Resolving not to repair and maintain common property? Don’t forget the exclusive use by-law

In Owners Corporation SP 32033; Patrick and Valerie Mullins [2015] NSWCATCD 23 (27 February 2015) the NSW Civil and Administrative Tribunal upheld an Adjudicator’s order declaring a special by-law invalid.

The by-law in question recorded a resolution by the Owners Corporation not to maintain external common property windows. The by-law purported to place the obligation for maintenance of the windows on individual lot owners.

The Owners Corporation argued that it had the power to make such a by-law by virtue of section 62(3) of the Strata Schemes Management Act 1996 (NSW), which permits an owners corporation to determine, by special resolution, that “it is inappropriate to maintain, renew, replace or repair” a particular item of common property. Such a resolution may only be made if it “will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme.”

The Tribunal found that the Owners Corporation’s decision not to maintain and repair the windows was validly made under section 62(3) of the Act. However, it did not follow that the Owners Corporation had the power to place the obligation for maintenance of the windows on the individual lot owners. If the Owners Corporation wanted to do that, it had to give the lot owners exclusive use of or special privileges over the common property windows pursuant to section 52 of the Act. That would require the written consent of the lot owners (section 52(1)(a) of the Act), and the Owners Corporation had not obtained such written consent.

This case reminds owners corporations that if they are going to rely on section 62(3) of the Act to resolve not to repair and maintain any item of common property, where that item is instead expected to be maintained by the lot owners, a special by-law is required, conferring on the owners the exclusive use of that area of the common property.

 

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Posted in LCOR