NSW: Q&A Can the OC issue fines for strata scheme bylaw breaches?

These Q&As are from NSW lot owners concerned about fines for bylaw breaches. Can the owners corporation issue on the spot fines for bylaw breaches?

Table of Contents:

• QUESTION: Can the committee in our community title development charge owners $150 if they do not attend a clean up day?
• QUESTION: I have recently been issued an invoice by strata for not providing my car registration details to them. The amount is $165 and is pre-determined in the by-laws. Is this consistent with the Strata Scheme Management ACT 2015?
• QUESTION: Can our strata managers charge lot owners an administration fee for serving a bylaw breach notice?
• QUESTION: Can the OC charge an owner a monetary fine for parking or other similar bylaw breaches?
• QUESTION: I relocated bins that were blocking my parking space, was captured on CCTV and have been fined $550. I’m unable to get a reasonable response from the Owners Corporation about the matter. What do I do?

Question: Can the committee in our community title development charge owners $150 if they do not attend a clean up day?

My elderly mother in law lives in a house in a community title development. The strata committee recently decided that the 49 lots should have twice annual “clean up” gatherings. If a lot owner does not attend, they have to pay an additional charge of $150. Can the committee impose arbitrary penalties like this?

Answer: The community association or the association committee cannot impose a penalty against an owner who does not attend the twice annual “clean up” gatherings.

No, the community association or the association committee cannot impose a penalty against an owner who does not attend the twice annual “clean up” gatherings. Nor can the community association impose levies on owners other than in accordance with the units of entitlement i.e. impose a levy on one or some owners but not all owners.

Case law and the legislation is very clear that only the Courts or Tribunal can impose penalties.

Community schemes may be tempted to adopt by-laws that seek to recover costs or penalties such as these. However, community schemes cannot recover costs or penalties by way of a by-law.

By-laws cannot impose fees and charges unilaterally in the absence of express authority to do so under the Community Land Management Act 2021, as it would be inconsistent with the provisions of the Act relating to association property maintenance and maintenance of association funds.

A costs recovery by-law may also be ruled invalid if it is harsh, unconscionable or oppressive. The Tribunal has done so on a variety of grounds, including where a by-law displaced the normal processes of the courts, where it did not provide the debtor with procedural fairness, where the by-law reserved assessment of the amount to the scheme without independent assessment, where the by-law lacked inbuilt controls such as whether the amount was reasonable in quantum and reasonably incurred and where the by-law was framed as a debt due, rendering the relevant owner unfinancial and subject to loss of voting and other rights.

Matthew Jenkins
Bannermans Lawyers
E: [email protected]
P: 02 9929 0226

This post appears in the December 2024 edition of The NSW Strata Magazine.

Question: I have recently been issued an invoice by strata for not providing my car registration details to them. The amount is $165 and is pre-determined in the by-laws. Is this consistent with the Strata Scheme Management ACT 2015?

Answer: If this is properly characterised as a fine, the charge would likely be invalid.

As we have not seen a copy of the by-law, it is unclear what basis the owners corporation has purported to charge you. NCAT has upheld genuine on-charging to owners for administration costs, e.g. pet application fees. However, if this is properly characterised as a fine, the charge would likely be invalid as NCAT has exclusive jurisdiction to impose fines/penalties.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #665.

Question: Can our strata managers charge lot owners an administration fee for serving a bylaw breach notice?

I’ve received a by-law breach notice from the strata manager along with an invoice for an admin fee for the investigation of the by-law breach. The breach was for a noise complaint from our downstairs neighbours.

There are signs in our common areas stating that a breach of a bylaw will result in a breach notice accompanied by an admin fee of between $110 and $220 for breaches like:

• parking in visitors parking for more than 8 hours
• disposing of unwanted household goods in the garbage room.
• taking glass containers into the pool area

Can our strata managers charge us an administration fee for serving a bylaw breach notice?

Answer: No, the Owners Corporation or a Strata Managing Agent do not have the authority to issue a fine for breaches of by-laws.

After working in strata for so many years I can certainly understand the inclination of Owners Corporations to issue a fine for breaches of by-laws, but no, the Owners Corporation or a Strata Managing Agent do not have the authority to do so.

The Strata Schemes Management Act 2015 specifies how by-laws are to be enforced and the process that the Owners Corporation can take.

Under the Strata Schemes Management Act 2015, NSW Civil and Administrative Tribunal (NCAT) is the only body that has the authority to issue fines and that can only take place when due process is followed by the Owners Corporation.

In your circumstances, the Owners Corporation have issued a fine under the name of an admin fee rather than following due process or undertaking the requirement to actually prove that you are in breach of by-laws.

A lot owner can be asked to reimburse the Owners Corporation for expenses incurred (e.g. false alarm fees from NSW Fire & Rescue) but that is very different position from issuing a fine.

Robert Fothergill
Strata Life
E: [email protected]
P: 02 9456 9917

This post appears in the July 2022 edition of The NSW Strata Magazine.

Question: Can the OC charge an owner a monetary fine for parking or other similar bylaw breaches?

Can the OC charge an owner a monetary fine for parking or other similar bylaw breaches? If these fines are not paid the lot owners won’t be financial and will not able to vote at the AGM.

I thought NCAT were the only bodies that may enforce payment and only after the Owners Corporation has satisfied the tribunal of the merits of its case.

If that’s this is correct, can an Owners Corporation issue a fine that has not been considered by the tribunal or court be used to stop an owner voting at the AGM?

Answer: This is too much power for an owners corporation to have.

There are no provisions under the Strata Schemes Management Act (‘the Act’) that empower an owners corporation to issue penalty infringement notices (fines).

The Act frequently talks about situations in which the Tribunal has the power to order payment of monetary penalties, sometimes payable to an owners corporation. However, it never talks about the owners corporation having that power itself.

Put simply, this is too much power for an owners corporation to have. The law requires these matters to be reviewed and decided upon by a Tribunal or Court, which can ensure that due process is followed.

An owners corporation may have a by-law that requires monetary payments to be made to it for certain things. For example, payment of a fee for use of a common area, or a bond for moving in or out.

However, these amounts cannot be treated as if they were levies. Part 5, division 2 of the Act is very clear in terms of the proper procedures for levies being raised and includes no provisions for levying a single lot (the only such provision is under section 82 in relation to insurance premiums, and even then, the owner must consent, or be ordered by the Tribunal, to pay a higher levy).

If a person were to breach the by-law by refusing to pay, then the owners corporation would have to pursue the normal channels for enforcing its by-laws (i.e. obtain orders from the Tribunal to enforce the by-law and potentially also seek orders for fines to be issued for non-compliance with the by-laws).

The Tribunal would then have the opportunity to assess the by-law and whether it is reasonable in accordance with section 139 of the Act.

Tim Sara
Strata Choice
E: [email protected]
P: 1300 322 213

This post appears in the March 2022 edition of The NSW Strata Magazine.

Question: I relocated bins that were blocking my parking space, was captured on CCTV and have been fined $550. I’m unable to get a reasonable response from the Owners Corporation about the matter. What do I do?

I am a lot owner in NSW. The bins on the common property of our scheme have been rearranged and 3 of them are obstructing access to my allocated car space. I have written to the Owners Corporation via Strata many times and requested that these bins be relocated to another emptier bin area which does not infringe on any car spaces. I have never received a response to these requests.

A few weeks ago, I moved 3 of the bins to the other bin area to stop the obstruction of my car space. This was captured on CCTV and I received a fine from Strata “on behalf of the Owners Corporation” for $550. All the fine said was “cost of relocation of bins”.

These are wheelie bins and are moved around daily anyway. Can The OC charge for having to ask the building manager to put the bins back? Aren’t the bins owned by the OC? As a lot owner aren’t I a part of the OC?

The chairman of the Owners Corporation and the Strata Manager are totally unapproachable. Can they enforce a fine without detailing what the $550 is made up of?

If I decline to pay this unreasonable invoice, can this cost be added to my levies? My Strata levies are always up to date.

Please help as this is the most unreasonable thing I have ever heard of.

Answer: The by-laws would generally prohibit obstruction of common property.

Your request to the Owners Corporation to relocate the bins would seem to be a completely reasonable, particularly if photos were provided of the issue. The by-laws would generally prohibit obstruction of common property.

The lack of response from either strata or the OC is completely unreasonable and I don’t believe there’s any basis where the OC could issue an invoice as they have done.

Even though the bins are owned by the OC permission should be sought to move them.

I would be writing to the committee as a whole, use the last AGM minutes to find out who they are. You can also arrange a strata search with the strata manager to obtain contact details if the strata manager refuses to provide contact details.

I don’t believe they can force a cost without detailing why the cost is $550 and I wouldn’t be paying it.

There is no basis on which they can add this to your levies or recover it like it was levies. You will need to speak to Fair Trading for advice and seek mediation or consult a lawyer if they look to do so.

Andrew Terrell
Bright & Duggan
E: [email protected]

This post appears in Strata News #258.

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