The dangers of template by-laws and building rules

A by-law expert from Kemps Petersons Legal explains why tailored by-laws and building rules are safer and come with far less risk

By-laws and building rules play a vital role in community living settings, as they keep strata properties harmonious by regulating what owners and residents can and cannot do. However, if the by-laws your owners corporation adopts do not suit your strata property and its needs, they can result in disputes, hostile community living experiences and even legal consequences. That’s why getting your by-laws right is crucial.

While some owners corporations choose to adopt template by-laws instead of consulting a strata lawyer for tailored by-laws, this may not be a wise option. To learn more about the dangers of template by-laws and why tailored by-laws are always preferable, we spoke to Sarah Louangsombath. Sarah is one of a team of dedicated by-law experts at Kemps Peterson Legal, which is part of the PICA Group family.

Sarah shared that before all else, it’s important to understand that there are restrictions on what can and can’t be included in a by-law, regardless of if they are template by-laws or by-laws that are tailored specifically for your strata property.

“A by-law can’t be harsh, unconscionable or oppressive. It cannot restrict a dealing in a lot, restrict children occupying a lot or prohibit or restrict assistance animals on a lot,” Sarah confirmed.Here are 5 reasons why you should choose tailored by-laws and building rules over template by-laws and building rules:

1. Template by-laws likely won’t take your strata property’s unique circumstances into account
2. They may not take recent case law or changes to account
3. Without a consultation with a strata lawyer, you could miss the best solution to your problem
4. Template by-laws may not be adopted properly without guidance
5. The risk falls onto the owners corporation when template by-laws are adopted

Template by-laws likely won’t take your strata property’s unique circumstances into account

Good by-laws are drafted to tailor to the circumstances and factors raised by a strata property’s committee or owners corporation. In comparison, template by-laws, which are often quite generic, may not suit a strata property’s specific situations.

“Template by-laws are generally drafted without advice, so the committee or owners corporations can run the risk of not properly understanding what’s necessary for their unique situation,” Sarah clarified. She explained that this might lead to the risk of potential liability, which would have been noted and pointed out if a member of the committee or the owners corporation had approached a dedicated strata lawyer for tailored by-laws.

“Take Kemps Peterson Legal’s CCTV by-laws service, for example. There are a number of factors we consider when drafting and tailoring this type of by-law, including whether the cameras record visual images, audio or both,  whether security cameras are to record common property only, whether the by-law pertains to new and/or existing cameras, who is responsible for repairing and maintaining the cameras, conditions of use and installation, and laws that may play into CCTV camera usage including the Privacy Act 1988 and Surveillance Devices Act 2007 (NSW). Template by-laws may not cover all of this,” Sarah shared.

They may not take recent case law or changes to account

Sarah shared that by-laws can extend to other local or statutory laws or regulations affecting specific strata properties. This may lead to problems for strata properties that have adopted template by-laws. What does that mean, you ask?

“Template by-laws that were drafted some time ago may not take into account important recent changes in case law or legislation. This could affect an owners corporation’s legal rights or make the by-law rendered void in some instances. For example, let’s consider by-laws around the keeping of animals.

The model by-laws that appear in 2005 regulations, which may have been adopted by a strata scheme, provide an option of a blanket ban on pets. However, if a New South Wales strata property adopts a template by-law that completely prohibits the keeping of animals, it may be considered void, as seen in recent case law. In October 2020, a court of law ruled that the strata scheme in question, which had adopted a by-law that completely prohibited the keeping of animals, was oppressive and in contravention of Section 139 of the Strata Schemes Management Act 2015 (NSW). The court ruled that blanket bans of animals could be oppressive and rendered void. This means any strata scheme that has a similar by-law, or adopts a template by-law that accommodates a blanket ban of pets in the future, may be open to NCAT proceedings,” Sarah explained.

Tailored by-laws will take this new case law and other case law relating to strata living into consideration. Experienced strata lawyers like the team at Kemps Peterson know not to draft by-laws that contradict new legislation, regulations or case law.

Without a consultation with a strata lawyer, you could miss the best solution to your problem

While by-laws are a great solution to problems and concerns that have arisen in strata properties or may arise in the future, they aren’t always the best solution or even the only solution.

Sarah explained that those who adopt template by-laws without consulting a strata lawyer for a more tailored approach might sometimes miss the opportunity for a better solution.

However, if the owner had opted for a pre-drafted template by-law without a consultation, they may potentially miss the opportunity for a better solution.

Template by-laws may not be adopted properly without guidance

“It’s important to emphasise once again that template by-laws are generally drafted without advice,” Sarah reiterated. “This also means they do not include advice on how to adopt them properly.”

Sarah shared that many owners may not realise that once a by-law has been voted for, it must be registered. The by-law and the rights or restrictions it entails won’t come into effect until it is registered correctly.

Also, template by-laws generally do not come with a motion to take it to the floor of an Annual General Meeting or Extraordinary General Meeting for a vote, which can be problematic. “The owners corporation needs to vote in favour of the motion, in order to adopt or amend a by-law. If the motion isn’t written correctly or is not included at all, owners may later find out that while they have resolved to approve works or other actions relating to the by-law in question, they may not have actually passed and registered the by-law that covers it,” Sarah explained.

The expert by-laws team at Kemps Petersons Legal offer a full by-law service to all customers who approach them for help with by-laws. They handle tailored by-laws, a clear motion to pass the by-laws, and the registration of the newly-adopted by-laws, so that their customers can rest easy knowing procedures will be followed and their new by-laws are watertight and effective.

The risk falls onto the owners corporation when template by-laws are adopted

One of the biggest dangers of template by-laws is that the risk falls onto the owners corporation that adopts them. If there is a problem with the template by-laws they adopt, the owners corporation is left to deal with the repercussions.

When it comes to tailored by-laws, however, the liability rests with the strata lawyers who drafted them. If you approach dedicated strata experts like the team at Kemps Peterson Legal for tailored by-laws, there is minimal risk involved for your owners corporation.

Sarah elaborated on this further. “We at Kemps Peterson Legal have professional liability to ensure that we represent customers to be best of their interests. That’s why we offer an initial consultation to learn about the by-law they require, determine whether a by-law is the right step for their situation, and take into consideration conditions our customers might want in their by-law. We evaluate the conditions and make sure the by-law isn’t harsh, unconscionable or oppressive. When drafting a by-law, we weigh the risks of it becoming contentious in the future. If we do find risk, we advise our customers of this and also provide alternative options.”

The above content does not constitute legal advice and should not be relied upon as such, and is for the purposes of general information only. You should seek independent legal advice in relation to any particular matters you may have.If you’d like to find out more on drafting by-laws or building rules for your strata property, download our FREE Community Living guide on by-laws and rules. Or for a consultation to review your current by-laws, our Kemps Petersons Legal team can assist, click here. To find out more about the services we offer, click here for a free strata assessment.