SP of 4 – The problem you’re facing is that like it or not your Owners Corporation (O/C) gave approval to your neighbour’s renovations without following the relevant provisions of the NSW Strata Schemes Management Act (SCMA), you cooperated, and now that things haven’t worked-out as expected it’s trying to resolve that by enacting those provisions retrospectively.
Apart from urging that your O/C follows the proper procedures in future, all I can suggest is that you tread very carefully on this occasion, as whilst your posts don’t indicate just how much of that “approval” was in writing, your new neighbour could claim he had an expectation that the O/C’s consent was properly given.
Furthermore, the Special By-Law (SBL) that you’re now proposing in order to shift maintenance and repair responsibilities of the plumbing and other works to your neighbour would be unenforceable under the SCMA unless that owner agrees in writing to its provisions, and of even greater significance, if the units-of-entitlement attached to your neighbour’s Lot represent >25% of the aggregate for your Plan, then a “NO” vote by them at a General Meeting would see a Motion to create and Register a SBL fail.
Hopefully, your new Strata Manager knows what he/she’s about and can negotiate an amicable and legally correct solution.