Over 25 years ago our regular guest columnist Francesco Andreone enthusiastically promoted by-laws as the best way to customise strata building operations. 

However, he now thinks the proliferation of strata by-laws and rules since then has gone a bit too far; leading to many unnecessary, inappropriate and invalid by-laws and rules with most strata stakeholders placing undue reliance on them to fix all strata problems.  

Here are some of Francesco’s examples of bad by-laws and rules, from his own website GoStrata, and his thoughts about how to tame the strata by-law beast.

INTRODUCTION

You’ve probably heard of … the ‘law of the instrument’ or the ‘Birmingham screwdriver’. It goes something like: ‘If all you have is a hammer, then every problem looks like a nail.’

It refers to the practice of using one tool (usually your favourite) for all purposes.

Well, I’m worried that too many strata mechanics think their by-law or rule hammer can fix everything that happens in strata buildings and are using it everywhere.

I’ve had to review a few by-laws and rules and found some serious flaws in a surprising number of them.  Plus, many of them are poorly written (verbose, overly formal and unstructured) and others are just impractical or impossible to apply or enforce.

What gives, and why?

SOME BAD BY-LAW & RULE EXAMPLES

Here are just three examples of the unnecessary, invalid or just bad use of strata by-laws and rules I’ve come across (plus the problems with each of them).

1. A NSW by-law that restricts the number of people that can be in strata lots or use common property facilities that’s intended to stop overuse by non-residents

This kind of by-law restricts people numbers and is intended to prevent the overuse of common property facilities like a gym or pool, particularly by non-owners or non-residents as strata buildings somehow consider it unfair that they do so.

But, strata owners and strata tenants have unfettered property rights to have guests and visitors to their lots and to use the common property, so this kind of by-law is likely to infringe on their basic private property rights.

It’s also likely to be outside the very limited scope that the untested provisions in section 137 and regulation 36 of the NSW strata laws appear to give to by-laws limiting the number of adults who can reside in a strata lot. 

So, there are serious doubts about the validity of that kind of by-law or rule. Plus, I don’t know how it would be policed or enforced.  I guess those strata buildings will also try to limit fob or other security device access which opens another legal can of worms.

• A rule that requires polite communication between strata owners and others and excuses committees, managers, etc from responding to rude contacts

This kind of rule or by-law prescribes behaviour in communications and sometimes authorises strata committees, managers and others from having to respond to rude communications.

I suspect a rude strata owner would not know (or care) about a politeness by-law. Or, even if the strata committee could respond by sending the strata owner a copy of the politeness by-law that’s unlikely to work.

It’s very likely that trying to prescribe communication protocols isn’t within the functions of strata corporations. 

Plus, to the extent that the strata laws require strata corporations to respond to or deal with strata owner requests, a rule or by-law saying they don’t need to will be invalid.

And, exactly how do you define appropriate and inappropriate communications?

Perhaps there are better ways to improve intra-strata building communications.

• A strata by-law or rule restricting the installation of and prescribing controls over apartment blinds and curtains.

These kinds of strata by-laws or rules are often found in newer and more upmarket strata buildings and are intended to provide a more uniform appearance to the strata building when viewed from the outside. 

However, there are already standard appearance by-laws or rules in most Australian states that deal with appearance issues in less prescriptive way and Cooper’s Case in NSW suggests that blanket bans in by-laws will be invalid.

Plus, in New South Wales, the strata law provisions about cosmetic and minor alterations allow blind and curtain alterations without approval so this kind of by-law or rule would be ineffective to the extent it is inconsistent with those strata law permissions.

There are many many more examples of bad by-laws or rules like those banning pets, Air BNB, and imposing money penalties and fines.

Frankly, invalid and poorly written by-laws and rules are a waste of strata stakeholder time as they’re never going to fix any problems and will hurt the strata building and the wider strata sector in obvious and less obvious ways.

But, even valid and properly drafted by-laws may also be a waste of time because the by-laws or rules may be trying to fix problems that don’t need fixing, as they are dealing with issues where societal and legal thinking has moved on or because they can’t be effectively enforced.

And, it’s not just strata committees, strata managers or strata lawyers who love strata by-laws and rules … so do governments as they suggest more and more of them to strata buildings even though it’s increasingly likely that even some statutory by-laws might be invalid.

Plus, haven’t we learned by now that generic by-laws and rules don’t apply neatly to all strata buildings and overly detailed by-laws and rules apply awkwardly to most strata buildings.

MORE ABOUT BY-LAW AND RULE PROLIFERATION

So, why is all this by-law and rule making happening in strata buildings and what can and should be done about it? 

Here are 13 observations about by-laws and rules. 

They’re shortlisted in this article but are discussed in more detail in the paid subscriber version.

1.   Writing a rule guarantees nothing.  After all, remember King Kanute.

Although there have been strata by-laws and rules for a long time, some of the originals (like parking in common property spaces) are still being breached today. 

So, the mere existence of the prohibition isn’t enough to change strata owner or resident behaviour.  And, that’s for fairly obvious and well-known strata by-laws and rules.

So, more elaborate, esoteric, specific and one-off strata by-laws and rules are even less likely to be followed.

The reason why that is has to do with a few things like:

• strata owner and resident awareness and understanding of the by-laws and rules when made and on an ongoing basis (especially as strata owners and residents change),
• poor understanding of strata committees’ expectations for compliance and a lack of guidance as to what’s expected (also on an upfront and ongoing basis), and
• attitudes towards compliance in strata buildings, and
• individual temptations to act selfishly.

So, just because there’s a by-law or rule doesn’t mean anyone knows about it and/or will comply. 

After all, the sea didn’t follow Kanute’s proclamations about the tides.

2.   The commoditisation of by-laws and rules has led to higher volumes and lower quality.

A strata by-law or rule is a complex legal instrument intermediating property rights in a strata title building.  It should be drafted by legally trained people who understand and have experience with strata laws and strata building operations.

But, like most things in the strata business world, many people who are drafting and registering strata by-laws and rules are competing for the work by reducing prices, offering packages and/or selling DIY versions. 

That’s inevitably going to reduce quality and, hence, the effectiveness and enforceability of those strata by-laws and rules.

And at the same time, there’s overselling by-laws by those businesses; promoting by-laws as the panacea for all strata ills, suggesting and preparing by-laws that have no useful benefits, encouraging frequent by-law reviews, and, sometimes panic selling the need for by-laws. 

And, finally, there’s the problem of strata by-law and rule copying, where someone takes a by-law or rule they saw somewhere else and just copies it (or even worse changes it without knowing what they’re doing) to make themselves look good, save money or pretend they know what they’re doing.  

All this just means more and more strata by-laws and rules are being made that are of lower and lower quality and usefulness.

3.   Technology makes wordiness easier leading to longer and longer strata by-laws and rules that are harder to interpret and understand.

I was taught 2 things about drafting legal instruments at the beginning of my professional career.

First, that you should make the legal instruments you prepare as simple as possible to achieve the desired outcome.

Second, that you should draft everything with the mindset that a Supreme or High Court judge will end up reading it.

I’ve written about what happens under the second rule, when the NSW Supreme Court looked at a simple pet by-law, in my article about Cooper’s Case where the Court was very critical of the drafting of that by-law despite its simplicity.

But, the advent of technology over the last 30 years from personal computers, word processing, mass storage, web-based file sharing, comparison software tools, Large language models, etc has made following the first teaching a lot more difficult. 

After all, it’s just too easy to write more and add extra to any document (including strata by-laws and rules) as drafts are prepared, reviewed and circulated for comment.  Plus, who doesn’t like an extra clause or two in a legal document and no lawyer I know is likely to argue with a client who suggests more details and extra provisions in the work they do.

4.   The courts have warned us about strata by-laws and rule limits (more than once) so we should be paying attention.

There’s been a series of superior Court decisions that have analysed strata by-laws and rules that have surprised people along the way with judgements permitting by-laws that no-one thought were valid (in White’s case) and that other popular by-laws were invalid (in Cooper’s case).

For instance, some of the things that were said in Cooper’s case were as follows and gave everyone clear guidance about the limits of behavioural controls in by-laws and rules.

• The power to make by-laws is inherently constrained by the indefeasible nature of owners’ property rights.
• If a by-law restricts activities, the restriction must protect another owner’s ability to enjoy their property rights.
• The connection between the restriction and the protected rights must be ‘rational’; or logical and obvious.
• By-law validity must be considered objectively; not based on individual or specific experiences, beliefs or knowledge.
• Societal values are relevant to the assessment of by-law validity.
• Administrative convenience or certainty for strata buildings doesn’t justify restrictive by-laws.
• Majority views (even if unanimous) do not protect or enhance by-law validity (according to Justice Fagan at least).
• By-laws will be inherently invalid if they infringe these tests, despite the specific controls in s 139 on harsh, unconscionable or oppressive by-laws.
• Where there are other mechanisms (like other laws or by-laws) to deal the problem behaviours, that may be enough to make a by-law on the matter invalid.

So, let’s see if strata buildings stop making blanket ban strata by-laws and rules.

5.   Most strata by-laws and rules are honoured in the breach (or by ignorance) rather than because they’re valid.

Since most strata stakeholders don’t know the strata laws and aren’t reading strata cases, they can’t tell if a strata by-law or rule is valid or not. 

Plus, land title registry processes require registration but don’t involve or give them validation.

So, it’s likely that most people will believe a strata by-law or rule is valid if it’s registered and act on the basis that it must be valid and effective. 

However, they may often be wrong and rely on or base their compliance propensities on a flawed understanding of how the strata building should operate and invalid controls. In the worst cases that can even be done intentionally.

For example, many years ago I was asked to prepare a by-law that was clearly invalid and unenforceable.  I advised about the invalidity and explained why.  But I was politely told that the strata building understood all that, but still wanted the by-law prepared and registered since they believed (or knew) that once registered most strata owners and tenants would believe it’s valid and comply with it regardless.

This type of thinking and the ‘compliance’ effect encourages more strata by-laws and rules with less concern about their validity.

6.   Subordinate legislation isn’t easy to write (even government lawyers whose job it is to do this every day can get it wrong).

Since strata by-laws and rules have legal effects and many commentators talk about strata buildings being a fourth tier of government (which I don’t agree with), writing by-laws is a bit like writing other kinds of laws.

That’s not easy. 

State and Federal governments have teams of highly trained lawyers that do that (and only that) every day.  Yet even, those statutes contain errors and uncertainty and regularly have to be interpreted by Courts or get overruled including in relation to strata title issues like they did in Vickery’s Case which you can read about in the Case Watch Lot Owner Damages Claims Clarified.

So, we should expect that even the best efforts to make clear and effective strata by-laws and rules will fail from time to time.  

7.   Strata by-laws and rule making give committees and managers something to do.

I believe that many strata committees and managers are and feel disempowered to effectively manage strata buildings due to long term law reform trends shifting decision making control to strata owners and the strata management sector’s hands-off approach to risk management (which I’ll be writing about soon).

So, strata committees and managers are looking for and need something to do in strata buildings to keep them busy, appear relevant and validate their decision to be a committee member or to appear more valuable as strata managers.

But, there’s lots they can’t do like undertake major projects in the strata building since they can’t ensure strata owner support or funding for them in many cases, And, they are scared to initiate new projects for fear of criticism for the idea or spending money.  Plus, there’s often not enough money to go around anyway.

So, activity and noise around the strata by-laws and rules (like reviewing existing strata by-laws and rules, making new by-laws about a one off problem, and, adding rules they read or heard about elsewhere, etc) becomes an easier, cheaper and lower risk way to keep busy and look like they are helping out and valuable.

It’s like strata tinkering.

8.   Profit motives by service providers lead to more new strata by-laws and rules (and more tinkering with existing strata by-laws and rules).

Drafting and registering strata by-laws and rules is a commercial exercise for the lawyers, non-lawyers and managers who do it.

So, they’re all incentivised to market, promote and sell services to make new strata by-laws and rules and to keep tinkering with existing strata by-laws and rules.

I’ve mentioned the overselling of strata by-laws and rules as the solution to all strata problems in item 2, but it can go further than that as strata buildings are encouraged to have a by-law audit or review their rules based on notions of good governance and/or because of law reforms.

I even heard someone tell strata buildings that they needed to update their strata by-laws and rules because the terminology used for the strata committee changed to correct those references without mentioning (or perhaps knowing) that the transitional provisions in the strata laws covered any such anomalies.

9.   It’s a waste of strata resources (time and money).

Making unnecessary, ineffective and unnecessary strata by-laws and rules is a huge waste of strata building resources.

It’s not just the external charges for the strata by-laws and rules that are wasted, but think of the time spent by:

• strata committees and managers discussing and deciding about by-law changes,
• managers instructing others to draft them,
• everyone internally circulating documents around about progress,
• committees, managers and others reviewing and commenting on drafts,
• regulators registering them and maintaining registries (and others searching them),
• future committees, managers and strata owners reading the strata by-laws and rules, and
• Courts and Tribunals (and the parties) running cases about them.

Those resources could be better used on something else in the strata building or everyone could just rest up, do something more enjoyable, save manager time, and/or keep the strata money in the bank.

Imagine the total cost of those efforts in the Horizon apartment complex over the by-law in Cooper’s case.

10.  Strata by-laws and rules should be simpler and do more limited things (less is more).

As I’ve said in Item 3, legal instruments should be as simple as possible to achieve the desired outcome as that will make them easier to understand and more likely to be effective.

That means the following things for strata by-laws and rules as they force drafters to think harder and they make it easier for strata stakeholders to understand them.

• Make strata by-laws and rules shorter.
• Each strata by-law and rule should address a single (or at least only a few) issue/s.
• Utilise statutorily defined terms rather than creating uniquely defined terms to take advantage of an evolving body of strata laws and transitional provisions.
• Use plain and modern legal English.
• Use short sentences, lists and headings in more complex versions.

We can do better on strata by-laws and rules if we try.

11.  Communicating by-law or rule existence and compliance guidelines would be a better strategy.

Rather, than making more strata by-laws or rules that aren’t effective, I recommend putting all that effort and money into better communication with strata owners and residents about existing strata by-laws or rules to increase awareness and compliance levels.

An effective communication and education campaign would do that as well as improve the standing and reputation of strata committees and strata managers. 

That’s especially so if it’s repeated regularly and backed up with useful guidance like case studies, examples of the problems resulting from non-compliance, easy to follow guides about what is considered good and bad behaviour, visual tools, etc. 

There are a lot of options available that could only help all strata stakeholders.

I believe better strata by-law and rule communication would get much better levels of strata by-law and rule compliance.

12. There’s usually an existing strata law or mechanism to deal with the issue anyway, so a by-law isn’t really needed.

In many cases, I’ve seen strata by-laws or rules being made to address issues that are already covered in the strata laws or other laws.  Why is that happening?

For example, the societal shift against smoking has led to many no smoking strata by-laws or rules being made (even if Cooper’s case puts them in doubt) which is probably unnecessary

But there are better and more effective enforcement mechanisms in the strata and other laws that treat smoke drift as an actionable nuisance (in the legal sense of the word) that can be enforced.

Perhaps it’s a lack of knowledge about these other laws. 

Or, perhaps strata committees and strata managers, think that putting the control in a by-law makes it easier to tell strata owners and residents about it and do something about it.

Either way, they’d be wrong and this is a waste of resources and a bit embarrassing.

13. Enforcement hurdles and dilemmas make most strata by-laws and rules moot.

What is the point of a strata by-law or rule that can’t be enforced?

In most Australian states, strata by-laws or rules are generally enforced by seeking orders (and sometimes penalties) in specialist Tribunals (like NCAT, VACT, QCAT, etc).  But, those processes are slow and uncertain and the sanctions are limited (they only last for limited periods, impose relatively small fines or penalties, and, the fines/penalties don’t go to the strata building).

Many strata offenders know that the prospect of being held accountable in any serious ways for by-law or rule breaches is very low and very slow.  Strata committees and managers know that too.

It’s even worse with non-owner strata residents who breach strata by-laws or rules since they often can’t be identified and by the time mediation, adjudication and hearing processes play out in specialist Tribunals, they’ve left the strata building.

So, perversely strata by-laws or rules are usually followed by people who would act properly without them in place and the serious offenders can’t usually be stopped effectively or at all.

CONCLUSIONS

So, as important as by-laws and rules are in strata title buildings, they aren’t always the best or even a good solution to problems or issues. 

However, it seems that strata stakeholders (including the professionals) still think they’re the panacea for all strata ills.

It’s time they ditch their strata by-law and rule hammers for more strata information and education, better application of existing strata and other laws, and more modern, specialised and useful tools.

December 12, 2023