By By By-laws

With June done and dusted, I think it is fair to say that 2020 has not ‘gone to plan’. Regardless of what you had in mind for 2020, it is likely that the COVID-19 pandemic has forced you to stay indoors more than you might normally.

Disputes about parking, pets, noisy flooring and smoking are not new issues in the BoCo world. COVID-19 though has regrettably seen such disputes come to the fore and we have seen a substantial increase in by-law enforcement matters.

Bodies corporate have an obligation under the Body Corporate and Community Management Act 1997 (Qld) (“the BCCM Act”) to enforce the community management statement (“CMS”) (including enforcing any by-laws for the scheme in the way provided under the BCCM Act). However, this obligation is subject to bodies corporate acting reasonably in making or not making a decision.

The enforcement of by-laws and the by-law contravention process is not always straight forward, especially when the by-law sought to be enforced may be invalid and therefore not enforceable.

Where a body corporate reasonably believes a by-law is invalid, the decision not to enforce the by-law may be reasonable.  In simple terms, if a body corporate wants to enforce a by-law, it needs to be a valid by-law.

Statutory requirements

When considering the validity of a by-law the starting point is Section 169 of the BCCM Act, which states:

“169 Content and extent of by-laws

1. The by-laws for a community titles scheme may only provide for the following—
   
   
2. the administration, management and control of common property and body corporate assets;
3. regulation of, including conditions applying to, the use and enjoyment of—
   
   
4. lots included in the scheme; and
5. common property, including utility infrastructure; and
6. body corporate assets, including easement areas relevant to common property; and
7. services and amenities supplied by the body corporate;
8. other matters this Act permits to be included in by- laws.
9. If there is an inconsistency between a by-law and a provision (the other provision) of the community management statement that is not a by-law, the other provision, to the extent of the inconsistency, prevails.”

The BCCM Act also sets out explicit limitations for by-laws in section 180, which states:

“180 Limitations for by-laws

1. If a by-law for a community titles scheme is inconsistent with this Act (including a regulation module applying to the scheme) or another Act, the by-law is invalid to the extent of the inconsistency.

Example for subsection (1)—

If a by-law for a community titles scheme purporting to give a body corporate manager, service contractor or letting agent exclusive use of common property is inconsistent with the regulation module applying to the scheme, the by-law is invalid to the extent of the inconsistency.

2. Subsection (1) does not apply to an inconsistency between a by-law and a local law or PDA by-law if the inconsistency is about keeping animals on scheme
3. If a lot may lawfully be used for residential purposes, the by-laws cannot restrict the type of residential use.
4. A by-law cannot prevent or restrict a transmission, transfer, mortgage or other dealing with a lot.

Examples—

1.  A by-law cannot prevent the owner of a lot from leasing or mortgaging a lot.

2.  A by-law cannot prevent the sale of a lot to a person under or over a particular age.

5. A by-law must not discriminate between types of occupiers.
   

Example—

A by-law cannot prevent a tenant from using a pool on the common property.

6. A by-law (other than an exclusive use by-law) must not impose a monetary liability on the owner or occupier of a lot included in a community titles scheme.
7. A by-law must not be oppressive or unreasonable, having regard to the interests of all owners and occupiers of lots included in the scheme and the use of the common property for the scheme.
8. A by-law must not include a provision that has no force or effect under the Building Act 1975, chapter 8A, part 2”

A by-law may be invalid for multiple reasons. However, in our experience, an invalid by-law will normally fall into one of the categories listed below:

1. The by-law attempts to prohibit an otherwise lawful activity, rather than regulate the activity;
2. The by-law is oppressive or unreasonable in the manner in which it regulates the use and enjoyment of lots or common property; and/or
3. Imposes a monetary liability on the owner or occupier of a lot.

The difficulty in determining whether a by-law is oppressive or unreasonable, is that the process set out by s180(7) of the Act requires regard to be had to the interests of all owners and occupiers of lots in the scheme as well as the use of the common property.

In other words, a by-law might be oppressive or unreasonable in one scheme but not in another.

The decision of Mineralogy P/L v the Body Corporate for the Lakes Coolum [2002] QCA 550 (“Mineralogy”) is Queensland’s leading authority on by-laws that prohibit instead of regulate. 

The decision in Mineralogy, as it applies to the functions, powers and restrictions on by-laws can be summarised in the following terms:

1. The power to regulate an activity implies that the activity will, despite such regulation, be capable of continuing, which it would not do if it were completely prohibited;
2. Prohibition of an activity in part, in a particular case, or in a particular way, may in some cases be needed to achieve effective regulation;
3. A blanket prohibition of an activity that an owner or occupier of a lot would normally, according to the ordinary rights of a land owner or occupier, be entitled to carry on in using and enjoying the lot is prima facie invalid; and
4. A general prohibition where qualified by the right to obtain somebody’s consent, but the right to consent was unqualified and unlimited and not subject to any objective standard by which to give or refuse consent, that too would not amount to appropriate regulation.

By-laws in practice

Assessing the validity of a by-law is not for the untrained. Without an understanding of the BCCM Act, relevant module and the relevant case authorities, it is simply too difficult to assess the validity of the by-law.

Whilst a review of a community titles scheme’s by-laws can be expensive, the cost is far less than a pro-longed dispute involving a potentially invalid by-law.

It is not uncommon for community titles schemes to keep their by-laws as is to preserve the status quo with the lot owners and occupiers. We do not consider this approach to be best practice.

If your scheme’s by-laws have not been recently reviewed (or you are unsure if they have ever been reviewed), we recommend the body corporate seek legal advice as to the validity of the by-law, prior to taking steps to enforce the same. The advice sought should always be specific to the community titles scheme because, as discussed above, what is considered oppressive or unreasonable for one scheme, may not be for another.

As always, we are here to assist and advise bodies corporate with any of their legal issues.

Disclaimer – Reliance on Content
The material distributed is general information only. The information supplied is not and is not intended to be, legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.