Many professionals, including strata managers, are still working from home due to the COVID-19’s restrictions. But how does this affect the management of the strata schemes and the holding of general meetings in particular? Strata lot owners may be concerned that due to the restrictions imposed by COVID-19, the Owners Corporations may not be able […]

Many professionals, including strata managers, are still working from home due to the COVID-19’s restrictions. But how does this affect the management of the strata schemes and the holding of general meetings in particular?
Strata lot owners may be concerned that due to the restrictions imposed by COVID-19, the Owners Corporations may not be able to hold their annual general meetings, with potentially serious implications including the owners not being able to set budgets, raise contributions, approve quotes for essential maintenance works, or pass special by-laws to approve lot renovations within the strata scheme.
However, regulation 14 of the Strata Schemes Management Regulation 2016 already provides for alternative means of voting. It states:
“14. Other means of voting—owners corporation and strata committee
(1)  An owners corporation or strata committee may, by resolution, adopt any of the following means of voting on a matter to be determined by the corporation or committee—
(a)  voting by means of teleconference, video-conferencing, email or other electronic means while participating in a meeting from a remote location,
(b)  voting by means of email or other electronic means before the meeting at which the matter (not being an election) is to be determined by the corporation or committee (pre-meeting electronic voting).”
Essentially, the owners corporation may elect to hold a general meeting or a strata committee meeting electronically, provided that the owners corporation or strata committee have previously agreed by resolution to adopt electronic communication methods (for a strata committee, this can be done at a paper meeting), as set out in clause 10, Schedule 2 of the Strata Schemes Management Act 2015. For an owners corporation we recommend that an extraordinary general meeting be called that has a motion to accept the previous meeting’s minutes and a motion to authorise electronic voting. Your strata manager, if they are given a proxy for the meeting, can then wait 30 minutes after the scheduled meeting time when quorum requirements are relaxed and then, use the proxy to vote in favour of electronic meetings.
While some strata schemes may not be prepared to make a full transition from meetings in person to electronic meetings, the current climate offers the perfect occasion to consider introducing alternative ways of holding the general meetings in extraordinary situations such as a pandemic or to simply allow owners living overseas or otherwise incapable of attending the meetings in person, to participate without the use of proxies.
If your strata scheme’s general meeting is due soon and you are concerned it may not be held in person due to the current restrictions, we suggest that you get in contact with your strata manger to discuss alternative options to hold the meeting in compliance with the act. Platforms that may assist you in holding a video conference meeting include Zoom, Skype, Microsoft Teams and Google Hangouts.
We have participated in video conferences with up to 50 lot owners at recent general meetings and have found that a mixture of video and phone conferencing using the one software provider has been very effective.
Article authors: MA and AB.

Want to do work or have already done work to your lot and need a by-law? We recommend ensuring your by-law contains sufficient information for the Owners Corporation to be fully informed about your works and also include clauses that sufficiently protect the interests of the Owners Corporation. Generally, a by-law should include the following:

A detailed definition of the works being done. If available, plans of the works should be annexed to the by-law or at least to the meeting minutes at which the by-law was passed.
If structural work is being carried out, then a structural engineer’s report should be provided confirming that the structural works will not affect the structural integrity of the building.
State what documents and information will be provided to the Owners Corporation prior to commencing the works and once they are complete – for eg Council approval, engineers report, contractors information and insurances.
State the conditions the lot owner and their contractors must comply with in carrying out the works – for example, the works should comply with relevant standards, be completed within a certain time, be conducted during specified hours, and for the lot owner to promptly rectify any damage caused by carrying out the works.
State who will be responsible for the repair and maintenance of the works and the common property affected by the works – this is also a requirement under section 144 of the Strata Schemes Management Act 2015.
State that the lot owner will indemnify the Owners Corporation for any loss or damage caused by the works.
State that the Owners Corporation has a right to remedy any default of the lot owner and recover its costs from the lot owner.

Once the by-law has been drafted, it is worthwhile to forward it to the strata manager and strata committee to get feedback on any further terms they may require before the by-law is presented to the Owners Corporation for approval. This will increase the likelihood of the by-law being passed the first time it is presented to the Owners Corporation.
You should also ensure that you provide to the strata manager your written consent to the by-law prior to the by-law being passed. This is a requirement under section 143 of the Strata Schemes Management Act 2015.
A lot owner who follows the steps outlined above will find their Owners Corporation more agreeable to passing their by-law. This is because the by-law will be comprehensive and will address any issues the Owners Corporation may have about the works.
Article authors: JHS and AB.

Unauthorised works are works to common property that are not cosmetic works, as defined by section 109 of Strata Schemes Management Act 2015, and that a lot owner has undertaken without consent of the owners corporation. Minor renovations, which are defined by section 110 of the Act, require authorisation by a general resolution of the owners corporation (or the strata committee if a minor renovation by-law is registered). Works that are not defined as minor renovations and require authorisation by special resolution of the owners corporation are works that involve adding to, altering or erecting a new structure on common property, and include structural works, works that change the external appearance of the lot, and works that involve waterproofing.
Owners corporations and lot owners record their agreement to allow a lot owner to do works to the common property by specially resolving to make and register a common property rights by-law. The by-law stipulates the terms and conditions on which a lot owner can carry out the works. By-laws are only enforceable once registered, so it is preferable to obtain approval by way of a registered by-law prior to works being carried out.
What about works that have gone on where no authorisation was sought? There are options:

If the owners corporation is aware that unauthorised works have been carried out, they may require the lot owner to provide them with a full scope of works, plans, drawings, structural reports, warranties, insurances for the contractors and a draft common property rights by-law granting retrospective approval to the lot owner which will need to be considered at a general meeting. The lot owner will also have to provide their written consent to the making of the by-law. If the owners corporation is satisfied with the works and the by-law, the owners corporation will specially resolve to make the by-law and once registered, the works will be authorised. This is a relatively quick and cost effective way to authorise works.
If the owners corporation knows the extent of the works and they wish to allow them but the lot owner refuses to make a by-law or provide their written consent to the making of a by-law, the owners corporation can propose a common property rights by-law. Provided that the terms are reasonable, even if the lot owner refuses to provide their consent to the by-law, the owners corporation can apply to the NSW Civil and Administrative Tribunal for order that the by-law be made.
As it is the owners corporation’s duty to repair and maintain the common property, they may demand that the lot owner return the common property to its original condition. Failing compliance, the owners corporation may seek orders from the Tribunal to enter the lot to carry out works to restore the common property and then seek the costs of doing so from the lot owner.

We note that any action in the Tribunal for the above will require mediation with Fair Trading before a Tribunal application is accepted.
Kerin Benson Lawyers drafts common property rights by-laws, including retrospective by-laws, for $600.00. We also act for owners corporations and lot owners in the Tribunal and at Fair Trading in relation to unauthorised works. If you have a question on the above or would like a costs agreement, please contact us.
Article authors: GL and AB.

If you’ve been spending more time at home due to COVID-19 restrictions, you may have come to realise that you would like to carry out some works to your lot. Once you’ve obtained a by-law to authorise the works, you will need to have it passed by the owners corporation, requiring either an Annual General Meeting (AGM) or an Extraordinary General Meeting (EGM) to be called.
Who can call a meeting?
Section 19 of the Strata Schemes Management Act 2015 (SSMA) outlines that a general meeting can be convened by the secretary or the strata committee of an owners corporation. Generally, your strata committee will be happy to call a meeting provided that you agree to pay the costs involved such as postage for meeting notices and charges for your strata manager to attend.
A meeting must also be convened by the owners corporation, not later than 14 days after receipt of a qualified request, even if the first AGM has not yet been held.
What is a qualified request?
A ‘qualified request’ for the purposes of s19 of the SSMA, is a request made by one or more owners within the strata scheme, having a total unit entitlement of at least one-quarter of the aggregate unit entitlements. The effect of this section is that should you hold or obtain the support of lot owners with 25% unit entitlements of the scheme and have them sign a written request requiring that a general meeting be held.
Considerations during the COVID-19 restrictions.
It is important to be aware that the current restrictions and limitations in place with regard to physical gatherings will impact the way that a meeting is held and as such you should consider your scheme’s position in relation to alternative forms of meetings. We have also written an article to explore and explain this further which can be found here.
In summary, if you have a by-law or a motion you would like to take to a vote and a meeting is not currently scheduled, you may ask the secretary or strata committee to call for one, or you can utilise your unit entitlements or gather the support of other owners to obtain the necessary 25% and make a qualified request, requiring a meeting to be convened no later than 14 days following the request being made.
If you have any questions relating to the process of calling a meeting or would like to take the first step in undertaking works to your lot and discuss obtaining a by-law, please contact us.
Article authors: ZS and AB.

Due to the COVID-19 emergency and to its financial impact on the global economy, a growing number of strata schemes are considering reducing the level of levies to be raised for their administrative and capital works funds.
However, it is important to note that strict procedures are set out in the Strata Schemes Management Act 2015 to determine the amount of levies payable by a strata scheme each year.
Below, is a list of the key sections of the Act that each strata scheme should comply with when setting their levy contributions or when considering a levy reduction.
Section 81
Owners corporation to set contributions to administrative and capital works funds
(1)  The owners corporation must determine the amounts to be levied as a contribution to the administrative fund and the capital works fund to raise the amounts estimated as needing to be credited to those funds.
(2)  That determination must be made at the same meeting at which those estimated amounts are determined.
(3)  The owners corporation must levy on each person liable for it such a contribution.
(4)  If the owners corporation is subsequently faced with other expenses it cannot at once meet from either fund, it must levy on each owner of a lot in the strata scheme a contribution to the administrative fund or capital works fund, determined at a general meeting of the owners corporation, in order to meet the expenses.
(5)  A contribution is, if an owners corporation so determines, payable by the regular periodic instalments specified in the determination setting the amount of the contribution.
This provision requires that each owners corporation determines the amount of levies (including special levies) for both the administrative and the capital works funds at a general meeting. The determination will apply to each owner and will specify the amount of the contributions, as well as the dates on which the instalments will be due over the year.
Section 83
Levying of contributions
(1)  An owners corporation levies a contribution required to be paid to the administrative fund or capital works fund by an owner of a lot by giving the owner written notice of the contribution payable.
(2)  Contributions levied by an owners corporation must be levied in respect of each lot and are payable (subject to this section and section 82) by the owners in shares proportional to the unit entitlements of their respective lots.
(3)  Any contribution levied by an owners corporation becomes due and payable to the owners corporation on the date set out in the notice of the contribution. The date must be at least 30 days after the notice is given.
…
This section provides that each owner shall receive written notice of the contributions payable for the administrative and capital works fund plan, that such contributions are based on the lot’s unit entitlements and that the notice should include the contribution due date. However, the owners should be given at least 30 days to pay their levies after the notice is given.
Section 84
Liability of persons other than owners for contributions
(1)  If, at the time a person becomes the owner of a lot, another person is liable to pay a contribution in respect of the lot, the owner is jointly and severally liable with the other person for the payment of the contribution and any interest on the contribution.
…
This provision clarifies that if a levy payment is due when purchasing a property, the new owner will be responsible together with the other person (the seller, for example) to pay that contribution.
Sections 81, 83 and 84 above mean that should an owners corporation wish to reduce the amount of levies as set at the last general meeting, it will only be able to do so by ordinary resolution at a new general meeting. In order to comply with the Act, the motion will have to determine the (revised) amounts to be raised, as well as the dates by which the owners shall pay their contributions. Each owner shall receive a new notice detailing the amounts and due date of each instalment.
If you are concerned with the current level of your levies, we encourage you to get in contact with your strata manager. They will be able to guide you through the procedures required to possibly reduce the levy contributions in compliance with the Act.
Article authors: MA and AB

Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 which came into effect on 31 March 2020 restricts people from leaving their place of residence without reasonable excuse.  Reasonable excuses include to travel for work, but only where this cannot be done at home. As a result of this, many offices have shut and set up their employees to work remotely.
One of the many questions that is, or will soon be, on the minds of owners corporations and strata managing agents is how documents or agreements will be signed during the COVID-19 pandemic in light of the above order.
Signing documents requiring the seal of the Owners Corporation
Section 273 of the Strata Schemes Management Act 2015 (the Act) provides for the circumstances in which the seal of the owners corporation can be affixed to any instrument or document.
It is standard practice for an owners corporation’s seal to be held in safe custody at the offices of their strata managing agent. However, with most offices being shut and strata managers working remotely, they would not have instant access to the seal.
The Electronic Transactions Act 2000 provides that an agreement may be made by way of electronic communication and provides that if a person consents to a method of electronic signature and intends that signature to be their consent to the agreement then it will be as binding as a signature in writing. If a signature of a person is required under a relevant law, section 9 of the Electronic Transactions Act 2000 provides the circumstances in which the requirement is taken to have been met in relation to an electronic communication. These circumstances are when:

a method is used to identify the person and to indicate the person’s intention in respect of the information communicated, and
the method used was either—

as reliable as appropriate for the purpose for which the electronic communication was generated or communicated, in the light of all the circumstances, including any relevant agreement, or
proven in fact to have fulfilled the functions described in paragraph (a), by itself or together with further evidence, and

c) the person to whom the signature is required to be given consents to that requirement being met by way of the use of the method mentioned in paragraph (a).

Amendments have recently been made to the Electronic Transactions Act 2000 by the COVID-19 Legislation Amendment (Emergency Measures) Bill 2020 that may eventually assist owners corporations. Section 17 of the Electronic Transactions Act 2000 provides that a regulation may be made to alter arrangements for the signature or witnessing of documents. This amendment makes it possible for a regulation to be made to allow the affixing of the seal of an owners corporation by electronic means. However, there has been no change made to the Strata Schemes Management Regulation 2016 to date.
Until a regulation is made, strata managing agents will need to establish practices to enable their strata managers (perhaps once a week) to access the offices to use the seal of an owners corporation as required and witness it being affixed pursuant to section 273(2)(b) of the Act.
Where a scheme does not have a strata manager or where the document being executed is an agreement to appoint a new strata managing agent (or a strata managing agent without a current strata management agreement), then arrangements need to be made for two relevant members of the owners corporation to witness the affixation of the seal as provided under section 273(2)(a) of the Act. This could quite easily be arranged between the two relevant members where a scheme does not have a strata manager.
Where the seal is being held by the strata managing agent, this could be done by the strata manager and the two relevant members meeting at the offices of the strata managing agent by appointment to enable the strata manager to ensure a safe environment. If sufficient room is not available in the strata manager’s office it may mean the strata manager standing inside the office and the two members standing outside with the strata manager affixing the seal to the agreement in the presence of the two members and then slipping it under the doors for them to sign and hand back.
Documents not requiring the seal of the Owners Corporation
In the case of documents that do not require the seal of the owners corporation, the strata manager will be able to sign this on behalf of the owners corporation if this power has been delegated to them under the strata managing agreement. Examples of documents that do not need the seal of the owners corporation include:

letters sent by the strata manager on behalf of the owners corporation,
breach of by-laws notices,
applications to the NSW Civil and Administrative Tribunal in respect of strata disputes and
documents or work orders to engage appropriately qualified tradespersons to repair and maintain common property within expenditure limitations.

 
The Strata Manager can take advantage of the Electronic Transactions Act 2000 to sign these documents electronically.
Article authors: JHS and AB

This article is an update on an article written by Allison Benson on short-term letting on 2 April 2020.
Code of conduct shelved
On 3 April 2020 in an unusual move, NSW Government has passed legislation to repeal the in-coming changes to the Fair Trading Regulation 2019 that would have implemented a code of conduct for owners who let their homes for short-term stays. The 3 April decision has not repealed legislation to make changes to the Fair Trading Act 1987 which creates definitions for short-term letting and has not repealed the changes to the Strata Schemes Management Act 2015 that allows owners corporations to pass by-laws to prohibit short-term letting if the lot is not the principal place of residence of the owner or occupier. Both of these changes will still commence on 10 April 2020.
What does this mean?
It means that owners corporation’s will still be able to put in place by-laws to prohibit short-term letting if the lot is not the principal place of residence. It also means that any breach of that by-law will be able to be enforced by the owners corporation by issuing breach of by-law notice and making an application to NSW Civil and Administrative Tribunal for enforcement and fines as provided for under the Strata Schemes Management Act 2015. To this end, owners corporations maintain a degree of power. However, the repeal of the code has substantially hollowed out the regulation of short-term letting under the Fair Trading Act since a breach of the code would have been an offence which was the regulative and deterrent mechanism government and other parties were reliant on. Without the code, there is no offence. And without the code, short-term letting continues (as it was prior to the proposed changes) without specific regulation under the Fair Trading Act.
Short-term letting during Covid-19 – an update for week beginning 6 April 2020
Government directives have clearly stated that people should not be outside of their homes for other than essential reasons, these include for work and education if it cannot be done at home, caring for others, exercise and shopping for essential items. However, for some people, staying away from their home may be essential for instance if due to the current crisis employees need to move to another location temporarily to be able to continue to work. This could happen if they are in a poor internet reception area and they need to have reliable internet to be able to telecommute or, if they are emergency workers needed at another location. We also note there are likely to be a number of tourists and nationals stranded and in need of accommodation because of border closes. It is reported that NSW Minister for Better Regulation, Kevin Anderson said there would be no ban on accommodation letting and, whilst it is not entirely clear, in statements made last week, the need for essential workers to stay away from their homes may have prompted the repeal of the Fair Trading Regulation code of conduct.
Whilst we all grapple which the raft of changes imposed on NSW in the last month including the above, what do the current directives, existing legislation and foreseeable legislative changes mean for owners corporations and short-term letting?
It means that lot owners can let their lots if it is their principal place of residence and the letting is for an essential purpose. They cannot be let to people holidaying or staying away from their home for non-essential purposes. At this stage, being stranded and self-isolating is not an essential service (it may remain to be seen whether self-isolating away from family members is indeed caring for others). It means that owners corporations can pass by-laws to prohibit short-term letting if the lot is not the principal place of residence for the owner or occupier.
If owners corporations wish to take advantage of the incoming changes to short-term letting on 10 April 2020 under the Strata Schemes Management Act 2015, they should amend existing by-laws or draft new by-laws. Kerin Benson lawyer
Kerin Benson Lawyers can draft a by-law prohibiting to the extent possible short-term letting within your scheme for the fixed fee of $365.00. If you would like a quote or wish to discuss short-term letting for your owners corporation, please get in touch.
Allison Benson’s article on short-term letting and Covid-19 published on 25 March 2020 is available here.
Article authors: GL and AB.

Local ACT builder Banyan Constructions Pty Ltd, was put into liquidation on 20 January 2020. This is likely to have significant repercussions for the owners of residential units built by Banyan Constructions in the last 5 years.
It is likely that Banyan Constructions has obtained insurance coverage from the Master Builders Fidelity Fund (the Fund).
If your building was built by Banyan Constructions in the last 5 years and you have building defects in your unit (or in the buildings that you manage), you have 90 days from 20 January 2020 (that is, until 19 April 2020) to make a claim against the Fund. If you are unsure as to whether you have building defects or not, please contact us on (02) 8706 7060 or at [email protected].
Please note that you will not be able to make a claim against the Fund after 19 April 2020.
 

By Christopher Kerin, Legal Practitioner Director at Kerin Benson Lawyers

Lot owners wishing to do works within their lot, in particular within courtyards or to outside areas of their lots where the works may be seen, might wonder whether it is necessary to seek permission from their owners corporation to carry out those works. In some instances, where a lot owner is doing work to common property then yes, permission is required. However, a lot owner doing work wholly within their lot may not require such permission even if the work is visible.
Most strata schemes will be subject to a by-law dealing with appearances. If your scheme has the model by-laws, it may be model by-law 12 or 17. The Appearances by-law will help determine whether owners corporation permission is required. The Appearances by-law will generally state:
The owner or occupier of a lot must not, without the written consent of the owners corporation, maintain within the lot anything visible from outside the lot that, viewed from outside the lot, is not in keeping with the rest of the building.
The key words are “visible” and “in keeping with the rest of the building”.
The by-law was subject of the NSW Civil & Administrative Tribunal’s decision in The Owners – Strata Plan 30198 v Barnes [2018] NSWCATCD 8. In that case, a lot owner had erected a deck and retaining wall used for entertaining in their courtyard without consent of the Owners Corporation. The Owners Corporation argued it was not in keeping with the building.
The parties relied on expert reports, one of which was a town planner. Whilst the Tribunal accepted the reports, they ultimately held that to determine whether the works were “in keeping with” the rest of the building a visual comparison was sufficient and that technical expertise was not required.
The Tribunal was satisfied by photographs that the works had a “uniformity of appearance” that was based on the timber and paving materials used in their construction and on the plants which were largely tropical in appearance. It held that the works had a “visual and aesthetic harmony” when compared to photos of other lots and common property.
It is worth noting that the Tribunal accepted there was no decision on the phrase “in keeping with” from the Supreme Court or other superior Court, and whilst the Tribunal considered the ordinary meaning of “in keeping with”, dictionary synonyms were not strictly adopted.
What is the take away for lot owners and owners corporations from Barnes?
Works conducted wholly within a lot will not need approval from an owners corporation if those works are uniform and have visually aesthetic harmony with the rest of the strata plan. Note that an aesthetic opinion will be subjective.
Lot owners should take care however, because works carried out to common property that change the external appearance of a lot must have approval.
Accordingly, lot owners should consider where the boundary of their lot is or what might be common property bounding or within their lot before they carry out work relying on by-law 12 or 17.
Written by Gemma Lumley and Allison Benson
6 February 2020

In the recent cases of Yardy v Owners Corporation SP 57237 [2018] NSWCATCD 19 (decided on 19 February 2018), McCormick & McGinness v The Owners – Strata Plan No. 2371 (decided on 9 October 2018) and most recently a matter relating to The Elan building in Kings Cross (decided on 20 September 2019), the NSW Civil and Administrative Tribunal (the Tribunal) held that a no pets provision in the by-laws would be invalid on the basis of section 139(1) of the Strata Schemes Management Act 2015 (the Act).
Section 139(1) of the Act provides that a by-law must not be harsh, unconscionable or oppressive.
In Yardy, the Tribunal held that the no pets by-law:
1. was harsh as it was a complete prohibition with no exceptions and made no provisions for special circumstances to be considered;
2. was unconscionable because it unreasonably and unnecessarily precludes the exercise of a right of habitation which is part of contemporary community standards and provides no opportunity for consideration to be given to the rights and needs of individual lot owners; and
3. was unreasonably excessive and oppressive as it does not involve or permit a balanced consideration of the interests and needs of all lot owners or occupiers. The by-law provided no process by which a lot owner could be able to keep an animal as a pet and operated only in the interests of those opposed to the keeping of animals as pets.
A critical consideration in the Yardy proceedings was the evidence of the benefit of pet ownership to humans as a general rule, and how the recognition of this phenomenon has formed part of contemporary community standards. The Tribunal further stated that keeping a pet may also be a part of a lot owner’s basic right of habitation.
The consequences of these decisions are that:
1. a by-law containing an outright prohibition is likely to be held to be harsh, unconscionable and oppressive and may be invalidated by the Tribunal; and
2. contemporary community standards need to be considered.
The effect of the above is that unless there is something special about a scheme that would justify a blanket no pets by-law then a by-law prohibiting the keeping of a pet is likely to be held invalid if challenged.
An appeal has been apparently been lodged in respect of The Elan building decision and it remains to be seen whether the decision made at first instance will be upheld.
We note that the decisions of McCormick & McGinness and The Elan Building have not been published.
Written By Jasmin Singh and Allison Benson

Owners Corporations and lot owners considering taking legal action against one another should carefully consider the jurisdiction in which they commence proceedings.
For most matters the NSW Civil and Administrative Tribunal (NCAT) will be the appropriate jurisdiction as the Strata Schemes Management Act 2015 (the SSMA 2015) provides that the Tribunal is the primary jurisdiction of disputes under the SSMA 2015. However, it may also be appropriate in some circumstances to take action in a court as not all disputes may be able to be dealt with under the SSMA 2015, a court may have the express jurisdiction or the remedy sought is not available under the SSMA 2015.
Parliament recognised this and included section 253(1) in the SSMA 2015 (the equivalent was section 226(1) in the SSMA 1996) which allows parties to purse remedies outside of the Strata Schemes outside of the Strata Schemes Management Act 2015. However, section 253(1) (like its predecessor) operates to deter plaintiffs (aka applicants) from doing so by providing that a plaintiff is to be liable for the defendants costs if the court, having regard to the subject-matter of the proceedings, finds that taking the proceedings was not justified because the SSMA 2015 makes adequate provision for the enforcement of the lot owners rights and remedies. What this means is that section 253 of the SSNA 2015 makes even successful plaintiffs liable for the defendant’s costs if the matter should have been litigated in the NCAT but was instead litigated in a court.
Section 253’s predecessor, section 226(1) in the SSMA 1996, was the subject of the NSW Court of Appeal decision in EB 9 & 10 Pty Ltd v The Owners Strata Plan 934 [2018] NSWCA 288. The Court of Appeal found that although the lot owners were successful in obtaining the right or remedy in proceedings below in the Supreme Court and that the SSMA 1996 made “adequate provision” to enforce the right or remedy they sought. In the case, the lot owners obtained a declaration that they could use part of the common property to manoeuvre their car into their lot parking space. But the Court of Appeal held that a similar remedy could have been obtained and enforced by orders of the Adjudicator exercising their powers under the SSMA 1996 and in accordance with the provisions of the SSMA 1996.
In interpreting section 226(2) the Court of Appeal found “adequate provision” is a provision under the SSMA 1996 that is “at least as effective” as remedies sought outside of the Act. They also found that the SSMA 1996 was still adequate even if the remedy available under it is “less secure or less effective” that one available in a court. The Court found the test for whether proceedings were “justified” was whether it was appropriate (or inappropriate) in the whole of the circumstances of the proceedings. Specifically, for this case, it was held that Tribunal orders under section 61 and 138 of the SSMA 1996 would have been adequate as the relief sought was to prevent the Owners Corporation from dealing with part of the common property.
 
Written by Gemma Lumley and Allison Benson

A by-law for a strata scheme can only be made, amended or repealed if it is passed by special resolution at a properly convened general meeting. Once the by-law has been passed, it must be registered at the NSW Land Registry Services within six months. Under the previous legislation, this time period was two years.
If the by-law is a common property rights by-law that confers exclusive use or special privileges to lot owners, then there is another important requirement which is that each owner on whom the by-law confers rights or special privileges must provide their written consent to the by-law. This is required by section 143(1) of the Strata Schemes Management Act 2015. If this consent if not given, then section 143(4) of the Act has the effect that two years after the making of the by-law all conditions and preliminary steps precedent are taken to have been complied with. This includes returning a consent form.
In the recent case of Khadivzad v The Owners – Strata Plan 53457 [2019] NSWSC 157, the scheme previously had a special by-law giving some lot owners the exclusive use and enjoyment of common property to park their vehicles. This special by-law was subsequently repealed at a general meeting in 1999. However, the consent of the affected lot owners were not obtained. Some lot owners raised an objection to this and had their legal representatives write to the secretary of the owners corporation notifying the owners corporation that the repeal of the by-law was without their consent. This was not resolved. The lot owners did not commence proceedings to challenge the validity of the repeal of the special by-law or to establish that the special by-law remained in effect. The repeal of the special by-law was subsequently registered in November 2001 which was within the two year registration time period applicable at the time.
The owners of lot 9, who were among the lot owners who benefitted under the special by-law, commenced proceedings in 2018 alleging that the special resolution was not effective to validly repeal the special by-law because the written consent of the affected lot owners were not obtained.
The Court agreed that the written consent of the relevant lot owners was required and that it had not been obtained prior to passing the special resolution which purported to repeal the special by-law. However, the court went to state that because two years had passed since the passing of the special resolution, it had been conclusively presumed that the consent requirement was fulfilled.
Although the lot owner’s legal representative wrote to the owners corporation disputing the validity of a by-law this was not a sufficient challenge to prevent the presumption in section 143(4) of the Act applying. The Court held that the mere writing of a letter of complaint which cannot itself affect the validity or effectiveness of a by-law, or initiate a process that might lead to such an affect, cannot be considered to constitute a ‘challenge’ to a by-law. Rather, what is required before the end of the two-year period provided in section 143(4) of the Act is for proceedings to be commenced to challenge the validity of the repeal of the special by-law or to establish that the special by-law remained in effect.
The lesson to be learnt is, if you disagreed with the by-law being passed, repealed or amended and you are a lot owner granted a right or burdened with an obligation under the by-law then you need to take action within two years of the by-law being passed if you want to challenge it.
Written by Jasmin H. Singh and Allison Benson 16/09/2019

The short answer is yes, but only in extremely limited circumstances, and in practice, it is difficult and highly unusual.
Contributions must be in accordance with unit entitlement
Each year an owners corporation prepares a budget in anticipation of the funds they need to raise in order to cover the expenses of the administration of the owners corporation and funds to maintain the common property, see section 79 of the Strata Schemes Management Act 2015. The owners corporation must levy on lot owners contributions in shares proportional to the unit entitlement of the lot owners’ respective lots. This obligation, which is pursuant to section 83(2) of the Act, is strict, and parties cannot contract out (i.e. make an agreement) of this obligation because it is a statutory obligation. However, there is scope to vary this in three very limited ways.

Contributions may be larger if grater insurance costs

Section 82 of the Act which provides that a lot owner who’s use of a lot causes the owners corporation’s insurance premium to be higher, may make a higher contribution attributable to the insurance premium so long as that lot owner has consented to the higher amount. And in the event parties are in dispute on the issue, an owner or owners corporation may seek and order from the Tribunal that an owners consent has been unreasonably refused.

Interests and discounts

Although it is not strictly a variation of the amount levied on a lot owner, section 85 of the Act provides that owners corporation is to charge 10% simple interest on contributions that are not paid within one month of becoming due and payable. However, the section also allows owners corporation to determine that a contribution is to bear no interest, and further, that if the contribution is paid within the one month, and if the owners corporation have determined it, the owner may pay 10% less of their contribution. Accordingly, the Act provides the owners corporation with some discretion as to the charging of interest on contributions, but not the amount of the contribution itself.

A Tribunal order varying contributions

Section 87 of the Act provides that the Tribunal may order that contributions be paid in a different amount (or by a different method) if it can be shown that the amount levied or proposed to be levied is inadequate or excessive (or the manner of payment is unreasonable). Accordingly, a party must apply to the Tribunal and demonstrate how the levy is inadequate or excessive.
Other ways lot owners may contribute otherwise than in accordance with unit entitlements
Contributions may only be varied by order of the Tribunal because they are demonstrably inadequate or excessive, or only to cover the difference of an insurance premium payable because of the use of a lot. There are three other methods by which owners corporations can receive payments from lot owners:

an owners corporation may strike a “special levy” to raise funds for items that have not been budgeted for. But such funds will still be raised in the same manner as an ordinary contribution that is, on each lot owner in accordance with their unit entitlement.
pursuant to a common property rights by-law or a by-law under section 108 of the Act, a lot owner may agree to pay an amount, either as a one off or an on going amount, to the owners corporation as a term of that by-law; and
If there is an order from either a Court or the Tribunal that affects payment of costs in respect of legal proceedings.

If you would like further information on items raised in this article, please contact Kerin Benson Lawyers.
Written by Gemma Lumley and Allison Benson 10/09/2019

Trees provide amenity, privacy and enjoyment between neighbours, including neighbours within strata schemes. But when a tree starts damage or threaten damage to property or life, the issue of who is responsible for the tree rears its head.
In a strata scheme, the starting point for determining who is responsible for a tree is with the definition of lot and common property as provided for by the Strata Schemes Development Act 2015. After this you need to consider any notifications on the registered strata plan for the scheme as to the stratum (or area) of a lot. Because lot property is the cubic space between the boundaries provided for on a strata plan, anything within lot property, including a tree, it’s roots, foliage and branches, will also be lot property. Accordingly, any part of the tree which is on common property (roots, foliage, branches), is part of the common property and can be dealt with by the owners corporation subject to local planning laws. The situation is similar for non-strata scheme landowners, and owners corporation’s will be affected where a tree that is mostly on common property encroaches into a neighbouring property.
Tree disputes between neighbours, including between neighbours in a strata scheme, are governed by Trees (Dispute Between Neighbours) Act 2006 and heard by Commissioners in the Land and Environment Court. Hearings for tree disputes are typically heard on-site at the property or properties affected. Generally speaking, a landowner affected by a neighbours tree or part thereof will apply for an order to remedy, restrain or prevent damage to property or prevent injury to a person. The Court has a wide discretion to make orders in regards to a tree or any part of it, however, they must be satisfied that parties have made a reasonable effort to resolve the dispute and that the tree either has caused, is causing or in the near future is likely to cause damage to the applicant’s property or likely to cause injury to a person. The location of tree, weather interference with it would require consent under another Act, the impact of pruning, contribution to privacy, heritage value, sun, wind or noise, whether the tree has any historical cultural or scientific values, biodiversity and public amenity must also be considered.
The Court may also take into other factors, such as the conduct of the neighbours with regard to maintenance, the age of the tree and the circumstances surrounding the planting and subsequent development the tree now affects. An example is Owners Corporation Strata Plan 328 v Owners Corporation Strata Plan 4743 [2011] in which the Court held that whilst an 80 year old tree contributed to the damage of a 30 to 40 year old driveway, the construction of the drive way should have considered the tree. In that case, the Commissioner found that the driveway was inadequately constructed and that this also contributed to the damage. In the same case, it was held that the applicant contributed to the damage by not conducting root maintenance after they allowed water to continually drip onto and feed the roots. The overall outcome was that the respondent was ordered to pay one third of the contribution to remedy the damage.
Commissioners in the Land and Environment Court are typically non-legal specialists such as engineers, arborists or planners, and they may make their own enquiries and inform themselves on matters with regards to evidence in a tree dispute. Nevertheless, if you are an applicant or respondent in a tree dispute, clear evidence of the issue and cause may be useful.
 
If you live in a strata scheme and have a tree dispute, or are unsure of your rights or responsibilities please contact us.
By Gemma Lumley

In the recent Supreme Court of NSW case Voller (Voller v Nationwide News Pty Ltd; Voller v Fairfax Media Publications Pty Ltd; Voller v Australian News Channel Pty Ltd [2019] NSWSC 766), the court held that operators of public Facebook pages are deemed to be ‘publishers’, and thus may potentially be liable for defamatory comments made by third-party users.
This decision appears to extend liability to businesses for defamation despite the fact they are not the authors of the comments concerned. Rather if a business has demonstrated involvement in encouraging or promoting the publication of comments this may be enough to make the business liable as a ‘publisher’ to a person defamed by those comments.
Background
The case concerned three defendants each of whom are media organisations and in the business of disseminating material to the public by electronic means, including via public Facebook pages which invite contributions from members of the public. It is alleged that some of those contributions were defamatory.
Question
The question before the court was “Whether the plaintiff had established the publication element of the cause of action of defamation against the defendant in respect of each of the Facebook comments by third-party users that are alleged to be defamatory?” Which was ultimately answered in the affirmative.
Decision
The court stated that it is the publication of the material, not its composition, which is the actionable wrong. In relation to a public Facebook page a comment complied or authorised by the third-party user is not published until the owner of the public Facebook page allows persons to read it. In this case each defendant acted not merely as a conduit of the comment. Rather, they provided the forum for its publication and encouraged the publication of comments for their own commercial purposes. It was the comment’s presence on the public Facebook page, which allowed third-party users to gain access.
In order to prevent liability for defamation the owner/administrator of a public Facebook page is able to render all or substantially all comments hidden. Thus, the extended publication of the comment is wholly in the hands of the media companies as operators/owners of their public Facebook pages.
In conclusion, the Court was satisfied, that the defendant media companies were the first or primary ‘publishers’, in relation to the general readership of the Facebook pages they operate. By opening and continuing to operate public Facebook pages for their own commercial ends, the defendants assumed the risk that comments made on that page will render them liable for defamation. Such risk may be addressed by initialing hiding all comments and un-hiding such comments once accessed.
Takeaways
Although the Voller case concerned public pages maintained by media companies, the decision creates potential liability for anyone using Facebook/social media forums for a commercial purpose, this could include strata managers using forums to communicate with lot owners. Thus, this case should serve as a caution against posting items that will likely spark heated discussion amongst readers and which may cause insult.

The NSW government has taken the view that short-term rental accommodation (STRA) can result in economic benefits, such benefits must be balanced against the associated impacts to neighbouring owners or communities caused by the inconsiderate or anti-social behaviour of guests under STRA arrangements.
Feedback
The proposed changes to STRA have been outlined in the Short-Term Rental Accommodation: A New Regulatory Framework Discussion Paper (August 2019). Submissions can be made online until close of business on 11 September 2019 via https://www.planningportal.nsw.gov.au/exhibition/have-your-say-short-term-rental-accommodation-reforms or in writing to the Department of Planning, Industry and Environment.
The call for feedback comes approximately a year after the Fair-Trading Amendment (Short-term Rental Accommodation) Act 2018 was passed on 14 August 2018. The Act will add section 137A into the Strata Schemes Management Act 2015 (SSMA) and provides that a by-law made by an owners corporation may prohibit a lot being used for the purposes of a STRA arrangement, if the lot is not the principal place of residence of the person who is giving another person the right to occupy the lot.
Changes
The Discussion Paper suggests two options for implementing the regulatory framework. The first option is to allow for a staged implementation. With the planning instruments, the Code, the Amendment Regulation and amendments to strata legislation potentially commencing at the end of this year, while the Register would commence next year. Alternatively, all instruments referred to could commence simultaneously next year. The proposed planning framework for STRA aims to provide consistency and certainty in contrast to the differing regulations that currently apply in various local government areas across New South Wales.
In relation to the planning instruments, the State Environmental Planning Policy (Short-term Rental Accommodation) 2019 introduces exempt and complying development pathways for STRA. For example, if a host is present, they can allow their lot to be used for STRA all year round. However, if they are not present and the land is not bush fire prone or a flood control lot, then the host can only allow their lot to be used for STRA for up to 180 days in a year in greater Sydney, or up to 365 days in other areas of NSW (unless the local Council decides otherwise). A number of regional Councils (Ballina Shire, Lake Macquarie, Clarence Valley Shire and Muswellbrook Shire) have nominated a maximum period of 180 days as the number of days a lot can be available for STRA per year. In these circumstances, STRA would be considered as an exempt development which would circumvent the need to obtain Council approval.
The proposed Environmental Planning and Assessment (Short-term Rental Accommodation) Regulation 2019, along with the proposed Short-term Rental Accommodation Fire Safety Standard, introduces new safety standards for dwellings used for STRA. Such as placing a limit on the number of persons per bedroom/per dwelling, and a requirement to install smoke alarms in each bedroom.
The Code proposes to give enforcement functions and powers to NSW Fair Trading, which will also be responsible for managing the exclusion register (which lists those who have received two strikes within a two-year period). It also sets out the rights and obligations for participants in STRA. For example, booking platforms must not list an excluded host’s premises, letting agents must not take a booking for an excluded guest or offer an excluded host’s premises for STRA, and hosts must hold public liability insurance during any occupancy period.
Note that in circumstances where the host is not present, bookings of 21 or more consecutive days will not contribute to any day thresholds that apply. Although, safety standards will still need to be met. The reasoning seems to be that longer bookings tend to have fewer amenity impacts and are a key support to mobile workforce.
Key Information
A key provision in the Fair-Trading Amendment (Short-term Rental Accommodation) Act 2018 includes a definition of “short term rental accommodation arrangement” as occupation for less than 3 months or as defined by the regulations. Further, prescribed maximum penalties for a breach of the Code are also outlined within the Act (e.g. 200 penalty units for individuals and 1,000 penalty units for corporations). It should also be noted that the Code will prevail to the extent of any inconsistency with a development consent.
The key case on STRA in relation to strata schemes is Estens v Owners Corporation SP11825 [2017] NSWCATCD 63. In this case the NSW Civil and Administrative Tribunal held that a by-law prohibiting short term accommodation was invalid. As the by-law breached section 139(2) of the Strata Schemes Management Act, in that it is a lease or a licence and would prevent the devolution of a lot. Once new legislation is introduced, short term letting by-laws will no longer be held invalid, provided they do not offend other provisions in legislation including the SSMA.
To date there have been mixed responses from various stakeholders in relation to short term rental accommodation in strata schemes, therefore it will be interesting to see what feedback the state government receives and how such feedback will influence the future of STRA.

The general common law rule in respect of costs in litigation is that costs follow the event. This means that the unsuccessful party generally pays at least part of the costs of the successful party.
The general rule does not apply in the NSW Civil and Administrative Tribunal (NCAT). In NCAT the starting point in relation to costs is that each party is to bear their own costs.
The Tribunal may make an order for costs if:

it is satisfied that there are ‘special circumstances’ warranting an order for costs being made, or
rule 38 of the Civil and Administrative Tribunal Rules 2014 (the NCAT Rules) applies, or
particular legislation allows an order for costs..

 
Special circumstances
Section 60(3) of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act) sets out the criteria the Tribunal may have regard to in determining whether there are special circumstances warranting an order for costs.
However, the use of the word “may” in s60(2) and (3) of the NCAT Act indicates that the criteria found in s60(3) of the NCAT Act are not the only criteria that NCAT may have regard to in determining the presence of special circumstances. This is reinforced by the words “any other matter that the Tribunal considers relevant” at s60(3)(g) of the NCAT Act. As such, other factors are relevant when considering the question of “special circumstances”.
It is well established that “special circumstances” means circumstances that are out of the ordinary but not necessarily extraordinary or exceptional. Examples of special circumstances may include:

Where the matter had limited or no possibility of success.
Where the claim was weak, misconceived and bound to fail.
Where the matter involved complex and novel points of law.
Where there is an unreasonable refusal of a settlement offer.

 
It is important to note that being successful in a proceeding is not on its own sufficient to demonstrate special circumstances.
If NCAT finds that “special circumstances” exist, it has a discretion to decide whether an order for costs should be made. This means that the Tribunal is not bound to make an order for costs even if special circumstances are established.
Rule 38 of the NCAT Rules
Rule 38 of the Civil and Administrative Tribunal Rules 2014 gives NCAT jurisdiction to make an order for costs regardless of the requirements of s60 of the NCAT Act where the proceedings are in the Consumer and Commercial Division of the Tribunal (this is the division where Strata and Home Building matters are heard) and:

the amount claimed or in dispute in the proceedings is more than $30,000; or
the amount claimed or in dispute is more than $10,000 but not more than $30,000 and the Tribunal has made an order under clause 10 (2) of Schedule 4 to the NCAT Act in respect of a party causing another party disadvantage.

It should be borne in mind that an order for costs is not a form of punishment on the unsuccessful party, but rather the order is compensatory in nature, in that it is to compensate the successful party for the expense they incurred because of the claim.
 
By Jasmin Singh and Allison Benson

Having a special by-law drafted by a solicitor, seeking the Owners Corporation’s approval and registering the by-law approving the works, are the main steps that an owner wishing to renovate their strata unit needs to take before commencing major works.
Under section 111 of the Strata Schemes Management Act 2015 (the Act), major renovations have to be approved by special resolution of the Owners Corporation at a general meeting. It is important that the motion is correctly drafted in order to reflect that the by-law was adopted by special resolution, as required by the Act.
The process to pass and register a by-law has many steps which must be followed as, until the by-law is registered it has no effect. Sometimes, the start of the works can be delayed by a failure to properly execute the documents required to register the new by-law.
Below is a short guide to avoid the most common mistakes when dealing with the Land Registry Services (the body responsible for record keeping in relation to property in NSW) and ensure that the process runs as smoothly as possible.

The time frames

Under section 141 of the Act, a by-law needs to be submitted for registration with the Land Registry Services within 6 months of the motion being passed at a general meeting. Failure to do so will result in the motion having to be re-passed, which would mean additional costs and delays for the owner. The owner should be aware that the amended Section 160 of the Evidence Act 1995 (NSW), requires at least 14 days’ notice (7 clear days’ notice + 7 working days for postage) to be given to all owners before a general meeting can be held. It is therefore critical that the owner/strata manager allow sufficient time for the rest of the owners to consider the works, meet and discuss the potential impact of the works on the affected portion of common property.

The execution of documents

When executing the documents for registration, there are a few simple rules that the Strata Managers/Strata Committees should keep in mind to avoid requisitions being raised by the Land Registry Services and unnecessary delays:

Ensure that the documents are printed one sided and in black and white. The NSW Land Registry will not accept double sided forms or coloured forms.
Ensure that the change of by-law form (form 15CH) is completed in all its parts by affixing the seal, dating and having an authorised member of staff sign and print their name and authority. Section 273 of the Act contains the list of persons authorised to execute the form.
Affix the seal and sign the first and the last page of the annexures to the change of by-law form. A dark blue or black pen should be used. The seal should be clearly visible and should not be smudged or be cut off by the edges of the page.
Depending on the building, the Owners Corporation may also need to file an approved form 10 indicating that the initial period has ended. This is a new requirement of the NSW Land Registry and the change of by-law will not be registered without it.

After the registration is complete

Once the by-law has been registered, the Land Registry Services will release a new certificate of title, which will include the terms of the new by-law. It is very important that the certificate is kept in a safe place by the strata manager/strata committee.
It is only after the registration has been finalised (and subject to any conditions imposed by the special by-law), that the owner may commence the works. In fact, until registered, the changes to the by-laws have no force or effect.
 
By Michela Alesse and Allison Benson

On 22 May 2019, Christopher Kerin appeared before the ACT Parliamentary Inquiry Into Building Quality in the ACT and detailed the challenges facing apartment owners in the ACT as well as what needs to change to provide more consumer protection to apartment owners. Watch Christopher’s