15 Nov Strata Lawyers, Strata Law and By-Laws: When is Legal Action Necessary?
Why would an owners corporation need a lawyer? Are there strata lawyers? Should a specialist strata lawyer be engaged?
Where there is communal living and shared facilities which occur for properties affected by an owners corporation, there may be a need for legal advice or legal action, and this should be undertaken by a specialist strata lawyer who has the appropriate level of competence and experience around strata law.
Whilst all lawyers can provide advice, including community law centres which provide free services in some circumstances, it is best to engage strata specialist lawyers who are conversant with, and keep abreast with, strata law.
Some of the matters a strata lawyer can assist with include:
- recovery of unpaid fees and charges
- enforcement of rules
- advice regarding obligations of the owners corporation such as maintaining common property
- drafting and interpretation of rules
- advice on procedure and assistance with the conduct of general meetings and ballots
- defending claims against the owners corporation by owners or other parties
- pursuing builders or contractors for defective works
- leasing, licensing, acquiring or disposing of common property
- adverse possession claims of common property
In Victoria, the strata legislation is the Owners Corporation Act 2006 and the Owners Corporations Regulations 2018, which have the Model Rules. An owners corporation is of course affected by other regulations such as property law generally, occupational health and safety and compliance with accounting standards for financial reporting.
The legislation dealing with owners corporations is often set out in a principled form, and requires interpretation to determine the particular meaning and effect in a given circumstance which can necessitate engaging a strata specialist lawyer to provide advice.
Strata Rules and Strata Bylaws – what is a by law?
Simply speaking, in Australia, a by-law is a private set of rules established by any body corporate, organisation or community which allows it to clearly regulate itself around the use of lots, management of assets, circumstances around common property, facilities and services (it may also sometimes be written as “bylaw” or “by law”). In Victoria the model rules around strata by laws apply to all owners corporations; an owners corporation may make rules for particular circumstance, for example such as regulating the use of recreational areas. An owners corporation wishing to make rules (AKA strata by-laws) should ensure these are clear and enforceable. A specialist strata lawyer can assist by:
- whether the model rules are adequate
- providing advice to an owners corporation considering making rules around a strata by law
- drafting of rules when the committee has determined the appropriate areas of regulation
- advising as to procedural matters including preparation of resolutions, approval and lodging the rules with the Registrar of Titles
Legal Advice
There are number of areas in which a specialist strata law firm can provide advice.
For rules (AKA by laws in strata speak!), a lawyer can provide advice regarding the meaning of rules as these may require interpretation in a particular circumstance in order to determine if there has been a breach of the rules or in some instances, if the rules are valid and enforceable. This is particularly significant if there is dispute regarding an alleged breach of the rules.
Another area of contention can be the location of boundaries on plans of subdivision which determine the common property which the owners corporation responsible and the extent of an owner’s lots to allow the proper allocation of maintenance responsibility. Plans of subdivision can at times be complex and whilst a manager can provide its advice on boundaries, the manager is not a legal practitioner and if there is doubt advice should be sought from a specialist strata lawyer.
Strata Law Litigation
Owners corporations may at times be involved in litigation. The most common litigation is recovering of fees unpaid by members. Engaging a specialist strata lawyer ensures:
- the claim is properly prepared including the required supporting materials
- it is correctly lodged with VCAT or court
- there is appropriate representation at the hearing to avoid a claim being dismissed for procedural reasons or missteps.
If a VCAT orders payment of overdue fees and this is not satisfied by the defaulting member, further steps such as bankruptcy are required and it is necessary a legal practitioner represents the owners corporation in the steps.
There may be defects in the construction of building or works undertaken by contractors. A strata lawyer can:
- provide advice regarding remedies available and necessary steps
- assist with the appointment of specialist building consultants to provide required reports and opinions
- negotiate with the builder and its insurer
- conduct legal proceedings around strata laws
- advise on any settlement proposals and draft agreements necessary to give effect to settlement
- review any building contract necessary to rectify the defects
Disputes with neighbours may also arise over matters such as:
- fencing
- damage caused by trees
- flows of water
A specialist strata lawyer who is particularly aware of the distinction between lot boundaries and common property is essential in dealing with claims of this type in order that disputes may be resolved promptly and economically. While it’s extremely difficult to predict what a strata lawyer cost may be (and free strata lawyers are few and far between, no matter what the advertising may say), the cost of not engaging strata solicitors may outweigh how far out-of-pocket you may eventually be if strata litigation commences.
Strata Law and Dealing With Common Property
Strata legal matters can be complex and strata law changes do occur from time to time. If an owners corporation wishes to lease or licence common property it should seek advice from an experienced strata lawyer regarding the process and drafting of the appropriate agreement. Particularly where the grant is to third party such as a telecommunications company, the legal practitioner can review any proposed lease or licence to ensure the owners corporation is not exposed to risk.
At times an owners corporation may dispose of common property. This may be to overcome some failing in the past such as courtyards for ground level lots having been constructed but these are not on the strata title of the lot and remain common property. Alternatively, a neighbour may wish to purchase part of the common property for a particular purpose thereby removing it from the control of the owners corporation. In all such instances specialist strata title lawyers can provide advice, attend to the preparation of agreements, review proposed contracts, draft resolutions and attend to judgement of required dealings with the Registrar of Titles give effect to the changes made.
Although an owner cannot make a claim of adverse possession of common property, at times a neighbour may be seek to do so. If a neighbour does wish to claim part of the common property, an owners corporation should seek advice from a specialist strata lawyer to determine if it has any defence to the claim and ongoing effect on the owners corporation if the neighbour is successful.
In short, at various times an owners corporation will require assistance with legal problems and disputes and is in the interests of the owners corporation to engage a specialist strata lawyer.
Do you have more questions around strata law and whether strata legal advice may be necessary? Just send us an email or pick up the phone – contact details below.