By-laws & Dispute Resolution

Strata reform in

focus

strata.wa.gov.au

Presenter:

Kelly Whitfield

Landgate

Timing:

30 minute presentation

20 minutes for questions

Topics:

• By-laws and dispute

resolution

• Challenges under the

current act

• What’s changing

• How to find out more and

have your say

Today’s session

strata.wa.gov.au

Amended and new

Community

Titles Act 2018

Strata Titles

Act 1985

(amended 2018)

strata.wa.gov.au

Strata Titles Act (General) Regulations 2019

RegulationsThe Act

+

• We need your feedback on the consultation draft regulations.

• When the regulations are completed, the reforms ‘go live’

=The Law

Timeline for change 2019 Regulations

September Public consultation on strata regulations

2 to 17 September Community information sessions – Perth and regional

October / NovemberReview feedback and deliver final regulations - the

Strata Titles (General) Regulations 2019 - to Parliament

TBC - November

onwards

New strata law is proclaimed and comes into operation -

after the regulations have progressed through Parliament

strata.wa.gov.au

Key reforms on the way

Better information for

buyers

Improvements to

scheme management

By-laws and

simplifying

dispute resolution

Introducing safeguards for

scheme terminations

New - leasehold schemes

Enable more flexible

staged strata subdivision

The Act

By-laws

strata.wa.gov.au

What is a by-law?

• By-laws are the rules that everyone

in the strata scheme must follow.

• Who must follow them? The strata

company itself, all lot owners and all

tenants.

• It is as if each of these parties had

signed an agreement to do what is

set out in the by-laws.

strata.wa.gov.au

Challenges under the current Act

• The strata company can make, amend and repeal by-laws -

however sometimes this happens using the wrong standard of vote.

• The current Act provides no guidance around when a by-law is

invalid.

• The strata company has a duty to enforce by-laws – but very little

power to do so.

strata.wa.gov.au

Currently, enforcing by-laws is hard

• A penalty cannot be imposed unless the by-law specifically states that there

is a penalty

• The default by-laws do not mention a penalty

• Proving a breach is difficult as it must be established that the person has

wilfully and persistently breached the by-law

strata.wa.gov.au

strata.wa.gov.au

Changes made to by-laws

• Schedule 1 by-laws are now called ‘Governance by-laws’. They need a resolution without dissent to create, amend, or repeal.

• Schedule 2 by-laws are ‘Conduct’ by-laws. To create, amend or repeal these takes a special resolution.

• If a strata company makes, amends or repeals a by-law, they must indicate whether it is a Governance or Conduct by-law.

strata.wa.gov.au

Changes to default by-laws

• Some default by-laws have been deleted or moved into a different schedule.

• Some by-laws have been deleted. Some have been put into the Act instead: voting and appointing proxies.

• Due to these amendments, it’s possible that a strata company has a by-law in the wrong schedule: the by-law is still enforceable.

• If the strata company makes a new by-law, or amends or repeals an old one, then they should review their by-laws and lodge a consolidated set.

strata.wa.gov.au

When are by-laws invalid?

By-laws are invalid if:

• There was no power to make them

• They are inconsistent with the Act, or any other law

• They limit the right of an owner to vote on a resolution (except as set out in the Act)

• They prohibit or restrict someone selling their lot

• They prohibit the use of an assistance animal

• They are unfair, discriminatory, oppressive or unreasonable.

strata.wa.gov.au

Summary: by-laws

• We have provided more clarification and guidance around the nature

of by-laws and the type of vote that must be achieved to change them.

• The strata reforms provide that by-laws must not be unfair,

discriminatory, oppressive or unreasonable. These criteria will be

important if a dispute arises.

Dispute Resolution

strata.wa.gov.au

Challenges under the current Act

Multiple forums for dispute resolution

• Currently, strata disputes in WA are heard in four different

forums – three different courts and the State Administrative

Tribunal (SAT).

• The dispute resolution provisions are complex, too specific and

limit the power the SAT has to resolve strata disputes.

strata.wa.gov.au

Simplified dispute resolution

Under the reforms, disputes will be resolved efficiently and at less cost

with SAT becoming the ‘one-stop-shop’ for strata disputes.

• SAT is an independent tribunal

• Less formal and has more flexible

procedures than those used in

traditional courts

• Provide an appropriate and quick way

for people to get disputes resolved.

strata.wa.gov.au

What will be changing?

SAT will:

• Provide parties with access to a cost-effective dispute

resolution forum.

• Be given broader powers to resolve scheme disputes.

• Be empowered to more easily enforce by-laws.

Note - if action is taken to recover unpaid levies, this is still to be

taken via civil courts.

strata.wa.gov.au

What will be changing?

The amended Act clearly sets out that SAT may resolve disputes between scheme participants.

The Act sets out:

• What a scheme dispute is

• Who scheme participants are

The Act gives the SAT broad powers to make:

• Declarations

• Orders

strata.wa.gov.au

Enforcing by-laws

• The strata company, owners and occupiers can apply to the SAT for an order

to enforce a by-law

• The SAT will have the power to make an order that a person :

- stop breaching a by-law

- fix the breach of the by-law.

strata.wa.gov.au

strata.wa.gov.au

Enforcement of an order to act

The SAT may make an order that a person take a particular action - for

example, repairing common property they damaged.

If the person doesn’t take that action, the SAT may:

• Make an order for them to pay money to compensate for their failure to act.

For example, this could be for enough money for a builder to repair the

damaged common property.

strata.wa.gov.au

strata.wa.gov.au

Enforcing by-laws

SAT can order a person breaching a by-law to pay a penalty in any of the

following circumstances:

• The strata company serves notice and breach continues

• The breach is serious

• The breach occurs 3 times

strata.wa.gov.au

strata.wa.gov.au

SAT’s powers broadened

Some examples - the SAT will have the power to resolve disputes between:

• Lot owners about bylaws, resolutions, the appointment or election of council members.

• A buyer and seller of a strata lot about the information which should have been given before the contract was signed.

• A strata manager and the strata company about the strata management contract.

strata.wa.gov.au

Amending and repealing by-laws

The SAT will be given the power to amend or repeal a by-law on the

basis that it is:

• Oppressive or unreasonable

• Unfairly prejudicial or discriminatory against one or more owners

strata.wa.gov.au

strata.wa.gov.au

Effectively resolving strata disputes

• The limit on SAT monetary orders – which was $1,000 – has

been removed.

• The SAT will be able to award costs in strata disputes.

• The SAT will resolve disputes between the strata company and

strata manager.

strata.wa.gov.au

strata.wa.gov.au

Resolving strata disputes quickly

• The SAT will be able to make a final decision in proceedings at

a directions hearing if it considers that appropriate

• Owners can go straight to SAT without having to go through

other more expensive procedures.

strata.wa.gov.au

strata.wa.gov.au

Summary: dispute resolution

• As part of the strata reforms we have made extensive changes to

help people living in strata to deal with disputes when they arise.

• Most of these changes relate to the broadening of the State

Administrative Tribunal’s powers to deal with disputes that arise.

strata.wa.gov.au

The proposed regulations are

now available to comment on.

Visit strata.wa.gov.au

Public consultation period

strata.wa.gov.au

Visit strata.wa.gov.au

Share or re-watch the overview

information session or any of the in

focus sessions once they’ve been held.

Subscribe for updates on

key developments.

For more information

strata.wa.gov.au

Disclaimer

This presentation has been prepared for the purposes of informing stakeholders

on the proposed strata title reforms to legislation in WA. Every effort has been

made to ensure the information presented is accurate at the time of

publication. Because it avoids the use of legal language, information about the

law may have been summarised or expressed in general statements. Legislation

is subject to government consideration and Parliamentary processes. This

information should not be relied upon as a substitute for professional legal

advice, nor relied upon as a guide for future legislation relating to strata in WA or

in relation to current or future subdivision or development proposals, commercial

transactions or dealings in strata title.

Questions?

Thank you