NCAT Application and the representations to the Council, the Lot Owner who had applied for the extension agreed not to proceed with the unlawful work and also arranged for a fresh by-law to be made by the Strata Manager which made it clear that the extension in the neighbouring Lot would not take place. 

The result of this case was that the Lot Owner who was liable to lose property as a result of the by-law was able to overturn the by-law and prevent the illegal work.  The Application to NCAT involved a submission that the offending by-law was illegal under Sections 157 and 159 of the Strata Schemes Management Act, 1996. 

If you have any enquiries in relation to Strata Law matters for example you have an issue with your neighbouring Lot Owner wishing to extend their Lot and you are unsure of your rights or do not agree, please feel free to contact Richard Watson our experienced Strata Solicitor at Watson & Watson Solicitors.  We will advise you on Local Development Law, representations relating to by-laws and other disputes and assist you with Tribunal proceedings which may be necessary.