Special By-Law? What’s that?

confused1 – perhaps read the posts HERE in the first instance.

Then, in the circumstances you describe where numerous owners both past and present have renovated their Units to the extent that the consent of the Owners Corporation (O/C) should have been granted beforehand, and other owners now want to, perhaps consider the O/C putting a generic “renovation by-law” on the Agenda of a General Meeting so that those present may consider and hopefully specially resolve to accept and Register it.

Such a by-law (special by-law actually) could, amongst other things, incorporate a provision that the owners of Lots, where renovations of a type that require the prior consent of the O/C have already been undertaken, could benefit from a moratorium of say 6 months during which time they could seek the O/C’s retrospective consent to those on the proviso that they agreed in writing to be responsible for all on-going maintenance of consequent changes to the common property arising from those (renovations), and to have all details recorded in a Register held and maintained by the O/C.

A further provision of the suggested special by-law would be that any owners who choose not to avail themselves of the moratorium by seeking the O/C’s retrospective consent would, prior to the settlement of any future sale of their Lot/s, suffer a notion on the Sect 109 Certificate provided by the O/C stating that its Register has “nothing shown” concerning consented changes to Common Property areas within the Lots; ipso facto any such changes are not consented and are not the responsibility of the O/C!

OK, those last six words (above) are a bit of a try-on, but just as the O/C’s consent may be granted retrospectively so may the provisions of a “renovation by-law” that’s properly passed at the General Meeting and Registered.

I’ve done precisely what I’ve suggested here for our Strata Plan, but as I’m not a Lawyer, I strongly suggest that IF your O/C decides to go this way then it engages one to assist.

dan – absolutely… and I’d strongly recommend that the proposed Special By-Law (SBL) incorporates both the moratorium and the keeping of the Register outlined in my previous post (#2), or at least that the applicable Motion before the Annual General Meeting incorporates those provisions so that they’re “enshrined” in the resultant special resolution if passed.

I don’t know how strata-experienced your Lawyer is, but the process that I’ve recommended is entirely within the provisions of the NSW Strata Schemes Management Act (SCMA), albeit as I suggested earlier the implication that any renovation that’s not shown in the Register is un-consented and that its ongoing maintenance and repair is deemed by the Owners Corporation (O/C) to be the responsibility of the then Lot Owner (who may not be the renovator) could be contested.

I made that observation because in order for any SBL to properly transfer part of the O/C’s responsibility to attend to common property maintenance to an Owner, that Owner needs to agree in writing to that provision. So whilst it could be claimed (as I do) that all Owners agreed to that provision when they passed the Special Resolution to create and register the SBL, a counter-position could be argued, and arguments of the legal variety are the last thing that an O/C needs.

On the subject of your Executive Committee (E/C) agreeing to make your Lawyer’s draft SBL into a generic document in the form that I’ve suggested and to reimburse your costs for the work done to date, you can but try, however remember that your Strata Manager is a consultant/advisor to your O/C, and remind your E/C that it has a legal obligation to ensure that the Strata Plan is managed in compliance with the SCMA and to correct past non-compliances such as those that you’ve identified and about which they’re now aware; that’s what you’re asking them to do and indeed showing them how to do it!

I don’t know how many Lots are in your Plan or how many of those comprise the anonymous renovators, but you’ll need ≥75% of those at the AGM (including by proxy) to support your Motion for the SBL, so best get lobbying for the votes of personal attendees and proxies!

Can’t predict that dan, but as your (Strata) Manager has asked you to follow the legally correct procedures with regard to your proposed renovations, it’s obvious to me that they at least would be amenable to setting right past oversights.

Furthermore, IF any of the previous renovators are current Owners, then I’d expect they too would be receptive to a SBL that merely makes them responsible for maintaining their past works where those involve common property areas; they probably expected to anyway!

It’s the subsequent Owners of renovated Villas that can be potentially problematic, as they may (or choose to) believe that everything’s original, and therefore some is still common property.

In any event, you’ll never know until that Motion is placed on the Agenda for your upcoming AGM; even if you have to submit it yourself!

Our AGM agenda has arrived. It has a proposed motion for our Villa renovations only complete with Special Bylaw, our plans and engineer’s report.

The agenda also has another motion for a Generic Renovation Bylaw which states that the owners of Lot X (me) requested a generic renovation by law be draft and presented at the AGM. (I had actually followed Whale’s suggestion and asked for a bylaw with a moratorium of 6 months so that anyone who needed to could seek the OC’s retrospective consent). The motion explains that the EC got legal advice and bylaws authorising renovation works generally are problematic in light of recent Tribunal decisions.

The motion lists some confusing options all with their own restrictions as follows;

• a bylaw under section 52. This will confer maintenance and repair obligations, but it requires the written consent of all owners (if rights are being given to all owners) and it must specify the relevant area of common property (which is not known for all lots),
• a bylaw under section 47, which contains a pro-forma bylaw under section 52 which owners will complete and send to the strata manager each time they wish to conduct renovation works. This ensures compliance with the ACT and lot owners are saved the expense of arranging their own by-law, however it does not circumvent the need for general meetings each time an owner proposes work,
• a bylaw under section 47 which does confer maintenance and repair obligations or a bylaw under section 52 which is not specific about the affected common property). This was the norm prior to the current interpretations, but it is not certain that bylaws drafted in this way will survive a challenge.

 Can anyone see a way forward?

Wow, I can see why a lot of people would want to move into your apartment block before anything was implemented and stay there! It sounds almost as good as owning their own property. At the same time, to address your issue, it may be a fair idea to see if you can get the residents to meet up and figure out whether they agree with the by-law being passed as obviously they are not going to be happy to be charged fees for something that they’ve not been penalised for for such a long time! Be careful, people might start moving out!

Dan – whilst the Owners Corporation (O/C) can require the Lot Owner to undertake the works, I’m of the opinion that as its Common Property (CP) is involved the O/C should commission and supervise the entirety of the works, with entry if necessary being obtained under the provisions of Sect 65, and with the O/C’s total costs (i.e. for works on its CP and any required on/for the Owner) being recovered in accordance with Sect 63. Of course each party could attend to their own works, but as that’s generally neither cost effective nor desirable my definitive answer to your question is… the O/C.

However (there’s always at least one in Strata) whilst Sect 65 refers the an O/C entering a Lot to undertake works that are required under the Strata Schemes Management Act (SCMA), and Sect 63 permits the O/C to recover its costs of undertaking those works where those would otherwise be the “duty” of the Lot Owner, and strident advice on both of those may well “encourage” those past renovators in your Plan to agree to the O/C’s proposed Special By-Law (SBL), if they’re not convinced and that SBL fails to pass the vote at your AGM, then you could hit the proverbial (renovated) brick wall.

Why?

Well if that SBL fails to pass then I can’t see that same group of Owners (as the O/C) applying for Orders under Sect 140 – which I see as the approach most applicable if the O/C’s approach was that it IS prepared to retrospectively consent to all past renovations IF the Order makes the current Owner/s of affected Lot/s responsible for the maintenance and repair of those.

I don’t wish to be personally critical, but on a generic basis I have to observe that after almost 4 years on this Forum I can’t understand how Owners can still undertake substantial renovations to their Lots that involve the CP with no other Owners being aware of the requirements for obtaining prior consent to those, or even seeking guidance or advice from their Strata Manager if and until it’s too late! 

Fingers crossed that your SBL passes and that your Strata Manager has both the knowledge and the commitment to bring all those past renovators into the fold.