In my experience, advice from the Department of Fair Trading can be a bit wonky. Not that long ago they told me to apply for an order against a builder who had gone bust – I told them that wasn’t going to achieve anything as the company was insolvent, all it would do was cost us money. So I would take what they tell you with a grain of salt
Back to this issue – even if the OC had passed a by-law, and I doubt that they have, that by-law could not apply retrospectively. What I mean by that is that you paid the deposit for the keys under whatever rules applied at that time, and the OC (or the EC) cannot unilaterally change those rules without your consent. You paid them the money under specific terms, and those terms still apply.
For example, if someone was given permission to keep a pet, and the OC subsequently put in a by-law banning pets, the new by-law would not apply to that person and that pet, because they were given permission under a by-law that permitted pets. You cannot apply a new by-law retrospectively.
Jimmy’s right – it is very difficult to put in a new by-law and I doubt that the OC has done that. The EC can’t institute rules to suit themselves. One thing I wonder is where they have put the money, as it is trust money it doesn’t belong to the OC, so if they have moved it to the sinking or admin funds then that is a breach of the trust arrangement.
Another option would be to lodge a claim with the Small Claims Tribunal for the return of the money, that would probably be the cheapest option for you, refer link below. I do suggest you contact your landlord though and see what they have to say.
https://www.lawlink.nsw.gov.au/lawlink/lawaccess/ll_lawassist.nsf/pages/lawassist_debt_small_claims_home