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Tony, Michael and David Partners at ABKJ
ABKJ Lawyers

When Did You Last Review Your Scheme’s Bylaws?

Whilst perhaps not the most exciting topic to most people, body corporate committees need to actively review their bylaws from time to time. The bylaws are one of a community title scheme’s most important elements.

For most schemes, the bylaws are those provisions that appear in schedule C of the scheme’s registered community management statement (“CMS”). If your scheme does not have any bylaws in its CMS, then in most cases the bylaws will be the standard bylaws contained in Schedule 3 of the Body Corporate and Community Management Act.

Owners & Occupiers

Bylaws provide for the management of the common property, and the regulation of the use and enjoyment of lots and common properly, among other things.

They are binding on the body corporate, owners and occupiers in the scheme, in essence as if each of those parties had signed a contract agreeing to comply with the bylaws.

From an owner’s or an occupier’s perspective, they are important as they are the rules which owners and occupiers must abide by if they wish to live in the scheme. Owners and occupiers should familiarise themselves with a scheme’s bylaws before choosing to live at a particular scheme.

Body corporates

From the body corporate’s perspective, bylaws are important as they provide the basis of regulation. If the body corporate wishes to regulate a particular issue, it does so through the bylaws. Broadly speaking, a body corporate cannot enforce rules created by the committee (often called “house rules”) or an individual on the committee – regulation can only come from a registered and valid bylaw.

Unless a committee can refer to a relevant, valid bylaw to support an action against an owner or occupier who in the committee’s eyes is not behaving appropriately, the action will be doomed to failure. A person not behaving appropriately could for example be someone who’s keeping a pet without permission, parking on common property, undertaking unauthorised works, engaging in antisocial behaviour and so on.

The legislation does place some limitations upon what the bylaws can do. For example:

  • A bylaw can only regulate normal domestic activities; broadly speaking, it cannot prohibit such an activity. For example, a bylaw that seeks to prohibit the keeping of all types of animals as pets would not be valid.
  • If a lot may lawfully be used for residential purposes, the bylaws cannot restrict the type of residential use. That means a bylaw cannot itself directly prohibit an owner from letting out a lot using AirBnb in a residential scheme. Although there are some strategies that committees wishing to regulate short term letting at a scheme can adopt, an outright prohibition on the use of Air Bnb certainly does not work.
  • A bylaw cannot discriminate between different types of occupiers. For example, a bylaw that restricted the use of a common property pool to owners (as distinct from tenants) would not be valid.
  • A bylaw (other than an exclusive use bylaw) cannot impose a monetary liability on an owner of occupier. That means that a provision requiring an owner to forfeit a bond for renovation works is invalid. Similarly, a bylaw that requires an owner or occupier to pay to the body corporate a stated amount for repairs or cleaning costs is also invalid.
  • A bylaw must not be oppressive or unreasonable, having regard to the interest of all owners and occupiers in the scheme.

It is important that committees ensure they have up to date, best practice bylaws, as the bylaws themselves are the basis of any enforcement action taken by the body corporate to regulate the behaviour of owners and occupiers. The mere fact that a bylaw is registered does not make it valid.

As bylaws can only be changed by a resolution of the body corporate in general meeting, we recommend committees review their bylaws annually, around the time of the budget meeting.

Contact

At ABKJ we come across many schemes that are burdened with obsolete bylaws, and can assist in tailoring new bylaws having regard to a particular scheme’s needs and wishes.

If you would like a no obligation fee estimate to review and update your scheme’s bylaws, please contact Andrew Kyle at ABKJ Lawyers by email at ak@abkj.com.au or call our Gold Coast office on 07 5532 3199.

For further help, read our articles on Property Law