The Fourth Tier Of Government

It is often said that if you live in a strata building, you are controlled by the fourth tier of government in Australia (Federal, State, Local and Strata!).

Companies derive their powers and duties from the Corporations Act and from their constitution. Bodies Corporate derive their powers and functions from the state strata legislation and their by laws.

All strata schemes have a set of by-laws (rules) that owners, occupiers and, in some cases, visitors must follow. By-laws cover issues such as whether or not pets are permitted on the scheme, how smoking is regulated, parking, noise, and the conduct of residents and visitors.

Owners Corporations can determine the by-laws that suit the preferred lifestyle of the strata scheme and in NSW, can enforce these rules through the Tribunal (NCAT), which may penalise a person who breaches a by-law.

However, by-laws cannot be harsh, unconscionable or oppressive, restrict children from the scheme, or restrict dealings in a lot, such as the owner renting out their lot.

You can access a set of model by-laws from the NSW Fair Trading website, which provide ‘sample rules’ to guide the Owners Corporation in setting their own by-laws.

These may be adopted as is, or with changes to suit the individual scheme’s requirements.

To make or change a by-law, the Owners Corporation must agree to a motion put forward on the proposed new by-law with no more than 25% of votes cast against it (a special resolution).

A by-law cannot be enforced by a strata scheme unless it is also registered with the NSW Office of the Registrar General.

All strata schemes must have reviewed their by-laws by 30 November 2017. This was designed to help make sure the by-laws of all schemes are up-to-date.

A strata scheme’s by-laws that were in place before the new laws started on 30 November 2016 continue to remain in force unless they are changed. Any changes require a special resolution vote at a meeting of the Owners Corporation and must also be registered with the NSW Office of the Registrar General.
Breaching the By-Laws

If a resident breaches a by-law, the Strata Committee can first contact the resident to advise of the breach, and ask that they stop the conduct that is causing the breach.

If this is unsuccessful, the Owners Corporation may issue the person responsible for the breach with a Notice to comply with a by-law. If they have the delegated authority, a strata managing agent may also issue a notice to comply.

If there is a breach after the notice has been issued, the Owners Corporation may apply to the Tribunal to impose a penalty, after resolving to do so at a General or Strata Committee Meeting.

If the Tribunal has already fined the owner or occupier within the last 12 months for a breach of the same by-law, the penalty imposed by the Tribunal can double to a maximum of $2,200.00. In this case, the Owners Corporation does not have to issue another notice to comply before applying to the Tribunal to impose the fine.

Liability limited by a scheme approved under Professional Standards Legislation

Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.


Management Rights Articles


    Financiers of management rights purchases commonly require the owners corporation to enter into a deed of consent to security (“consent deeds”). The problem is that there is nothing in the NSW strata legislation that requires an owners corporation to agree to enter into such a deed – even on the most reasonable of terms.

    Consent deeds, also commonly called “right of entry deeds”, act as security over the management rights in the event of a default by the caretaker.

    The deed allows the financier to ensure its security is not jeopardised if the caretaker is in default of its loan agreement. 

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