What are the benefits of clear by-laws?

By-laws can often become a headache for everyone involved in strata. Our blog takes a look at why it is important that they are clearly drafted and easily interpreted.

What are by-laws?

All strata schemes have a set of by-laws (rules) that owners, occupiers and, in some cases, even visitors must follow. They are typically annexed to leases and sale contracts so that every owner and occupier is aware of the rules.

By-laws cover issues such as works to common property, smoking, parking, noise, and the conduct of residents and visitors. The purpose is to set out the relevant rules and principles clearly, to help residents live together harmoniously in shared community living.

Why are they important?

By-laws are a crucial part of strata living.  They outline a shared set of standards for residents to abide by. It is important that everyone is aware of the rules that govern their strata scheme and shared property so they can be complied with and enforced as needed.

When by-laws are unclear, it often results in confusion, disagreements and sometimes costly legal proceedings. This is why steps should be taken to proactively ensure that by-laws are clear, achieve their purpose and are easy for everyone to understand.

When drafting by-laws, you will need to ensure that they are consistent with the overarching legislation to avoid costly breaches that may result in legal proceedings. More often than not, a dispute arises between a lot owner and the Owners Corporation because the by-laws are not clear and the parties do not understand the legislation.

What happens when they aren’t clear?

In the case of Pollak v The Owners – Strata Plan No 2834 [2020] NSWSC 784, the Court referred to the nine propositions for interpreting by-laws that were outlined by Justice McColl in the earlier The Owners of Strata Plan No 3397 v Tate (2007) 70 NSWLR 344.

The Court concentrated mainly on the point that exclusive use by-laws should be interpreted objectively by what they meant to a reasonable person. The Court stated that if there had been uncertainty in the by-law in that case, the intentions of those who passed the by-law must also be determined.

This case reinforces that when a by-law is not clear, the court may take into account a variety of factors to determine the outcome. Dealing with this uncertainty is risky, costly and time consuming for the owners. Therefore, it is recommended that an Owners Corporation ensures that all by-laws for its scheme are clearly drafted to avoid unnecessary disagreements and legal proceedings.

How can we help?

We specialise in reviewing, drafting and updating by-laws, and pride ourselves on providing simple and efficient advice for both individual lot owners and Owners Corporations.

We offer a fixed fee rate for drafting by-laws.  This includes the draft by-law, a motion to pass the by-law at a general meeting and general advice on the process.

If you need assistance with understanding, drafting, or updating your by-laws, please do not hesitate to contact our team on 9523 5535.

Related links:

New Mandatory Reporting Requirements for Strata Schemes in NSW

Disclaimer: The information contained in this article is provided as general information only. It is not intended to be legal advice and it should not be used or relied on as legal or professional advice.