In order for an owners corporation to repeal an exclusive use by-law that confers on the owner of a lot, or the owners of several lots, certain rights or privileges to use a part of the common property, section 52 of the Strata Schemes Management Act 1996 (“SSMA”) requires the written consent of the owner(s) of the lot(s) concerned. In general, this means the written consent of the owners receiving the benefit of the common property in question.
Having said the above, the Strata Schemes Adjudicator has the power, under the SSMA, to repeal an exclusive use by-law if the lot owners concerned unreasonably refuse to consent to the repeal of the exclusive use by-law.
In Croyden & Anderson v The Owners – Strata Plan No. 1583 [2015] NSWCATCD 104 the NSW Civil and Administrative Tribunal overturned an Adjudicator’s earlier order and found that lot owners who had the exclusive use of common property car spaces pursuant to an exclusive use by-law were acting reasonably in refusing to provide their written consent to the Owners Corporation’s proposed repeal of the by-law.
Facts:
The Owners Corporation made Special By-Law 1 on 1 April 1991 which granted the owners of Lots 12 and 15 from time to time the exclusive use of 1 car space each, situated on the common property;
At an Annual General Meeting held on 10 September 2013, the Owners Corporation attempted to have Special By-Law 1 repealed. The owners of Lots 12 and 15 objected to the repeal and did not give their written consent to the Owners Corporation.
The Owners Corporation argued that it proposed to obtain revenue from the common property car spaces by either renting out or selling the car spaces. Since Lots 12 and 15 had never paid any money for the exclusive use of the car spaces, the Owners Corporation argued that the interests of all owners in the use and enjoyment of their lots and common property outweighed the rights and reasonable expectations of the lot owners deriving a benefit under Special By-Law 1.
The owners of Lots 12 and 15 argued that the Owners Corporation and all the owners in the building had the opportunity to, and did, make their decision in 1991 in relation to the conditions Special By-Law 1 would contain, and it was now too late for the Owners Corporation to change its mind. Furthermore, the repeal of Special By-Law 1 would have extinguished a valuable proprietary interest that Lots 12 and 15 had in the car spaces without any compensation to them.
Findings:
The Tribunal decided to uphold Special By-Law 1 and allow the lot owners’ appeal on the following basis:
- The fundamental and only real motive for the Owners Corporation to repeal Special By-Law 1 was to regain control of the common property car spaces and to obtain revenue, for which end purpose there had been no explanation given by the Owners Corporation.
- The Owners Corporation had the responsibility to manage and control the use of the common property, as well as the responsibility to manage the strata plan’s finances. However, there was no legal obligation on the Owners Corporation to rent out or sell the common property merely because it is or may become a valuable asset;
- The Tribunal agreed with the owners of Lots 12 and 15 that the Owners Corporation had its chance to make its decision regarding the conditions in Special By-Law 1 in 1991: it cannot have another ‘bite at the cherry’ now.
- There had been no material change in the circumstances, other than the Owners Corporation had simply changed its mind and now sought to rent or sell the car spaces for value.
- The exclusive use by-law created a proprietary interest that Lots 12 and 15 had in the car spaces, which enhanced the value and utility of their lots. The Tribunal should not lightly extinguish that proprietary right unless there were good reasons for doing so.
Lessons learned:
An exclusive use by-law can be hard, if not impossible, to repeal if an owners corporation does not have the written consent of the lot owner(s) with the benefit of the exclusive use by-law.
If owners corporations are concerned about making money from lot owners using various parts of the common property (for example, parking spaces), they should ensure the original exclusive use by-law incorporates a fee as a condition for the making of the by-law, and this requirement is expressly in place at the time the exclusive use by-law is made. It may be too late to repeal or amend the by-law later.
Furthermore, an owners corporation may wish to include a ‘sunset clause’ in the by-law, providing that the right of exclusive use will expire on a particular date. This would cater for any unforeseen circumstances arising many years down the track, where an owners corporation may decide it wishes to regain control over the relevant area of the common property.
My question is, would there be a good chance of repealing an exclusive use by law if the council’s original development approval to build our four units stipulated that we must have four visitor park spaces, and the exclusive use by law gave away one of those visitor parks on the common property.
The planning officer at our council said we
must have an approved modification order of our planning approval before we can make such a by
law allowing lot owner use if one of the visitor parks. Does that mean that the
exclusive use by law is not legal and can be revoked on that basis without lot owner consent.
Hi Caroline, yes in my view this is a good argument in favour of repeal.
My question is we had an exclusive use-bylaw granted whilst under “compulsory strata management – S237” – & now that it is out of compulsory strata management, the other lot owner wants compensation paid to the owners corporation ( its a 2 lot strata) for the exclusive use bylaw (verandah area 9m2 which was pre-existing). Are there grounds for such compensation given that the bylaw was already granted & registered 6 months ago under compulsory strata management ?
Hi Marc, there may be grounds for compensation and the Tribunal could order an amendment to the by-law to require this. The first step in that process is that a motion is put forward at a general meeting to amend the by-law (by special resolution) requiring the owner who benefits to pay some compensation. Even if the special resolution is achieved, it will have no effect unless the owner with the benefit provides their written consent. They are unlikely to do that. The matter can then be taken to the Tribunal for determination of the question “is the owner with the benefit unreasonably refusing to consent to this amendment?” Refusal may be reasonable or not, it depends on the circumstances.
Hi Amanda, I am the owner with the bylaw above, whilst it is now “exclusive use”, the area provides exclusive private access to 2 separate doors & 3 windows to our lot & the area is pre-existing. The bylaw was more for privacy than anything else. If the matter was to end up at NCAT, could the applicant request for a cost order if they were successful at NCAT ?
NCAT is a ‘no costs’ jurisdiction, so we start from a place where each party pays their own costs, regardless of success. The Tribunal does have the power to award costs in ‘special circumstances’. See section 60 of the Civil and Administrative Tribunal Act for an explanation of special circumstances.
My question is we had an exclusive use-bylaw granted to use a common area (a court yard) next to our villa and we paid the Strata 15000AUD (fifteen thousand dollars) for that exclusive use and we build a fence around that courtyard with the approval of the strata. Can this exclusive use be repealed? If yes under what circumstances.
My other question is: Can we add that by-law exclusive use to the title deed of the villa as I have paid for it?
Hi Samih, in NSW an exclusive use by-law can be repealed if the owners corporation has passed a special resolution AND obtained your written consent. It can also be repealed by order of the Tribunal. No, the exclusive use by-law cannot be added to the title for your lot.
Hi there, If I would like to buy an apartment and the contract says each owner has access to 250m square of a 1000m square block but only two owners have exclusive access to the garden and courtyard (thereby reducing the area the other two owners have access to to less than 250m square per person) is there grounds to repeal a bylaw, if it was made many years ago and not signed by all current owners?
Hi emma, that’s a complicated area and not a question I can answer within the confines of this platform. Feel free to reach out to my team via enquiries@lawyerschambers.com.au for specific legal advice.
Hi Amanda
There was a by law passed and registered in 2015 for exclusive use for landscaped areas of common property for one lot owner. They are required to maintain the common property at their own cost. The lot owner has amended the common property significantly, however, there appear to be no records of approvals for changes to common property- the owners claim they got approval, however, are refusing to provide any records they have and what records are available don’t back up many of their claims. the complicating factor is that our strata manager, whose recordkeeping is generally poor, has said they don’t have records as far back as that anymore. The strata manager has said there is no definition of what exact area of ‘common property’ they were given exclusive use for.
Other owners don’t agree to what has happened with the by law and the changes since – what are our options?
Hi Concerned,
If the by-law was passed and registered, there will be a copy of it on the common property title. That (should) explain the location and limits of the exclusive use.
Your next steps really depend on the wording in the by-law.
I’d be happy to continue workshopping this with you inside our members-only QandA forum. Your instant access is here: http://www.StrataMembership.com.
Amanda.
Hi
I own a unit which has exclusive use
Of a separate toilet and shower. I want the by law for this removed. Can strata do this themselves or do we have to use a solicitor as they have access to a special portal
Hi Chris,
Per Amanda’s advice, you will need to use an agent with access to the e-lodgement portal.
This is usually a solicitor.
I live in a block of 6 apartments, 1930. At some stage two apartments 1 & 2 were given exclusive use in a bi law of the courtyards. In addition unit 1, was given exclusive use of a 4th floor, ( would have originally being a 7th apartment 3/4 the size of unit 1, this making it a rather large apartment) Unit 1 only pays unit entitlement on the floor space of unit 1 82 sq metres, yet they have exclusive use of another 60sqmetres now joined by a stair case, plus the courtyard.
My research a few years ago, showed that when this was loged some 30 years ago, probably from company title to strata title ( unknown) this 7th apartment was only mentioned as a basement easement. In fact it is a replica of the apartments above: access thru the back of the property. It would have been a garden apartment.
Unit 1, some 140 square metres of which 60 sq m is exclusive use, plus a courtyard..pays less body corporate fees than units 3,4,5,6.
How is this legal and can this be changed.
Dear Sue,
I am sending this message on behalf of Amanda Farmer.
Due to the overwhelming demand for Amanda’s services, she is no longer able to personally respond to every comment posted on the public side of the website. The best way to seek Amanda’s guidance is either:
(a) inside the members-only QandA Forum, enjoyed by paying members of our online community. Membership is just $67/month with no lock-in. Your instant access is here: http://www.stratamembership.com, or
(b) engaging Amanda as your lawyer, via her legal practice Lawyers Chambers. Amanda’s hourly rate for one-on-one legal services is $750 incl. GST. You can make contact with Amanda’s practice to check her availability by emailing enquiries@lawyerschambers.com.au.
Richelle
YSP Support Team
The underground garage of our strata complex has a storeroom built on common property.
One owner (a strata committee member) uses the storeroom exclusively. The committee member has now placed a Motion on an upcoming AGM being a By-Law to grant exclusive use in perpetuity to themselves. No compensation to the Owners Corporation is proposed.
Some owners feel a fairer outcome would be to share the storeroom among all owners.
However it is likely that apathy etc will all this By-Law to be approved at AGM.
Can any owner seek to have the By-Law, if approved, overturned on the basis of fairness?
Dear PJ,
I am sending this message on behalf of Amanda Farmer.
Due to the overwhelming demand for Amanda’s services, she is no longer able to personally respond to every comment posted on the public side of the website. The best way to seek Amanda’s guidance is either:
(a) inside the members-only QandA Forum, enjoyed by paying members of our online community. Membership is just $67/month with no lock-in. Your instant access is here: http://www.stratamembership.com, or
(b) engaging Amanda as your lawyer, via her legal practice Lawyers Chambers. Amanda’s hourly rate for one-on-one legal services is $750 plus GST. You can make contact with Amanda’s practice to check her availability by emailing enquiries@lawyerschambers.com.au.
Richelle
YSP Support Team
Hi Amanda,
Our Owners Corporation granted an exclusive use special bylaw, for a low ground room, to a pizza shop at the property in February 2016 and then the pizza shop divided the lot into two lots and sold one of the two lots to a physiotherapist. The pizza shop owners asked for an Extraordinary General meeting for the OC to approve the division (new strata plan) and to repeal and amend the special bylaw for the exclusive use to be only for the new pizza shop lot. Unfortunately, in both General meetings, the owners, without knowing the consequences, approved the special bylaws.
Is it possible to put a motion in the coming AGM to amend the special bylaw to include a clause that requires the pizza shop, as a commercial user of the space, to pay rent to the OC? And what are the chances for this to succeed without the permission of the pizza shop owners? Thank you
Hi S Tadros,
I am sending this message on behalf of Amanda Farmer.
Due to the overwhelming demand for Amanda’s services, she is no longer able to personally respond to every comment posted on the public side of the website.
The best way to seek Amanda’s guidance is either:
(a) inside the members-only QandA Forum, enjoyed by paying members of our online community. Membership is just $67/month with no lock-in. Your instant access is here: http://www.stratamembership.com; or
(b) engaging Amanda as your lawyer, via her legal practice Lawyers Chambers. Amanda’s hourly rate for one-on-one legal services is $750 plus GST. You can make contact with Amanda’s practice to check her availability by emailing enquiries@lawyerschambers.com.au.
Mina
YSP Support Team
Hi Amanda,
I have an exclusive usage garage with a garage door to the space. The annexed bylaw plan showing the parking space but has no measurements and simply shows the building outline with a space marked and the number of my unit on the plan.
Can I assume the area showing the boundary lines shown on the plan are what I can use?
Hi Charles,
I am sending this message on behalf of Amanda Farmer.
This isn’t a question Amanda can answer without seeing the terms of the by-law and the plan annexed.
The best way to seek Amanda’s guidance is either:
(a) inside the members-only QandA Forum, enjoyed by paying members of our online community. Membership is just $79/month with no lock-in. Your instant access is here: http://www.stratamembership.com; or
(b) engaging Amanda as your lawyer, via her legal practice Lawyers Chambers. Amanda’s hourly rate for one-on-one legal services is $750 plus GST. You can make contact with Amanda’s practice to check her availability by emailing enquiries@lawyerschambers.com.au.
Mina
YSP Support Team