How vital is a good set of 'modern' By-Laws?
[UPDATED 8th Nov 2109]
It goes without saying, that every Committee, every Body Corporate, wants, deserves, and expects, that their By-Laws, are valid, enforceable and ‘fit-for-purpose’, BUT…
By-Laws – the list of ‘rules’ that every Body Corporate must have. They lie dormant most of the time, but occasionally are trotted out and presented to some miscreant resident to try and correct some action or behaviour that is deemed inconsiderate, selfish, dangerous, or encroaching on the rights of others. And for the majority of these occasions, simply presenting to this resident the proposition that their actions are not acceptable, and are in breach of one or more of the By-Laws will be sufficient for them to cease and desist. So the bluff worked, and mostly does – but often it doesn’t i.e. the troublesome resident, either an Owner or tenant, simply ignores the Body Corporate’s request and warning (even if that request and warning is made by way of a formal Contravention Notice), leaving the Body Corporate to simmer and mull over what to do next. And what can come next might be that either party launches a formal Dispute Resolution application with the BCCM Commissioner’s Office. And this is when the quality of the By-Laws is likely to be focused on and come into play, because so many By-Laws that Bodies Corporate are silently relying on, would be deemed “unreasonable”, “unenforceable”, “ambiguous”, “obtuse”, “invalid”, or “illegal” – by an Adjudicator or Tribunal Member who is adjudicating on some dispute.
The case-law of Adjudications is littered with Orders finding that a particular By-Law an applicant was relying on for part of their case, falls into one or more of the descriptions above: “unreasonable”, “unenforceable”, etc. And in such cases, generally the Adjudicators final orders will include recommendations or actual directions that the Body Corporate remove, amend, or replace the offending By-Law – and of course that requires a New Community Management Statement being lodged and Registered to get the amended By-Law set into force. If the Body Corporate loses the Dispute Resolution case because of such an offending By-Law, then that’s a considerable setback of course, not to mention the embarrassment, time wasted, and costs.
““...so many By-Laws that Bodies Corporate are silently relying on, would be deemed “unreasonable”, “unenforceable”, “ambiguous”, “obtuse”, “invalid”, or “illegal” – by an Adjudicator or Tribunal Member who is adjudicating on some dispute.””
So it’s really sensible for a Body Corporate to have a good, ‘modern’ set of By-Laws that they can have a high degree of confidence will withstand a challenge. And the extent of the problem here is considerable, because it’s been suggested by experienced strata lawyers, that most Strata Schemes in this State will have By-Laws containing one or more ‘questionable” By-Laws – ones that wouldn’t pass scrutiny by an Adjudicator, and many will have By-Laws that are undoubtably invalid and/or illegal.
The types of By-Law that fall foul of Adjudicators most often include those dealing with: Pets, Visitor Parking, Hard Flooring, Smoking Prohibition, Appearance of a Lot, Noise, as well as any By-Law that seeks to impose a monetary penalty or cost on a Lot Owner or Resident (except for an Exclusive Use By-Law).
It goes without saying, that every Committee, every Body Corporate, wants, deserves, and expects, that their By-Laws, are valid, enforceable and ‘fit-for-purpose’, BUT, the only way to ensure they are, is to have them reviewed by a good strata lawyer who is very active in the area of Body Corporate dispute resolution, and is across the ever-evolving case-law. The cost for such a review and the likely necessary amendment of the By-Law set isn’t high, and it’s something every Committee should consider.
You might be wondering how on earth completely invalid, or even illegal By-Laws can get registered - and the simple answer is, that they are not checked for validity, or even looked at by any Government agency before the Community Management Statement containing them is registered. So it’s up to the party lodging the By-Laws to ensure they’re valid and appropriate for the Scheme.
You might also be wondering about the origin of the By-Laws for your particular Scheme - where did they come from? Well, in nearly every case, it was the solicitor acting for the original developer who would have supplied them, and in many (most) cases, that solicitor will not have been acquainted with the most up to date attitudes of the departmental BCCM Adjudicators and QCAT Tribunal members, as say, a lawyer that specialises in Strata law and is active in the disputes area. So the By-Laws often start out not being ‘great’, and then might get worse when the Body Corporate makes additions and amendments to them over the years. The other thing to bear in mind is that the status of ‘suitability’, and ‘validity’ is a moving target. By-Laws that years ago didn’t offend the Adjudicators, will these days raise their hackles - By-Laws concerning Pets, Hard-flooring, Vehicle Towing, Smoking are examples where attitudes and case-law has evolved.
Here is an actual example of an Adjudicator’s Order relating to inappropriate and invalid By-Laws:
The Body Corporate for ‘Tea Trees’ [2017] QBCCMCmr 60 (10 February 2017)
ORDERS MADE:
I hereby order that the following by-laws for the Body Corporate for Tea Trees, as recorded in the community management statement on 27 September 2016, were at all times void:
By-law 2.1 and 2.2
By-Law 3.2(b), 3.3(b), 3.4(c) and 3.5(a)
By-Law 4.1(b)(ii) and 4.1(c)
By-Law 5.5
By-Law 7
By-Law 10(b)(i) A and 10(c)
By-Law 12
By-Law 16(a)(ii)
By-Law 17(a)(iii),(iv),(v) and (vii)
By-Law 20(a)(i),(ii) and (iii)
By-Law 21.2(b), 21.3 and 21.5
By-Law 22
By-Law 23
By-Law 27
By-Law 31
By-Law 33
By-Law 36
By-Law 37.4
By-Law 41.1(e) and 41.2(b)
I further order that, within six months of the date of this order, the Body Corporate for Tea Trees shall record a new community management statement that removes the above invalid by-laws.
I further order that, for such time as the above invalid by-laws continue to be recorded in the community management statement, the Body Corporate for Tea Trees must not implement or enforce those by-laws.
