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What Can an Owners Corporation do if an Owner or Occupier Breaches the By-Laws of the Scheme?


16 Dec 2022

What Can an Owners Corporation do if an Owner or Occupier Breaches the By-Laws of the Scheme?

The by-laws for a strata scheme are binding upon the owners corporation, owners and occupiers. If an owner or occupier breaches any of the strata scheme’s by-laws, the owners corporation can take steps to enforce those by-laws.

Before commencing proceedings, we recommend the owners corporation first write to the owner or occupier to advise them of the breach and ask that it stop. A copy of the by-law should be included with the letter. If the person in breach is a tenant, the letter should be sent to both the owner and the tenant (as the occupier).

Penalty orders

If the owner or occupier continues to breach the by-laws, the owners corporation may make an application to the NSW Civil and Administrative Tribunal (NCAT) for a penalty order. The process is summarised as follows:

 

  1. The owners corporation should give a notice the owner or occupier, requiring them to comply with the by-laws pursuant to section 146 of the Strata Schemes Management Act 2015 (SSMA 2015). The notice must include a copy of the by-law in question. A separate notice should be issued for each by-law that is breached. The Notice must be in the required form. It can be downloaded from here.

  2. The notice cannot be given without a resolution being passed at a general meeting of the owners corporation or without an ordinary resolution of the strata committee. It should be issued by the strata committee unless the responsibility for issuing notices has been delegated to the strata managing agent.

  3. If the owner or occupier breaches the by-law again after a notice has been given, the owners corporation can (after a resolution to do so has been passed either at general meeting or at a strata committee meeting) apply to NCAT for a penalty order under section 147 of the SSMA 2015. This must be done within 12 months of the notice. If NCAT is satisfied that the notice was validly given and the owner or occupier has breached the by-law since the notice was given, NCAT may order that a monetary penalty of up to 10 penalty units (currently $1,100.00) be payable to the owners corporation.

  4. If, within 12 months of the monetary penalty being imposed, the owner or occupier breaches the same by-law again, the owners corporation may apply to NCAT for a further penalty order. A further notice need not be issued. If NCAT is satisfied that the owner or occupier has breached the by-law, NCAT may order that a monetary penalty of up to 20 penalty units (currently $2,200.00) be payable to the Owners Corporation.

    In dealing with a contravention of an occupancy limit by-law, NCAT may impose a monetary penalty of up to 50 penalty units under section 147(1) and a monetary penalty of up to 100 penalty units under subsection 147(2).

    An order that the owner or occupier comply with the by-laws

    Alternatively, the owners corporation may apply to NCAT for an order under section 232 of the SSMA 2015 that the owner or occupier comply with the by-laws. This falls under the general power of NCAT to settle a dispute or complaint about issues including the operation, administration or management of a strata scheme. The parties will have to attempt mediation before an application is made to NCAT.

    Ideally, an owners corporation, owners and occupiers should work together to resolve disputes amicably without needing to go to NCAT. This will not only save time and money, but also preserve harmony in the strata scheme.

    This is general information and should not be considered to be legal advice. You should obtain legal advice specific to your individual situation.

    Authors: Jasmin H.Singh & Allison Benson