Q&As

James Blake on Strata Schemes and their by-laws

Thursday November 9, 2017

James Blake specialises in all areas of building, construction and strata law for both private and commercial clients. He practices principally in the Supreme and District Courts of New South Wales and the NSW Civil and Administrative Tribunal representing a diverse range of clients. James was admitted as a solicitor in Ireland in 2004 having previously worked as a Paralegal for Clayton Utz in Sydney (1998-1999) before returning to Dublin to complete his studies. From 1999 to 2008, he worked for John P. Redmond & Co, a boutique practice located in the Dublin CBD specialising in property and litigation with a particular emphasis on the insurance industry. His clients included Allianz, Zurich, Generali and the Motor Insurers Bureau of Ireland. His property practice encompassed both contentions and non-contentions matters and included advising on residential developments and building defects litigation. James moved to Sydney with his family to undertake work for the Insurance and Commercial Dispute Resolution Groups at McCabes Lawyers before joining Turnbull Bowles in 2010.

We had the pleasure of sitting down with James recently to discuss key challenges and opportunities facing the industry today.

James Blake -PIC2

 

You can find the full Q&A below.

What are some of the key trends and developments in strata law in NSW?

The introduction of the Strata Schemes Management Act 2015 has resulted in increased regulation and scrutiny of the role of strata managing agents, their agreements, term of appointment, disclosure of interests, prior connection to developers, removal/termination and potential liability.

The immediate powers of a Developer to influence the management and control of a strata in the first few years post registration have been diminished.

The rules and procedures regarding Owners undertaking certain works have been relaxed with the introduction of Section 109 (Cosmetic Works) and Section 110 (Minor Renovations). However, there is still plenty of confusion and debate about these issues. We are regularly asked to advise whether a particular project falls within the definition of Cosmetic Works or Minor Renovations or whether it is a project that requires a Common Property Rights By-Law under Section 142.

The tragic events surrounding the Grenfell Tower in London have led to a huge increase in requests for information regarding inspections, audits and fire safety in general.

An Owner of a Lot may recover damages from the Owners Corporation for any reasonably foreseeable loss he/she suffers as a result of the Owners Corporation failing to maintain or repair the common property. This can include property damage, loss of rent and the cost of alternative accommodation. Some decisions have already come down from NCAT where financial awards have been made to out of pocket owners.

It is a heady time for investors and developers since the Collective sale and renewal provisions came into effect. A strata scheme may be to be sold or redeveloped if owners of at least 75% of the lots in the scheme agree and the Land and Environment Court are satisfied that this is just and equitable. In February 2017, it was reported that two Strata Schemes comprising 4 buildings in Gerrale Street, Cronulla agreed to a collective sale to developers for the sum of $54 million.

We will have to wait and see what happens with the new building bond and inspections scheme. It was postponed from its original 1 July 2017 commencement date and will now commence on 1 January 2018.

Is there a key takeaway you can highlight from the recent strata law reforms and their impact so far?

The Strata Schemes Management Act 2015 is a complicated piece of legislation and strata is a unique area of law. If you are in any doubt as to your rights and obligations, seek advice from a professional before you make any decisions.

This is particularly important if your query is in relation to a contentious issue whether it is a dispute between the Owners Corporation and an Owner or Occupier, a dispute between Owners or vice versa.

Parties to a dispute can no longer seek Adjudicators orders from NCAT.  That process was done “on the papers” and was a relatively cheap and quick way to deal with a strata dispute. Disputes about strata are now subject to a full hearing before a Tribunal Member. As such, it is a more time consuming and potentially costly exercise.

We recommend you get advice before you bring an application or commence an action because what you spend now on good advice, you will save later on wasted time and cost.

What’s one mistake you see people make in strata matters?

Many Owners and Occupiers will tell you that they “know their rights” particularly when it comes repairing defects. However, very few seem to understand their “obligations”. For example, many Owners believe they are entitled to deny the Owners Corporation access to their Lot to undertake work on the common property if they do not agree with the scope of works that is going to be performed. This is simply not the case. It is up to the Owners Corporation to determine the correct scope of work and have it undertaken. The Owner is obliged to provide access. If he/she fails to do so, the Owners Corporation can seek orders for access from NCAT.

What’s a misconception some practitioners or their clients have regarding By-Laws?

Many practitioners treat Strata Law and the interpretation of By-Laws as a branch of commercial law. Most owners approach By-Laws as matters which deal exclusively with private and personal rights. The reality is that strata law is a unique and very specialised area of the law that traverses both commercial and private law concepts. As a practitioner, unless you practise in the area on a regular basis, you need to be very careful about providing advice particularly about the drafting, interpretation and enforcement of By-Laws. As an Owner, you need to get a clear understanding of the difference between your rights and your obligations and what you do own and do not own.

What’s one tip you can offer when dealing with the new model By-Laws?

There are many different types of Strata Schemes including residential, commercial, mixed use, industrial, resorts, retirement villages. However, there is only one set of Model By-Laws for Strata Schemes registered after 30 November 2016.

The new Model By-Law are a very good place to start when reviewing and comparing your existing By-Laws. However, they are not the be all and end all. For existing Schemes, no one knows better than the Owners and Occupiers of a particular building or complex what works best for them. Change for the sake of change is not warranted. If your existing By-Laws are working for you and they are otherwise compliant with the legislation, there is no need to change them.

Do you have any insights into how people should approach Tribunal applications regarding By-Laws?

The first insight into how people should approach Tribunal applications regarding By-Laws is to try to avoid them. If you believe a matter can be resolved without recourse to the Tribunal, you should pursue that option at first instance. In any event, most applications to the Tribunal will not be accepted unless the parties have first attempted mediation.

Under Section 148, the Tribunal may make an order that an amendment to a By-Law be revoked, that a repealed By-Law be revived or that an additional By-Law be repealed. Under Section 149, the Tribunal may make an order prescribing a change to a By-Law if the Tribunal finds the Owners Corporation has unreasonably refused to make a common property rights By-Law. Under Section 105, the Tribunal may make an order declaring a By-Law to be invalid if the Tribunal considers that an owners corporation did not have the power to make the By-Law or that the By-Law is harsh, unconscionable or oppressive.

Enforcement of By-Laws and Civil Penalties are dealt with under Section 146 and 147.

Regardless of the nature of the application, Tribunal applications regarding By-Law should be treated in the same manner as any other legal application. Attention to detail and meticulous preparation are the keys to success.

If you are challenging the refusal of the Owners Corporation to the making of a Common Property Rights By-Law, you should have strong evidence regarding the reasons why the consent was refused. For example, notes from the meeting and comments made by attendees could very useful particularly if the refusal was based on nothing more than personal dislike for the Owner in question rather than the impact of the works on their use and enjoyment of their own lot.

If you are challenging the validity of a By-Law or you are of the view that the Owners Corporation did not have the power to make it, your focus should be on the wording of the Act itself. Section 139 deals with restrictions on By-Laws and Section 270 prohibits contracting out of the provisions of the Act.

You can hear more from James who is speaking at the Strata Title: New Law, New Regulations, New Schemes seminar, being held on Wednesday 15 November at the Primus Hotel Sydney.

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"Thank you, was helpful & informative and is an important and developing area of law."

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