BY-LAW BYPASS, the Road to Nowhere??!!

Byron Twain wrote:

Are we legally compelled to create By-Laws? If not do the Model By-Laws apply? Some sparkling clarity would be greatly appreciated —

Sorry, Sir .. we only serve ‘still’ clarity in the Flat Chat Cafe … but then it does run deep.

To answer your question, I have been told that if a strata plan is created and no by-laws are formally adopted then the ‘model’ by-laws that were in place AT THAT TIME come into effect. I say ‘at that time’ because the model by-laws don’t update automatically when they are changed by the powers that be. Once they’re in place, they can only be changed by a special vote of the Owners Corp.

However the strata schemes freehold development and leasehold development Acts seem to demand that by-laws have to be presented when the strata scheme is registered.

I have been told that there is a quirk in the legislation that Owners Corps can decide not to have by-laws …but I’ve never heard of this happening and I’m not even sure if it’s true. Even so, that would require a decision to be made.

In your case, if there really was no decision to accept by-laws then you need to find out the model by-laws that were on the books when your strata plan was formed because it may be that’s what you’ll have whether you want them or not.

Now stand back as a stampede of legal eagles (if you can have such a thing) tramples me into the ground with the facts.

While we’re waiting for that, here’s what the NSW strata Act says:

Division 1 What by-laws apply to a strata scheme?

41   What by-laws apply to new strata schemes?

(1)  This section applies to strata schemes that came into existence after the commencement of this section.

(2)  The by-laws in force for a strata scheme are the by-laws adopted by or lodged with the strata plan registered by the Registrar-General for the strata scheme, as in force at the date of lodgment, subject to any amendment, repeal or addition recorded by the Registrar-General under section 48.

Note. Section 8 of the Strata Schemes (Freehold Development) Act 1973 and section 7 of the Strata Schemes (Leasehold Development) Act 1986 require that when a strata plan is submitted for registration it must be accompanied by the proposed by-laws for the strata scheme. Those by-laws are registered with the strata plan.

42   What by-laws apply to old strata schemes?

(1)  This section applies to strata schemes in existence before the commencement of this section.

(2)  The by-laws set forth in Schedule 1 are the by-laws in force for a strata scheme, including any additional by-laws, or any amendments or repeals relating to those by-laws, that have been registered for the strata scheme in accordance with:

(a)  Division 3 of this Part, or

(b)  Division 1 of Part 4 of the Strata Schemes (Freehold Development) Act 1973 as in force immediately before its repeal, or

(c)  Division 1 of Part 4 of the Strata Schemes (Leasehold Development) Act 1986 as in force immediately before its repeal.

Clarity yet?  This is what Section 8 of the Strata Schemes (Freehold Development Act) says:

(4B)  A plan intended to be registered as a strata plan must indicate:

(a)  that specified model by-laws prescribed by the regulations made under the Strata Schemes Management Act 1996 are proposed to be adopted for the strata scheme and, if those model by-laws contain one or more alternative versions of any by-law, that the specified version of that by-law is proposed to be adopted, or

(b)  that other specified by-laws are proposed to be adopted for the scheme.

(4C)  If a strata plan indicates that by-laws other than the model by-laws prescribed by the regulations made under the Strata Schemes Management Act 1996 are proposed to be adopted for the strata scheme, the plan must be accompanied by the by-laws specified. The by-laws must be in the form approved under the Real Property Act 1900 and must have been signed by the persons required to have signed the strata plan under section 16 (1).

(4D)  The proposed by-laws for a strata scheme have no effect until the strata plan (and any proposed by-laws that are required to accompany it) are registered. However, registration does not operate to give effect to by-laws that have not been lawfully made.

Section 7 of the Strata Schemes (Leasehold Development) Act says pretty much the same.