The ins and outs of owners corporation rules to manage your property

 

The ins and outs of owners corporation rules to manage your property

The rules of an owners corporation exist to help regulate the rights of residents in owners corporation properties. These are called by-laws in most other states and rules in Victoria. Rules cover day-to-day issues that arise in community living, such as where people can park, who can keep pets, and what level of noise is acceptable.

 

Types of rules

Rules for a property typically originates from two sources: an owners corporation may have chosen to use the model rules set out in the Owners Corporation Regulations 2018, or they may have adopted their own rules.

Model rules
In Victoria, the model rules for an owners corporation are set out in the Owners Corporation Regulations 2018.

If an owners corporation does not make a rule on a subject covered by the model rules, the model rule automatically applies. So generally, most owner corporation rules are a mixture of owners corporation-drafted rules and model rules.

Building rules created by an owners corporation
An owners corporation may also choose to create their own additional rules at their first meeting or subsequent meetings with the support of 75 percent of unit owners.

Rules created specifically for your building or common property cannot be discriminated against an owner or tenant, and cannot be inconsistent with the Owners Corporation Act, the regulations under the Act, or any other laws. The rules of an owners corporation are binding on the owners corporation, owners, lessee or sub-lessees and occupiers of a lot.

Types of powers

Power to make rules
An owners corporation can make a rule or revoke a rule by a special resolution of the owners corporation.

As set out in section 138 of the Owners Corporation Act, a rule must be for purpose of the control, management, administration, use or enjoyment of the common property or a lot.

Power to amend rules
If an owners corporation makes or amends rules, it must lodge a copy with the Registrar and certify them with the secretary of the owners corporation. Rules come into effect when specified or on the day of the Registrar records them and given to all lot owners as soon as practicable after lodgement.

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Did you know

For a rule to be amended, deleted or a new rule adopted, the changes must be approved by way of a special resolution (the support of 75 per cent of unit owners) at a meeting.

10 items that an owners corporation can make rules on:

  1. Health, safety and security
  2. Use of common property
  3. Repairs and maintenance of a lot
  4. Management and administration
  5. Behaviour of persons
  6. Vehicles and parking
  7. Committees and sub-committees
  8. Dispute resolution
  9. Notices and documents
  10. The common seal

 

1. Health, safety and security
An owners corporation can make rules about the health, safety and security of owners, residents and guests. For example, an owners corporation property situated close to a river may make certain rules about what building entry/exit must be used in the event of floodwater rising or they may make a rule about not leaving the building by a vehicle when flood levels reach a certain point. This is to ensure the safety of building occupants and safeguard the property.

 

2. Use of common property
An owners corporation can make rules about the use of common property including the care of lawns & gardens, damage to common property, moving furniture through common property and the design, construction and appearance of common property. For example, an owners corporation may have rules in place about the use of awnings on balconies that are deemed inconsistent with the appearance of the building.

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What is common property?

Common property usually includes the external walls, the slab dividing the lots, foyers, driveways, landscaped areas, plant and equipment on common property, the building’s roof, garage, plumbing, windows & doors on common property, facilities such as laundry, BBQ area, gym or pool.

3. Repairs and maintenance of a lot
An owners corporation can make rules about the use of lots and works to lots. For example, the rules could govern changes in the use of a lot from residential to commercial use. Rules governing works to a lot include maintenance of security systems, smoke alarms, air conditioners, restrictions on floor coverings, or a requirement to clean exterior windows and doors of lots.An owners corporation can also make rules about the design, construction and landscaping of lot exteriors, place restrictions of blinds & window coverings, or on paint colour or finish of lot exterior. Rules may require an owner to obtain permission before making alterations to the building structure, exterior, stairs, balconies, chimneys, doors, windows, skylights, fences, and railings – which influences common property.

 

4. Management and administration
An owners corporation can make rules about the use and fees for use of common property facilities such as pools, BBQ areas or gyms. They may also make rules on the use of skateboards, bicycles, rollerblades, or personal equipment on common property. And the care and appearance of common property such as drying of laundry on balconies, littering, and advertising on common property.

 

5. Behaviour of persons
An owners corporation can make rules about the behaviour of owners, occupiers and guests on common property that would be illegal or cause a nuisance or be a hazard to anyone else. Common rules governing the behaviour of persons include the restriction of musical instruments during certain hours, noise from mechanical installation or appliance, or engine that is likely to cause noise or vibration, or social gatherings that may cause a nuisance to other occupiers.

 

6. Vehicles and parking
An owners corporation can make rules about parking, the use of car parks and car ports and vehicle speed on common property. A common rule in relation to parking is restricting owners and occupiers from dismantling, assembling, repairing, restoring, or cleaning any vehicle on common property.

 

7. Committees and sub-committees
An owners corporation may also set rules on establishing a sub-committee and its responsibilities, reporting & communication requirements. Examples of sub-committees that are often set up include a by-law and rule review committee, or renovations and building upgrade committee.

 

8. Dispute resolution
An owners corporation may develop its own rules for handling grievances – these must be recorded at Land Victoria and must not conflict with any other Acts, regulations, or natural justice. If an owners corporation does not have an internal grievance procedure to handle complaints about breaches of the rules and other disputes, then the model rules apply. This process must be followed before going to Consumer Affairs Victoria or VCAT.

 

9. Notices and documents
An owners corporation may make rules about notices and documents. An example could include requiring all lot owners to provide an Australian address for the service of notices, failing which, notices and documents will be deemed to be served once delivered to the lot address.

 

10. The common seal
An owners corporation may make rules to authorise the use of the common seal – which acts a legal equivalent of a personal signature, such as granting authority of the common seal to your manager. Any rule must be in line with the Owners Corporation Act.

 

Enforcing owners corporation rules

People who fail to obey rules sometimes simply do not know the rules so an owners corporation should ensure that all new residents, whether owners or occupiers, get a copy of the rules. The owners corporation must have an internal dispute resolution process to handle complaints about breaches of the rules.

The process should set out:

  • Who to contact if there is a problem or complaint
  • Rules detailing the grievance procedure
  • Directions about where to get information
  • How to record the problem or the breach of rules
  • How to notify your owners corporation committee or manager of a problem or complaint
  • How to raise an issue at an owners corporation or committee meeting
  • Formal complaint procedures
  • How to nominate a third party to help resolve a dispute.

The internal dispute process should be followed before seeking dispute resolution assistance from the Dispute Settlement Centre of Victoria (DSCV), or before applying to the Victorian Civil and Administrative Tribunal (VCAT).

If you’d like to find out more on managing by-laws for your strata property, download our FREE Community Living guide on by-laws and rules. Or for a consultation to review your by-laws by our Kemps Petersons Legal team, click here.


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