Who has the power to change or create a by-law?
Most by-laws or rules can be changed or created by special resolution (75% majority vote) passed at a duly convened general meeting of the owners corporation. All lot owners have the power to suggest or recommend changes and additions to the initial by-laws or rules by submitting them as a motion to be voted on in any general meeting.
What preparation work should I be doing?
Before starting your work to change or add by-laws, it’s a good idea to check on the level of owner support there is for the proposed changes you are recommending for the property. To ensure your proposal is put on the agenda of the next meeting, you should email or mail the statement of intent to the secretary of the committee four to six weeks before the next general meeting.
It’s worthwhile attending the AGM to present your by-law. When doing so, listen to any concerns that are presented, and try your best to answer them. If your proposal will require work to be carried out on common property (i.e. solar panels) that will impact one or more individual lots, a common property rights by-law will be needed. If you aren’t successful at your first try, consider if it’s possible to reword the by-law or rule addressing other owner’s concerns, and attempt to get the revised by-law passed at the next meeting.
Does approval differ state to state?
In New South Wales
By-laws can be changed by owners corporation approval at an annual general meeting (AGM) or an extraordinary general meeting. Owners can put forth a motion with a proposed new by-law in the agenda of the meeting. A special resolution is required to pass the proposed by-law – this means that it has no more than 25 per cent of votes cast against it.
Your committee must ensure to get the newly drafted by-laws registered with the New South Wales Office of the Registrar General within six months of drafting them. A change to the by-laws of a strata scheme has no effect until the owners corporation has lodged a notification with the Registrar-General.
The bodies corporate may change their by-laws by passing a motion by special resolution at a general meeting to record a new community management statement that includes changes to the by-laws. This must be registered with the Titles Registry Office within three months of passing the motion to change the by-laws.
The owners may propose new rules to be adopted in a special resolution and secure at least 75 per cent of votes in favour of the new rules. They are approved after a copy of the consolidated rules is lodged with Land Use Victoria.
Common property rights by-law
A common property rights by-law is a by-law that confers on the owner or owners of a specified lot or lots in the strata scheme, a right of exclusive use and enjoyment of the whole or any specified part of the common property, or special privileges in respect of the whole or any specified part of the common property.
A common property rights by-law needs a special resolution to pass, as well as written consent of each owner on whom the by-law confers rights or special privileges. It must also detail the responsibility for maintenance and upkeep of the relevant common property.
Limitations on by-laws
The creation of by-laws or rules are subject to restrictions. A by-law cannot:
- Be inconsistent with strata legislation or any other state or federal law, or
- Be unjust, harsh, unconscionable or oppressive, or
- Cannot restrict the type of residential use, or
- Cannot prevent or restrict a transmission, transfer, mortgage or other dealing with a lot, and
- Must not discriminate between types of occupiers.
I’m not a lawyer – how should my by-law be worded?
The wording of the by-law is critical as it can have huge legal consequences. We strongly advise to have a specialist strata lawyer draft up any new by-laws/rules or make the necessary amendments to existing ones.
PICA Group’s top tips on how to get a by-law or rule inserted, repealed or amended:
Write a brief explanation outlining the purpose and intent of your proposed by-law/rule change and circulate it to owners for an indication of support.
If there is strong support for the change, then you may wish to engage a strata lawyer to draft the by-law and explanatory note to get it as a motion onto the agenda of the next AGM.
Note: In NSW, there is a requirement for an owner, or person entitled to vote, who submits a motion to also provide an explanatory note.
Submit your motion to the committee at least 4 week prior, for inclusion onto the agenda of the next AGM.
Get your proposed motion approved by majority vote at the AGM.
Ensure that the strata managing agent registers the approved by-law with your state’s land registry office.
If you’d like to find out more on how to deal with common strata problems for your strata property, download our FREE Community Living guide on by-laws. Or for a consultation to review your by-laws by our Kemps Petersons Legal team, click here.